Ellisville Wal-Mart

[rbeedee]

Hadn't heard about this project until I came across this article from the P-D: TIF commission opposes financing for Ellisville Walmart. It nicely sums up the issues that crop up with every TIF proposal.

The good news:

The proposed use of tax incentives to develop a Walmart Super Center is meeting opposition in Ellisville. A crowd of more than 100 people turned out Monday for a public hearing before the city's Tax Increment Financing Commission. Most of them voiced opposition to the plan.

The vicious cycle:

Charles Pavlack, commission chairman and a former Ellisville City Council member, insisted that TIFs have been used in the past for the Manchester Highlands, Chesterfield Commons, and other shopping centers that drew stores away from Ellisville. "For us to say we'll take the moral high ground and make a brave stand to turn down TIF, when others have used the same method to take our businesses, doesn't make sense," he said.

And of course, the next step and a threat:

The negative commission vote means that at least five of the six council members and mayor would have to vote in favor of the TIF. Normally, a simple majority of four would be needed.

Jim Sansone, a principal with Sansone Group, said that, without tax incentives, "this project will not happen."

[Alex Ihnen]

This needs to be addressed regionally, now. Is there a political (or other) leaders who can step up and do this? The "this project will not happen" crap must be called out. If there were no incentives for retail development across the region, there would still be x number of Walmarts etc. We need to stop stealing from one another.

[tbspqr]

Good sign it was rejected... now hopefully they can't get the needed votes.

The plight of cash-strapped cities: a Wal-mart 3 miles away (in a different municiplaity) will poach local business just the same as one within their municiplaity... elected officals feel obligated to do everything to bring in this (substantial) sales tax revenue.

Political will or not, this "stealing" will continue to take place until there is nothing to gain...
+Municipal Consolidation (if there were 5-10 instead of 90+ municipalities in St. Louis County this would less of an issue.)
+Moratorium on Replication (No TIFs if the same store exists within 20 miles - exempting new stores like IKEA)
+County level approval - all TIFs to be approved through the county or MPO after city approval

[justme123]

Political will or not, this "stealing" will continue to take place until there is nothing to gain...
+Municipal Consolidation (if there were 5-10 instead of 90+ municipalities in St. Louis County this would less of an issue.)
+Moratorium on Replication (No TIFs if the same store exists within 20 miles - exempting new stores like IKEA)
+County level approval - all TIFs to be approved through the county or MPO after city approval

Total agreement on all 3 points.
I think Wal-Mart is the most egregious example of TIF abuse. I think I read somewhere that the average WM store is < 7 years old. The circus with WM relocations along the Rock Road (St. Ann, Bridgeton, etc) and along Manchester (T&C to Ballwin, etc.) It has to stop somewhere.

I recall a while back Florissant rejected a WM TIF proposal for far-north Lindbergh. Did that "stick" or did the project move forward?

[south compton]

Good sign it was rejected... now hopefully they can't get the needed votes.

The plight of cash-strapped cities: a Wal-mart 3 miles away (in a different municiplaity) will poach local business just the same as one within their municiplaity... elected officals feel obligated to do everything to bring in this (substantial) sales tax revenue.

Political will or not, this "stealing" will continue to take place until there is nothing to gain...
+Municipal Consolidation (if there were 5-10 instead of 90+ municipalities in St. Louis County this would less of an issue.)
+Moratorium on Replication (No TIFs if the same store exists within 20 miles - exempting new stores like IKEA)
+County level approval - all TIFs to be approved through the county or MPO after city approval

I think municipal consolidation and local government sales tax dependency is the real issue. Theoretically, I'm ok with TIFs that replicate stores (to a certain degree) as long as the TIF area is truly blighted and the TIF plan truly addresses the blight. The problem is that too many cities are chasing sales tax dollars and are willing to flaunt the intentions of the TIF law to get a little more tax revenue at the expense of everyone else.

