The Missouri Development Finance Board should say no to a request for $15 million more in tax credits to help renovate the Museum of Westward Expansion beneath the Gateway Arch.
The project is already set to receive $159 million from local, state and federal taxpayers. A year ago in April, St. Louis city and county taxpayers approved a 3/16ths-cent sales tax for the Arch grounds project and area parks and trails.
The overall cost of the Arch project is $380 million, which includes renovating the Gateway Arch grounds and $169 million to essentially build a new museum beneath the Arch.
Of that amount, $221 million was to be raised privately by CityArchRiver 2015, the nonprofit organization spearheading the renovation, through private donations. That was the promise made to voters before they passed the sales tax.
Walter Metcalfe, an attorney with Bryan Cave and the head of the CityArchRiver foundation board, said Friday that about 80 percent of the private money has been raised. He said that the commitment of state tax credits would stimulate more private donors.
CityArchRiver has asked the state Development Finance Board to approve a request for $15 million in tax credits, which would be used to leverage $30 million for the museum renovation.
The 12-member finance board, which runs several tax incentive programs intended to spur development across the state, unanimously endorsed the request last week.
The entire program has an annual budget of $10 million, so special approval would be needed from the state directors of the Office of Administration, Department of Revenue and Department of Economic Development. Bob Miserez, executive director of the state finance board, told the Post-Dispatch’s Jeremy Kohler that the agencies have been involved in discussions about additional money for the Arch museum all along.
Mr. Metcalfe says the tax credits would be a good investment for the state, the governmental entity that stands to gain the most money from the Arch project — from $56 million to $114 million over the next 20 years in tax revenues that will be created by the project.
He added that some of the private donors have a “gut reaction” that the state should be contributing more money to the project. The state is already in for $17.4 million in work being performed by the Missouri Department of Transportation.
Mr. Metcalfe said the potential private donors he has discussed the plan with so far intend to donate their tax credits to CityArchRiver, which would then sell them at roughly 70 cents on the dollar to raise more money for the Arch project.
The money would come from the state’s Tax Credit for Contribution program, which is intended to double private donations to a development by reimbursing donors for half of their contributions. So when a donor writes a check for $100,000, the project gets that money and the donor gets $50,000 back in tax credits.
The tax credit is sort of a coupon that can be used to pay state taxes, or sold to brokers to raise upfront cash for other projects. Every dollar in redeemed tax credits is a dollar that doesn’t go into the state general revenue fund for niceties like education or social services.
That’s the problem. Yes, the Arch grounds renovation is a worthy project. And yes, it’s going to be a spectacular addition to the St. Louis riverfront.
But in a tax-cutting state with tight revenue and many competing interests, it’s hard to argue that the Arch project should be a higher priority than, say, mental health services. Or that the donors should get anything more than the tax write-off the IRS grants to donations to a charitable organization.
St. Louis is a generous community; donors don’t need to be bribed to make philanthropic contributions to their communities. The tax credit programs should be reserved for less glamorous projects that have a harder time attracting revenue.