Building trades official urges Crestwood board to nix Mills’ plan for Hillside Village site

Criticizes developer, potential use of tax tools

By MIKE ANTHONY

Executive Editor

A Building and Construction Trades Council official recently implored the Crestwood Board of Aldermen to reject a redevelopment proposal, voicing concerns about the developer and decrying the use of any public funds to subsidize the project.

Jerry Feldhaus, executive secretary/treasurer of the Building and Construction Trades Council of Greater St. Louis, last week urged the Board of Aldermen to reject a proposal by Mills Properties Inc. to redevelop the southeast corner of Watson and Grant roads.

Mills Properties is proposing to redevelop the nearly 19-acre Hillside Village site as Boulder Springs at Crestwood – similar to the Boulder Springs at Maryland Heights project that Mills completed in 2000 at Interstate 270 and Page Avenue.

Mills Properties is proposing a $45 million development that would include about 240 luxury apartment units and 26 luxury condominiums.

As proposed, the project could involve the use of tax-increment financing and the creation of a Neighborhood Improvement District – two tax tools used to help offset the cost of public improvements.

Feldhaus was critical of Mills Properties and the possible use of tax tools, saying, ”

Mills Properties is proposing a $45 million development that would include about 240 luxury apartment units and 26 luxury condominiums.

Before Feldhaus spoke, the Board of Al-dermen voted 5-0 with one abstention and two aldermen absent to select Mills Prop-erties as the preferred developer for the proposed redevelopment of the corner and to approve a preliminary funding agreement with the developer.

Voting in favor of the measure were Ward 1 Alderman Richard LaBore, Ward 2 Alderman Tim Trueblood, Ward 3 Alder-man “Bernie” Alexander, Ward 4 Alder-man Pat Duwe and Ward 4 Alderman Tom Fagan. Ward 2 Alderman Gary Vincent ab-stained, while Ward 1 Alderman Richard Breeding and Ward 3 Alderman Don Mad-dox were absent.

Under the preliminary funding agreement, the city has received $50,000 from Mills Properties that will be used for costs associated with the preparation of the redevelopment plan, negotiation of a redevelopment agreement and other costs associated with the project.

As proposed, the project could involve the use of tax-increment financing and the creation of a Neighborhood Improvement District – two tax tools used to help offset the cost of public improvements. Use of a Neighborhood Improvement District would allow the city to shift its annual $13,000 payment to the Affton Fire Pro-tection District from the city’s general fund. A fully developed site would generate about $70,000 in per-capita taxes be-ginning with the 2010 census.

However, the city would lose about $100,000 in revenues generated by the capital-improvement sales tax and the parks and stormwater sales tax. Though the city would lose about $100,000 in sales-tax revenue, the $70,000 in per-capita taxes would go directly to the city’s general fund.

Feldhaus was critical of Mills Properties and the possible use of tax tools, saying, “It is time our communities say no to giveaways to wealthy developers and builders.”

The site is comprised of two parcels. The larger of the two parcels contains Value City and is owned by Joe Grasso, while the smaller parcel contains the Creston Center and is owned by Crest Develop-ment. Ken Boegeman of Crest Develop-ment repeatedly has asked that the Creston Center site be excluded from the proposed redevelopment. Boegeman has said his property is not for sale and has questioned the long-term value to the city by redeveloping the site. Crest Development is spending $150,000 to $200,000 to renovate the Creston Center.

Grasso told aldermen Jan. 28 that his property was for sale “for a price,” but he didn’t believe Mills Properties could meet that price.

In his remarks, Feldhaus noted that he represents 40,000 skilled tradesmen and women living in the metropolitan area, many of whom reside in Crestwood.

“I’m here tonight to express our concerns and disapproval of the plan by Mills Properties to redevelop the southeast corner of Watson and Grant roads and ask for serious reconsideration and rejection of this project. I know the enticement of a $45 million development is strong, but development at any price? Our objections are based on several key factors,” he said.

“First, both key property owners are opposed to taking their parcels and we agree with them. Private property ownership is the cornerstone of our democracy and nothing should be done to change that. If both property owners continue their opposition, the only way Mills can grab that property will be for the city to exercise eminent domain and force its sale and we feel that’s simply un-American.

“Second, both property owners want to improve their property themselves without any tax giveaways that Mills is demanding. It is our understanding that Crest De-velopment is already investing $150,000 to $200,000 of his own money, not taxpayer-subsidized funds, to bring the Creston Center up to Class-A status without a tax grab as proposed by Mills Prop-erties. And Mr. Grasso has also made it clear that he has no desire to want to sell his property,” Feldhaus continued.

“Third, we understand that the redevelopment will mean a net loss to the city in property taxes. If the development reaches its full potential, and that’s a big if, in 2010 it is supposed to generate $83,000 in revenue. Meanwhile, you’ll be losing $100,000 a year – a year – from capital-improvement funds and park and stormwater sales taxes. Does that make sense simply to have more housing? Are residents of Crestwood prepared to subsidize this development just to have luxury houses in the community? I think not.

“Fourth, property tax owners will be forced to pick up a $13,000 tab for fire protection costs because Mills also wants a Neighborhood Improvement District developed to further subsidize this project and, I might add, increase his profits. I wonder if you put that to a vote of your residents if they will agree to further subsidize a wealthy developer by adding to their own tax burden,” he said.

“Fifth, all the income projected by Mr. Mills are based on their full rental of 226 apartments and selling their 24 condos. What happens if they’re not all rented and their condos don’t sell for the price that he’s asking for? And what if he sells them off to a speculator, someone you had no dealings with and might not even want to have dealings with? A further financial gap will be created, making the loss to Crest-wood even greater. And if they don’t rent all of them regularly and Mr. Mills doesn’t have his projected income, will the properties eventually fall into disrepair and create an eyesore for the neighborhoods and, in fact, area property taxes? All this could happen, no one has a crystal ball that says it will all be rosy,” Feldhaus added.

“Finally, there’s an issue close to my heart. Mr. Mills is notorious for bringing in out-of-state contractors and workers to build his projects. They’re not local residents living in the community. They pay no property taxes, no sales taxes and do little to support our community’s social, civic and economic base. They take their paychecks and go back home to Arkansas, Oklahoma or Mexico and spend most of their money there, providing very little positive economic impact on Crestwood, and the stories of their poor quality of workmanship by such so-called tradesmen are legendary. Can you imagine what that means to the nearby property taxes in a few years after the buildings begin to age?

“Ladies and gentlemen, I’ve only highlighted some of the major concerns we have as the building trades. They are serious enough that they should give you a pause before allowing Mills to rip off taxpayers of your community. Mills is a wealthy company. If they’re so sure this would be a good project, then let them fi-nance it themselves. You don’t need to be providing public money, which is tight enough today, when there are many other needs in Crestwood screaming for money. It is time our communities say no to giveaways to wealthy developers and builders. They make plenty of profits. Let them put their own money at risk and earn those profits the old-fashioned way, without the public having to subsidize them,” he said.

The Board of Aldermen next week will consider a blighting analysis of the site conducted by Peckham, Guyton, Albers & Viets.

The results of the analysis will determine whether the city can move forward with the creation of TIF District for the site.