[tbspqr]

I think municipal consolidation and local government sales tax dependency is the real issue. Theoretically, I'm ok with TIFs that replicate stores (to a certain degree) as long as the TIF area is truly blighted and the TIF plan truly addresses the blight. The problem is that too many cities are chasing sales tax dollars and are willing to flaunt the intentions of the TIF law to get a little more tax revenue at the expense of everyone else.

In theory, you're right: TIFs were envisioned as a jump-starter for abandoned areas with no/minimal demand. I am, like most on this forum, for this use of TIFs. Problem is that TIFs are abused 99 times for every once that the "TIF area is truly blighted" and the development actually "addresses the blight".
It is a broken system that does next to NOTHING of which it was intended. In that light the system needs to be overhauled.

My definition of "blighted" is a "brownfield at or near lowest land use"; not "land which isn't at its highest possible taxation/land-use". Greenfield's SHOULD NEVER be TIFed. Manchester, Chesterfield, Bridgeton, Fenton etc are NOT blighted by any stretch of the imagination.

An area which has occupied houses or viable stores and attracts tenets isn't necessarily "blighted" just because it has seen "better days" or a developer says "I have a proposal". Other financing tools exist (self taxing TDDs and market rate buy-outs) which can be used instead. Abandoned suburban shopping malls like Northwest Plaza, with next to no tenets and a proprietary(and outdated) structure, COULD be called blighted... but the TIFed infill SHOULDN'T poach/duplicate existing infrastructure (AKA Wal-Mart et alii can't relocate an existing store).

[debaliviere]

Would it be legally possible to establish some sort of tax district in which municipalities could share in the tax revenues of retail corridors like Manchester or Watson - a setup in which Crestwood and Sunset Hills could work together instead of in opposition, for example.

I have no idea if this idea would work or not; just throwing it out there.

[goat314]

We should be using these "TIF" agreements to redevelop these abandoned big box stores into real mixed use projects. It's like St. Louis County doesn't realize that it is an urban county that needs to grow and the only way is to go denser. Large swaths of St. Louis County's commercial corridors and residential communities need to be redeveloped into modern more sustainable development. St. Louis County is showing its age and even wealthy parts of the county are looking dated, tacky, and uninviting. St. Louis County is at a critical turning point and I really do wonder what direction it will take. Many young people are leaving the county for the city or other metro areas and many of these suburban communities are going to be dominated by senior citizens in the very near future. St. Louis County finally needs an identity of its own that is separate from poaching residents from St. Louis City.

[rbeedee]

+Moratorium on Replication (No TIFs if the same store exists within 20 miles - exempting new stores like IKEA)

Why this exemption? I get that a lot of people want new national/region chain stores like IKEA to come, but isn't the underlying logic the same? I guess this would solve the problem of a Wal-Mart moving across a municipal boundary, but the overarching point is that these developments either make sense or not for the company. If we didn't provide a TIF for IKEA, if IKEA thought they could still make money they would move in anyway, they just might not move in to the area we wanted them to. I think TIFs are best used as a way to direct growth to a certain area (e.g., run-down or abandoned areas), not as ways to lure in certain companies.

My proposed TIF rules:
1. No TIFs for greenfields.
2. All TIFs have to be approved by a joint St. Louis City-St. Louis County board. For all I care, let every municipality have a vote. With all the municipal in-fighting we have, that might get rid of TIFs entirely.

[rbeedee]

Would it be legally possible to establish some sort of tax district in which municipalities could share in the tax revenues of retail corridors like Manchester or Watson - a setup in which Crestwood and Sunset Hills could work together instead of in opposition, for example.

Interesting idea, I wonder how much it could be broadened? As I understand it (Beacon article), there's a 1% county-wide sales tax (municipalities can add on their own additional tax as well). Municipalities in St. Louis County are divided into point-of-sale communities (share part of their county-wide sales tax revenue with other municipalities and keep part for themselves) and pool cities (pool all their county-wide sales tax revenue then divide it according to population).

