As Crestwood aldermen consider utilizing economic-development tax tools to attract more business development, they also would like to further educate the public about them.
One of more than 25 goals proposed by aldermen at the city’s recent strategic-planning sessions is “educating citizens on the use of tax incentives.”
City officials have said they are open to several tax-incentive options to redevelop the city’s key source of sales-tax revenue, the Westfield Shoppingtown Crestwood.
In the city’s RDP, or request for development proposals, sent to 82 developers in September, the city indicates it is willing to use tax-increment financing, or TIF, a community-improvement district, or CID, or a transportation-development district, or TDD.
Because of this potential use of these tools along with city officials’ perception that some residents have grown concerned about the authorization of these tax incentives to developers, Ward 2 Alderman Steve Knarr proposed an effort to better communicate the purposes of these tools to residents.
“The way I look at these tools, they’re a way for Crestwood to invest in its future,” Knarr said during the Sept. 26 strategic-planning session. “And I look at them as investments — not necessarily giving away something to get something back. If you own a home and you want to keep it up and maintain its value, you have to continually invest in it. And I think the same goes for the community. Maybe the perception out there needs some education from us to communicate that these tools aren’t just giveaway vehicles. They’re really meant for communities to save themselves.”
Besides the expectation of using such taxing tools — designed to be collected through sales tax and then reimbursed to developers over time for their upfront project costs — at the mall, Crestwood also has approved their use at other sites.
Sappington Square, being developed across from the Crestwood mall, will have a one-cent sales tax to pay up to $2.5 million in project costs to the Sappington Square Corp. Crestwood Square, which G.J. Grewe Inc. already redeveloped, also has a one-cent sales tax to pay up to $2 million in project costs to Grewe. Other taxing tools still in use in the city include additional sales taxes at Crestwood Point, Watson Plaza and Big Bend Crossing.
While city officials have heard residents’ concerns on additional sales taxes at these shopping centers, Mayor Roy Robinson said he can understand their criticism, but also has realized that these taxing tools are sometimes necessary to attract more business to Crestwood.
“You don’t have to open up the whole toolbox to get the business in here,” he said. “The senior-citizen facility (near the Creston Center) cost us nothing in toolboxes. The Sappington Square new development across from the mall, that only cost a CID and a TDD … I think Crestwood Square only cost us a CID. I mean, it’s not like we use, we just throw it at them … One of the things that I think is a perception out in the public is in order to get these people to come in, we’re going to tell them what we’re going to give them. Absolutely we never do that. We always let them come forward and tell us what they want to do and then we try to find out what it is, what’s going to pay for the city to be able to get what’s accomplished. And we don’t throw out numbers. But some people do.”
Ward 4 Alderman Steve Nieder believes that while many residents understand the concept of these taxing tools, he understands why some are skeptical because he believes the city did not “validate” the authorization of these tools in the past.
“What you’re doing is you’re giving taxpayer dollars to the business,” Nieder said. “That’s what’s transferred. No matter how you paste it, say it or whatever, that’s actually what’s happening. There’s a transfer of money going on. Now I don’t think that’s a real problem. That’s a start of a question mark. I think the people are more concerned about validating was it the proper amount to do. That’s a validation. And that’s what this city didn’t do before. And before we all came on the board, there was no validation. It was just an open book.
“And that’s what most of the citizens, I think I’m absolutely positive, objected to. There was no validation. We just put a policy together that validates everything. And it will be on paper. So any citizen that has that question mark when it comes down to that can go to city hall and ask for that and read through it at their own discretion.”
As Nieder noted, city officials have formed an economic-development application for developers requesting public assistance. The application would be completed when developers request assistance in the form of economic-development taxing tools.
As originally proposed, each request for public monies to help fund developments would be evaluated by an executive review committee of city employees and administrators. If recommended as a viable need, the application would be presented to aldermen. The city’s proposed application sprang from the city’s 2006 strategic-planning sessions.
One of the functions of these applications is to alleviate some of the uncertainty and tension surrounding proposals for such taxing tools, as City Administrator Frank Myers alluded to during this year’s strategic-planning sessions.
“… That’s always the challenge for policymakers. It’s when to give it to make it happen or, you know, do you trust a developer completely that says they need it and, you know, you were going to give it and it happens or would it happen anyway …,” he said. “And that’s always a tension, I think, in public policy giving tax incentives to developers because you don’t know because … at what level do you trust a developer? … And I think that is a tension in a community that’s coming out in a full recovery as this. How much do you have to give to get? And it’s just a struggle. It is a challenge …”
Ward 1 Alderman Richard Bland said he will continue to support the responsible issuance of development tools because, without them, the city will lose prospective businesses to other areas.
“Unfortunately, we’re in a position where if we don’t use a lot of those tools, we’re really the hole in the donut because there’s a lot of other places where businesses will pass us by and move to,” Bland said. “I think it’s incumbent upon us to use them as judiciously as we can and not just hand them out like Halloween candy. But I’ve got to agree with the mayor. I think if we would have said we are not using economic tools of any kind, I think you’d see a very different landscape in this city today.”
The Call will further report on Crest-wood’s strategic-planning sessions in future issues.