All sides agreed on one thing during yesterday’s discussion of the $14.5 million TIF for developer John Steffen‘s makeover of St. Louis Centre — this is a bad deal for the taxpayers of the City of St. Louis.
“This is not something that any of us wants to do,” said Barb Geisman, deputy mayor of development. “But those of us that have thought about it and support this feel that we have no choice.”
Geisman’s remarks came at the meeting of the three-member Board of Estimate and Apportionment (E&A), which is composed of Mayor Francis Slay, Comptroller Darlene Green, and President of the Board of Alderman Jim Shrewsbury. The Board of E&A must approve all City real estate deals and financial appropriations — including TIFs (Tax Increment Financing projects), which they have done at least 60 times since 2001.
But what makes this TIF proposal different, said Comptroller Green, is that it puts the City’s credit rating on the line by guaranteeing Steffen’s bank loan.
“The earlier redevelopment agreement for this particular project — that we did pass — did not put the city’s credit at risk,” said Green. “Now that it has come back it has come asking for the city’s help to purchase the building because a speculator has offered an outrageous purchase price.”
The Comptroller said the only other time the City has put its credit on the line for a private developer was the disasterous St. Louis Marketplace development on Manchester Ave. That shopping center, built during the administration of Mayor Vince Schoemehl, today sits mostly empty and costs city taxpayers more than $1 million every year.
“There were safeguards put in place at that time. Those safeguards have failed,” said Green.
But Mayor Slay said it is worth the risk to taxpayers to help Steffen redevelop One City Centre, the underused 25-story office building, and St. Louis Centre, the vacant downtown mall.
“This particular property is a cancer in our downtown,” said Slay. “It is the biggest complaint we get from conventioners who come to this city.”
Slay praised Steffen, who is also a major funder of the mayor’s political campaigns, as the right man for the job and he said the City of St. Louis should do whatever it can to help get this deal done as soon as possible.
In the end, President Shrewsbury, who was seen as the swing vote on this issue and who is also in what could turn into a tough re-election campaign, agreed with Slay.
“Had this been the original proposal on this project, I, like the Comptroller, would have said no,” said Shrewsbury. “But it seems like circumstances have changed and we’ve been forced into this position.”
Green said that rewarding out-of-town speculators, like the ones that purchased this property in 2001 and now are looking at a $20 million profit in the resale, sets a bad precedent.
“I support the project,” said Green. ” But I don’t support the method in which we’re planning to go forward with this financing.”