CHESTERFIELD – Chesterfield’s plan to build “downtown” cleared its first major hurdle Monday when a special commission recommended it receive $353 million in tax incentives.
The commission voted 9-3 to recommend the city council give tax incentives for two projects poised to create thousands of new apartments, restaurants and offices in a prominent section of Chesterfield. The project calls for approximately $3 billion worth of residential and commercial development, including the redevelopment of Chesterfield Mall.
St. Louis County appointees to the commission, Jay Nelson, and Parkway and Rockwood school district appointees voted against the incentive, known as tax increment financing, or TIF.
The TIF is expected to be presented to the City Council, which has a final decision at its Dec. 5 meeting. The city plans to spend $10,000 to distribute mailers to residents about the incentive.
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Overland-based developers Steinberg Group and CRG are leading the project.
Steinberg Group wants to demolish the Chesterfield Mall at Chesterfield Parkway West and Wild Horse Creek Road to make way for its portion of the project, which calls for a 259-room hotel, about 3,000 housing units and millions of square feet of office space. and retail space.
CRG has plans for nearly 1 million square feet of retail and restaurant space, a public plaza with a floating stage and garden, and more than 565 housing units to the west of the mall.
The recommendation followed weeks of debate where the Parkway and Rockwood school districts clashed with the city of Chesterfield over TIF and how many students the new development would attract.
The TIF would divert some of the new taxes generated by the projects into special funds used to pay for new infrastructure, such as parking garages and roads, for the two projects. The TIF will be in effect for 23 years and property taxes will be frozen at current levels. As real estate increases in value, the TIF will “capture” the increase in property taxes from the base rate and use those funds for other uses. The TIF will also receive 50% of the sales and use tax from the development for other uses.
The districts argued that the TIF would divert money needed to educate the more than 800 students expected to live in the development and who would primarily attend the Parkway district’s three schools. Parkway officials fear the TIF could cost millions of dollars in revenue and force the district to add trailers, raise taxes or redraw school boundaries for many new students. Depending on enrollment, the district expects to lose between $44 million and $235 million over the lifetime of the TIF.
The city, meanwhile, said the projects would broaden the tax base, easing the burden on the average Chesterfield resident. That said, the districts overestimated their student count estimates and would receive a net amount of $216 million in additional revenue. The city projects that the development will add fewer than 300 new students.
Six people spoke during the roughly 35-minute meeting Monday, including former Mayor John Nations, who criticized Parkway and its finance director, saying the district would be in worse financial shape without TIF.
“Parkway has not hired anyone to advise them. They have sent a staff accountant. I’m sure he’s a very good school accountant if you ask him how to finance the lunch program or how to operate the bus system,” Nations said.
He suggested that the new developments could separate from the Rockwood and Parkway districts and form their own school district.
Monday’s recommendation is not binding, but a commission vote against TIF would require a two-thirds override from the City Council and would have prohibited the use of the money.
Chesterfield has only one other TIF, which paid for levees and road improvements when the city attracted new business to the area after a major flood in 1993. The city generated more revenue than expected and was able to retire the TIF nearly a decade early, officials said.