As more cities become point-of-sale cities, less of the sales tax revenue is spread out over the county in general, and there's more competition for retail (and more TIF/tax giveway abuse). Moving towards a general pool program (and letting municipalities add on whatever municipality-specific taxes they want for their own funding stream) might be helpful.

[tbspqr]

+Moratorium on Replication (No TIFs if the same store exists within 20 miles - exempting new stores like IKEA)

Why this exemption? I get that a lot of people want new national/region chain stores like IKEA to come, but isn't the underlying logic the same? I guess this would solve the problem of a Wal-Mart moving across a municipal boundary, but the overarching point is that these developments either make sense or not for the company. If we didn't provide a TIF for IKEA, if IKEA thought they could still make money they would move in anyway, they just might not move in to the area we wanted them to. I think TIFs are best used as a way to direct growth to a certain area (e.g., run-down or abandoned areas), not as ways to lure in certain companies.

My proposed TIF rules:
1. No TIFs for greenfields.
2. All TIFs have to be approved by a joint St. Louis City-St. Louis County board. For all I care, let every municipality have a vote. With all the municipal in-fighting we have, that might get rid of TIFs entirely.

I understand the sentiment "if it made business sense businesses would come regardless". A knee jerk reaction of "eliminate all TIFS" to counter the suburbs extreme "TIF everything" isn't the answer. Look what that "wait and we will see", "market rate development" approach did for the north side over the past 70 years (I know its not that simple- crime, schools, national policy etc; just making a point). A compromise is needed, a checks and balance system to get the badly needed re-development, along with the associated long term jobs, tax base and stability it could offer. If a site isn't a greenfield, but it is blighted in the sense that it no longer has any viable use as is, in my opinion the "right kind of development" could be a good target for a TIF.

What do I mean by the "right kind of development"? The right kind has a net gain of permanent jobs/services. The wrong kind is one which plays location musical chairs at tax payer expense (with excess infrastructure, and unused buildings and surface parking left behind). Sure, we'd all prefer "right kind of development" to specifically demand dense & mixed use developments... but lets be realistic as to what can be demanded at these sites.

The 20 mile limit I proposed is just that if (pure hypothetical example) Spanish Lake builds a new Wal-mart, because of distance and availability of other options in between, that new store wouldn't specifically affects South STLCounty. Likewise, if the South County Walmart were to close, it probably then wouldn't be a result of the new Spanish Lake Walmart. It was an arbitrary distance, but the overall idea is TIFs are a good tool, if not abused. How does one say when it is effective and when is it abused? My answer came to an easily quantifiable distance and a net gain of jobs the region as a whole (city/county agglomeration).

[newstl2020]

Has anyone ever looked at Wal-Mart's balance sheet?

Here's a hint for those that have not...

There is NEVER, EVER, EVER a need to give them any type of government assistance what-so-ever.

I know this isn't the point, I just find it appalling.

[south compton]

Would it be legally possible to establish some sort of tax district in which municipalities could share in the tax revenues of retail corridors like Manchester or Watson - a setup in which Crestwood and Sunset Hills could work together instead of in opposition, for example.

I have no idea if this idea would work or not; just throwing it out there.

There is a legal mechanism for adjoining cities to share sales tax revenues, but its usually used in rural areas where each city controls one side of a highway interchange. I don't see why it couldn't be applied in St. Louis County. Of course once cities start sharing sales tax revenues and services, residents might begin to wonder why they even have separate cities...

[quincunx]

Here's the nextSTL post about pool cities v point-of-sale cities:

http://www.nextstl.com/stl-county/st-lo ... omic-unity

[rbeedee]

The city council will vote April 4th on the TIF. Apparently Sansone has proposed some changes which have not yet been released, and the council needs some time to "digest" them:
Ellisville council moves Walmart TIF vote to April
Ellisville council delays vote on proposed Walmart

In a four-way race for mayor, 2 candidates are against the TIF, 1 for, and 1 somewhere in the middle: TIF controversy highlights four-person mayoral race in Ellisville