Meeting becomes contentious as panel weighs TIF for Novus
February 02, 2005 - By SCOTT MILLER
The second round of discussions got contentious last week as the Sunset Hills Tax-Increment Finance Commission considered a request for $42 million in TIF assistance.
Fewer residents attended last week's TIF Commission meeting than the first on Jan. 17, but those who came weren't shy about speaking out, even though commission Chairman John Smith, a Sunset Hills Ward 1 alderman, repeatedly said public comment would not be taken or considered at that time. A public hearing is set for 7:30 p.m. Monday, March 21, at City Hall, 3939 S. Lindbergh Blvd.
The Lindbergh School District's two com-mission representatives also expressed con-cerns that weren't heartily welcomed at the Jan. 24 meeting.
The TIF Commission is reviewing a proposal from the Novus Development Co. to use $42 million in TIF assistance for a $163.9 million development at Interstate 44 and Watson Road near South Lind-bergh Boulevard.
If approved, 255 homes of the Sunset Manor subdivision would be razed and several residents have contacted the county alleging intimidation tactics forced them to sell to Novus, accusations the company denies.
Several other residents are holding out for a better deal on their home or hoping the Sunset Hills Board of Aldermen ultimately will reject Novus' proposal.
If Sunset Manor is razed, Lindbergh could lose about 100 students, said commission member Pat Lanane, Lindbergh chief financial officer and assistant superintendent for finance.
As the students leave, around $100,000 to $130,000 in state funding goes with them, he said, but Lindbergh can't specifically cut expenses based on that enrollment drop without affecting the education of other students.
The drop in state funding would come at a particularly bad time. Lindbergh is seeking a 65-cent per $100 assessed valuation tax-rate increase in the April 5 election.
But those residents could remain in the Lindbergh School District if they wanted to, Novus President John Browne said, be-cause the company is offering to pay 175 percent of the assessed value of their properties.
With that, residents could find another home in Sunset Hills or Crestwood, he contended.
"I'm not certain of the availability of properties," Lanane replied.
He also questioned whether Novus' offer would afford residents the opportunity to buy another home in the area.
Responding to Lanane's comments, commission member Bill Holland, who represents Sunset Hills, said, "From the district's perspective have you taken into any account that there's approximately 144 new home developments that are coming on our line regardless of whether this project goes forward or not?
"They will have base market price of a half million dollars and up. So to your point on that (enrollment), I understand exactly the issue and the impact but to say that is just a net loss I'm not sure I understand the total, global logic on that because those are approved developments ... So if this (Novus) development does not go forward and all these folks stay pat, you're getting that net increase regardless and that's coming out of, within the city value of Sunset Hills.
"I don't know what percentage of that growth would include students coming into the district," Holland continued, "but I think in the interest of fairness — and I'm not taking sides one way or the other — I think it is important to note that there is another side of the ledger here."
Lanane responded, "Well my comment would be that we're going to get that anyway. It's money we get and to the extent that we do lose some students otherwise, it's still a loss to the school district."
"But that's not budgeted money that you have today unless you've already filled that into your future projections," Holland replied.
"What I'm saying to you is we would," Lanane said. "That's part of our student budget."
Holland replied, "But on a net incremental basis I'm just saying you'll end up coming out on a net increase. On a global accounting basis it would seem to me that it would be almost, I don't know, you can't lose on that."
"We build in a certain amount of estimated growth on all of our projections," Lanane said.
Smith interjected, "Pat, I think you're drifting away a bit from this agenda. There probably is an opportunity to discuss some of these things when we get into the cost-benefit review.
"In terms of where we are at the present time relative to the redevelopment plan, I think we need to move on,'' the chairman added.
Lanane said, "Well I just would say I don't think I'm drifting because when you talk about cost benefit, a loss of $100,000 to the school district is certainly worth the discussion."
"That will come later," Smith said.
From the first mention of a possible TIF, Lanane has worried the deal would strip money from schools.
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 — in this case, between 12 to 15 years pending the final deal. As land value increases within the TIF, the incremental tax revenue — 100 percent of property taxes and 50 percent of sales and utilities taxes — is used to retire the TIF obligation.
As development occurs, property values increase but only the city absorbs an immediate tax benefit. Other taxing entities don't see any of the tax growth until the TIF debt is retired, a concern of Lind-bergh officials.
Browne told the commission at its first meeting that Novus would offset Lindbergh's loss of property-tax growth from the redevelopment area by providing payments to the school district and other taxing entities in amounts equal to the Consumer Price Index.
In addition, Main Street at Sunset will generate about $3.5 million in additional property taxes that the Lindbergh School District and other taxing entities can claim when the TIF obligation is retired, according to Browne.
At the panel's first meeting Jan. 17, After reviewing Novus' proposal, Lanane submitted a letter to the TIF Commission with number of questions, stating, "... I am submitting my initial questions and ask that a response be given in writing."
The TIF Commission is scheduled to review Browne's responses at its next meeting at 7:30 p.m. Monday, Feb. 14, at the Sunset Hills City Hall, 3939 S. Lindbergh Blvd.