By Kari Williams
Aldermanic candidates offer their take on public subsidies
Crestwood aldermanic candidates voiced varying opinions on the use of tax-increment financing to help fund the redevelopment of Crestwood Court.
The aldermanic candidates spoke during a Jan. 24 forum sponsored by Ward 2 residents Tom Ford and Jacque Stock that attracted roughly 10 residents.
For the April 3 election, Crestwood will have two contested aldermanic races — in Ward 2 and Ward 4 — and three uncontested races.
In Ward 2, former Alderman Tim Trueblood and Mary Stadter are vying for the seat held by Chris Pickel, who did not file for re-election.
In Ward 4, Dan Tennessen and former Alderman Steve Nieder are vying for the seat held by Deborah Beezley, who did not file for re-election.
Ward 1 Alderman Darryl Wallach and Ward 3 Alderman Paul Duchild are unopposed in their re-election bids. In Ward 2, Robert Deutschmann is unopposed for the seat held by Steve Knarr. Knarr was appointed to the seat after former Alderman Jeff Schlink was elected mayor last April. The seat carries a one-year term.
Owners of Crestwood Court announced late last year they anticipate the redevelopment of the shopping center at Watson and Sappington roads will begin sometime this year. Centrum Properties and Angelo, Gordon & Co. bought the mall from the Westfield Group in March 2008 with the goal of redeveloping it, but their plans have been on hold due to the economy.
Sears, the mall’s last anchor store, was one of 100 to 120 stores Sears Holding Corp. announced would close due to lower-than-expected holiday sales.
Crestwood City Administrator Petree Eastman told aldermen she expects the mall’s owners to request “substantial public subsidies” in conjunction with the redevelopment project, including tax-increment financing, or TIF.
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 property 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 obligation.
At the forum, Trueblood said TIF originally was developed to help economically distressed areas produce sales tax revenue.
“When the building is complete and the development starts, the above-that baseline, if I can use that term, will go to pay off the bonds … In the long run, when it’s paid off, like it has been for Kohl’s in seven years, everyone’s a winner, the developer, the city, the districts. Everybody has that …,” Trueblood said.
To determine if TIF is appropriate for Crestwood Court, Duchild said he will look at the facts and come to a conclusion that best serves the city and Ward 3 residents.
Similarly, Wallach said it is important to listen to residents when the time comes.
“There will be a very large process to go through, and we would encourage the residents to come forward with their input … I want to hear the voices from the residents. That’s (why) it’s really important that the residents come to these meetings and speak out …,” Wallach said.
Stadter, who serves as vice chair of the city’s Public Works Board, said she does not know much about TIF yet but is willing to learn. As for Crestwood Court, she said she would have to take it on a “case-by-case basis.”
“I think that we would have to look at the whole problem and decide, as our aldermen had said, if it’s a good project for the city because I am well in favor of getting something rolling over there,” Stadter said, “but I think it needs to be a good, well-thought-out project.”
The Kohl’s and Sappington Square redevelopment projects also were brought up during the discussion. Public subsidies used to help develop Kohl’s included a TIF, which was retired in about seven years.
Sappington Square is a community improvement district, or CID. The Board of Aldermen tabled a second reading of an ordinance in May that would determine if the CID’s 1-percent sales tax would continue through a new development agreement with Pulaski Bank, which bought the Watson Road property after it foreclosed on the previous owner.
Mayor Jeff Schlink said the original Sappington Square redevelopment agreement stipulated the project needed a certain percentage of retail.
“Obviously the retail component is because you can’t pay anything off if you’re not generating (sales tax) … Right now, we don’t have a development agreement on there, but we continue to pay,” he said.
City officials have tried to work with Pulaski Bank, while Sappington Square shoppers continue to pay the additional 1-percent sales tax on purchases, according to the mayor.
Stadter said if a developer is not living up to an agreement, she would be more concerned about Crestwood residents rather than upsetting a developer.
“Now, 1 percent is not a huge amount obviously, but it’s the principal of the thing,” Stadter said. “… What is the right move for the community? What’s the right move for Crestwood?”
Wallach said the Kohl’s project was good for Crestwood, while Sappington Square was not “a well-thought-out project.”
“There’s good and bad, pros and cons to (issuing TIF). I’m not opposed to it, but again, I need to look at the different dynamics of it, what that project brings to Crestwood…,” Wallach said.
Trueblood, who served on the board when the Kohl’s TIF was approved, said his problem with TIF is it can reward owners for letting their property deteriorate. He also questioned what businesses the mall’s redevelopment could include that would generate revenue like Kohl’s.
“Right now, I don’t know anything you could put in there that would pay off that bond within the seven-year period of time our friends at Kohl’s could,” he said.
Nieder said whatever happens with the mall will not be a “major contributor to our tax base.”
“We’re going to have to make decisions on how we’re going to address that particular issue and what we want to look like for the next five to 10 years and then, further, how we’re going to sustain that,” he said. “It’s difficult to get a board of eight people, plus the mayor, on board with the same idea…”
Unless there is an understanding and agreement about how to move forward, the burden will fall on citizens’ shoulders from a property-tax standpoint, according to Nieder.
“I want to continue to enjoy that low tax rate, but we’re going to have to make some decisions there,” he said.
Tennessen, who serves on the city’s Economic Development Council, said he wants to bring business, manufacturers and residents together.
“I think the board, more than ever, is going to need to be a visionary and efficient at the same time … I am a little concerned that we keep feeling that the mall (Crestwood Court) is our only hope because we have a great retail and commercial real estate, not just Kohl’s, but many businesses in town,” Tennessen said.
Deutschmann said TIFs are “strictly to help cities” and the Kohl’s TIF was paid off “in record time.” He also noted the city’s Sam’s Club was developed without a TIF.