The developers of a $106 million St. Ann shopping and office center already heavily subsidized by taxpayers stand to receive even more public help from the St. Louis Economic Development Partnership.
To build out retail space and attract tenants to the development at the corner of St. Charles Rock Road and Lindbergh Boulevard, the region’s economic development agency wants to give the developers of The Crossings at Northwest Plaza another $6 million in investments supported by New Markets tax credits.
The latest round of tax credits would be on top of $16 million in New Markets tax credits, a $30 million tax increment financing district and $7.4 million in state brownfield tax credits.
The federal government awards New Markets tax credits to community organizations in order to attract investment capital for distressed areas. Heartland Regional Investment Fund, an entity formed by St. Louis County, St. Charles and several Metro East counties, was awarded a $30 million allocation of New Markets tax credits in 2014.
If given final approval by Heartland, it would be only the latest public help for the politically connected developers behind The Crossings at Northwest Plaza.
The men behind the development, Robert and David Glarner, have given over $100,000 to St. Louis County Executive Steve Stenger, who appoints 11 of the 15 board members on the Partnership board. Stenger has said the Glarners are friends.
Earlier this year, St. Louis County opted to move the offices of the St. Louis County Board of Elections to The Crossings at Northwest Plaza, a lease valued at $40 million to $50 million over 20 years. The Glarners, through their Givco LLC, donated $75,000 to Stenger in 2015. Another company registered to David Glarner, Mallard LLC, donated $17,500 to Stenger in 2015.
Stenger pointed out this summer that the lease would save some $10 million over its term and the donation had nothing to do with the decision. But the owner of the election board’s longtime home in Maplewood complained he hadn’t been given the chance to renegotiate lease terms.
Last year, the Partnership voted in favor of another $6.4 million in New Markets tax credits toward The Crossings at Northwest Plaza. That was on top of $10 million in tax credits awarded before Stenger had been elected county executive.
At the beginning of this year, the Partnership-controlled Heartland Fund committed $8 million in tax credit support to The Crossings at Northwest Plaza. Now, that $8 million would be supplemented by an additional $6 million.
Three months ago, the Glarners gave another $55,000 to Stenger’s 2018 reelection war chest, which as of October topped $1.1 million. As of October, about 9 percent of Stenger's $1.64 million in total contributions this election cycle have come from the Glarners, their Givco LLC or Mallard LLC.
The Partnership’s board voted to approve the tax credit allocation Wednesday evening. No one asked any questions. Board chairman Karlos Ramirez called it “a great project.”
Sheila Sweeney, CEO of the Partnership, said afterward that there hadn’t been any involvement from the county executive’s office.
She noted that the governing board of the Heartland Regional Investment Fund still needed to give the award final approval. It’s that entity and the Partnership that make the decisions on whom to award New Markets to, she said.
Sweeney pointed to the hundreds of jobs Charter Communications has added to its call center at the 122-acre site of the former shopping mall. The cable company says it has plans to grow employment there to 1,000, and a Menards hardware store anchors the commercial portion of the development.
Without the latest $6 million in New Markets tax credit support, the Glarners won’t be able to build 17,000 square feet of new retail space on the edge of the site or make tenant improvements in another 60,000 square-feet of space, according to Partnership documents.
The Partnership decided to increase the award from $8 million when the developers came back with a larger scope of work that included the retail space, which fronts the major roads. Currently, the office tenants are at the center of the site, surrounded by giant parking lots.
“This affords that development to have connectivity with the world around it,” Sweeney said.
Low lease rates in St. Ann make the construction and operation of new retail space in the area “unsustainable,” the Partnership said in documents supporting the transaction. Potential tenants have balked at rents, and the additional allocation will allow the developers to “drive down the lease rates.”
It will also allow the Glarners to cut their debt in a loan from Great Southern Bank by about $2.2 million. An earlier financing plan with just the $8 million in New Markets contemplated a $3.77 million loan from the bank. Now, the Glarners will only need to borrow $1.5 million “further supporting the long-term success of the project,” the Partnership says in its staff report.
Bob Glarner did not immediately respond to a request for comment. A Stenger spokesman said the county executive’s office was not involved in the allocation of tax credits for the project.
Editor's Note: This article has been updated to correct the percentage of campaign contributions that St. Louis County Executive Steve Stenger has collected from entities affiliated with Robert and David Glarner.