CHESTERFIELD — A plan to create a “downtown” Chesterfield 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 grant a tax incentive for two projects poised to create thousands of new apartments, restaurants and offices in a prominent section of Chesterfield. The project calls for about $3 billion worth of residential and commercial developments, including a redevelopment of the Chesterfield Mall.
A St. Louis County appointee to the commission, Jay Nelson, and the Parkway and Rockwood school districts’ appointees voted against the incentive, called tax increment financing, or TIF.
The TIF is expected to be introduced to the City Council, which has the final say, at its Dec. 5 meeting. The city plans to spend $10,000 to distribute a mailer to residents about the incentive.
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Overland-based developers The Staenberg Group and CRG are leading the projects.
The Staenberg Group wants to demolish the Chesterfield Mall, at Chesterfield Parkway West and Wild Horse Creek Road, to make way for its part of the project, which calls for a 259-room hotel, nearly 3,000 housing units and millions of square feet of office 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 just west of the mall.
The recommendation followed weeks of debate where the Parkway and Rockwood school districts clashed with the city of Chesterfield over the TIF and how many students the new developments would attract.
The TIF would divert some of the new taxes generated by the projects into a special fund used to pay for new infrastructure, such as parking garages and roads, for the two projects. The TIF would be in effect for 23 years and freeze the property tax at the current level. As real estate appreciates in value, the TIF would “capture” the increase in property taxes from the base rate and use those funds for other uses. The TIF also would capture 50% of sales and utility taxes from the development for other uses.
The districts argued the TIF would divert money needed to educate the more than 800 students expected to live in the developments and who would primarily attend three schools in the Parkway district. Parkway officials fear the TIF could cost it millions of dollars in revenue and force the district to add trailers for so many new students, seek a tax increase or redraw school boundaries. The district expects to lose between $44 million and $235 million over the TIF’s lifespan, depending on enrollment.
The city, meanwhile, said the projects would broaden the tax base, lessening the burden on the average Chesterfield resident. The districts, it said, exaggerated their student count estimates and that they’d net $216 million in additional revenue. The city projects the developments would add fewer than 300 new students.
Six people spoke during the roughly 35-minute meeting on Monday, including former Mayor John Nations, who criticized Parkway and its director of finance, saying the district would be in a worse financial situation without a TIF.
“Parkway’s hired no one to advise them. They have sent a staff accountant. I’m sure he’s very good at being a school accountant if you ask him how to finance a lunch program or run the bus system,” Nations said.
He suggested that the new developments could break off from the Rockwood and Parkway districts and create their own school district.
Monday’s recommendation is not binding, but a commission vote against the TIF would have required a two-thirds override from City Council and also restricted the use of the money.
Chesterfield has had just one other TIF, which paid for levee and road improvements while the city attracted new business to the area after major flooding in 1993. The city generated more revenue than expected and was able to retire the TIF about a decade early, officials said.