Only speaker at TIF Commission hearing favors Watson Plaza redevelopment plan
The only resident who spoke at a public hearing conducted last week by the Crestwood Tax Increment Financing Commission on a proposal to redevelop the Watson Plaza shopping center supported the plan.
Watson Plaza is adjacent to Crestwood's Watson/Sappington Road Redevelopment Area where a Kohl's Department Store opened last fall.
The proposed Watson Plaza Redevelopment Area is comprised of six parcels of land totaling roughly 18.42 acres.
G.J. Grewe Inc. was the only company to respond to the city's request for proposals to redevelop the shopping center and the Board of Aldermen in March voted unanimously to adopt an ordinance selecting the company as the preferred developer for the redevelopment of Watson Plaza.
In its plan, G.J. Grewe Inc. is proposing a PETCO and a new Walgreens on the site of the vacant Tippin's restaurant as well as retaining the shopping center's existing tenants. The company owns the entire shopping center with the exception of the former Service Merchandise building, which it has under contract to purchase.
The cost of the proposal is estimated at $11,226,305, excluding funding generated by a Transportation Development District that would be used to pay for improvements to Watson Road that would enhance the flow of traffic. Besides TDD funds to offset transportation-related expenses, G.J. Grewe Inc. is seeking $2 million in tax-increment financing to facilitate land-acquisition costs. As proposed, the TIF obligation would be retired in seven years.
A handful of residents attended the July 6 public hearing, but only one person spoke.
David Brophy of Lodge Drive said he supported G.J. Grewe Inc.'s proposal to redevelop the shopping center provided the developer would not seek additional funding — an assurance that Gary Grewe gave later at the hearing.
"I would like to state to begin with that philosophically I'm opposed to TIF,'' Brophy said. "However, as has been shown by remarks and comments at previous meetings here and so on, I don't think that there is any reasonable alternative to a TIF. The situation which worries me is that I've heard that the numbers are tight, whatever that should mean. I hope it does not mean the same thing that it meant with respect to the Kohl's TIF in which the actual cost of the TIF was $2.2 million, but the cost for Kohl's wound up to be about $3.5 million, as I believe.
"So that is a concern. I hope that the developer, in other words, does not come back for more money. Nonetheless, I see no reasonable alternative, no other solution offered to get this property redeveloped, which is critical to the future of Crestwood,'' Brophy continued. "I do not see a viable business district lasting much longer without this type of redevelopment taking place ... We are in a very competitive situation with our surrounding suburbs and so on and we need viable businesses and so on. One advantage of this TIF proposal is that not only will most of the tenants who are currently at the plaza remain, but new tenants will be brought in. That is a positive for Crestwood. That helps to keep us competitive as a business district as a whole and I certainly hope that lacking any reasonable alternative being offered that this TIF goes through.''
The opening of Kohl's last fall marked the final chapter in a process that began in August 1997 to redevelop the northwest corner of Watson and Sappington roads.
In January 1999, the Board of Aldermen voted to approve a redevelopment agreement with THF Realty that granted the developer nearly $2 million in TIF assistance for the corner's redevelopment.
In October 2000, the Board of Aldermen approved an amended redevelopment agreement with THF that called for the Kohl's to be located on the corner. The amended redevelopment pact also increased the amount of TIF assistance the developer is eligible to receive by $375,000 — to $2.285 million from $1.91 million. In addition, the amended pact created a TDD and a community improvement district, two funding mechanisms that brought the total assistance package THF Realty was eligible to receive to $3.5 million.
Commission member Tom Curran, who represents St. Louis County on the panel, later noted the concerns raised by Brophy about the increased subsidies THF Realty was given to redevelop the corner of Watson and Sappington roads. Because of those concerns, Curran said he that wanted a general assurance from the developer that the amount of TIF and TDD assistance "as presented are the extent of what you would anticipate for the subsidies just so that that issue isn't hanging out there ...''
Grewe responded, "... As far as additional subsidy, no. We will not participate in a CID (Community Improvement District) on this project. The TDD will be for the modifications of the road as we've proposed before and the TIF. That will be it. There will be no additional request for assistance on this project.''
In a TIF district, tax receipts for school districts, fire districts and other taxing entities are frozen at existing levels for the length of the TIF — up to 23 years. As land within the TIF district increases in value, the incremental tax revenue — 100 percent of property taxes and 50 percent of sales and utility taxes — is used to retire the TIF obligations. The incremental property tax revenue, also called payments in lieu of taxes, or PILOTs, are deposited into a special allocation fund that is used to retire the TIF obligations.
During a May 26 meeting of the TIF Commission, Curran noted that John Brancaglione of Peckham Guyton Albers & Viets Inc., who serves as the city's planner, had said the period of time to retire the TIF obligations would be seven years — with or without the PILOTs. Given that, Curran suggested the commission consider whether to recommend the PILOTs be excluded from retiring any TIF obligations and be passed through to such taxing entities as the Lindbergh School District, which then would immediately benefit from the redevelopment project.
TIF Commission members considered Curran's suggestion June 21 and agreed to incorporate the PILOTs pass-through as part of the redevelopment plan.
At the public hearing, Brancaglione read a new paragraph added to the redevelopment plan that stated the PILOTs would be considered "surplus'' and distributed to all taxing districts.
"Therefore, all property tax increment that is being generated through this project, by virtue of that language, will be passed through as an annual surplus to the taxing districts that are part of this project,'' he said.
Lacking two documents — an affidavit from the developer stating that absent the use of TIF assistance the project wouldn't go forward and a revised letter of commitment to finance from the developer's bank — the commission agreed to continue the public hearing to 7 p.m. Monday, July 26, at City Hall, 1 Detjen Drive.