With the final payment processed on a more than $2 million tax-increment financing — or TIF — note related to the Kohl’s project at Sappington and Watson roads, Crestwood aldermen last week voted to close out the associated TIF district.
The board voted unanimously May 11 to adopt an ordinance that dissolves the Sappington/Watson, or Crestwood Point, TIF district as of May 31 and authorizes the city’s finance officer to withdraw up to $56,000 from the TIF fund to pay various close-out costs.
Aldermen in December 1998 approved a redevelopment plan for the northwest corner of Watson and Sappington roads that called for the demolition of existing structures on the site, including a building that housed a bank and a number of medical, dental and professional offices. The city then sought redevelopment proposals for the corner and in January 1999, the board voted to approve a redevelopment agreement with THF Realty that granted the de-veloper nearly $2 million in TIF assistance for the corner’s redevelopment.
In October 2000, the aldermen approved an amended redevelopment agreement with THF that called for a Kohl’s department store to be located on the corner.
The amended redevelopment pact also increased the amount of TIF assistance THF was eligible to receive by $375,000 — to $2.285 million from $1.91 million. In addition, the amended pact created a transportation development district and a community improvement district, two funding mechanisms that brought the total assistance package THF Realty was eligible to receive to $3.5 million.
An 88,000 square-foot Kohl’s opened in October 2003.
The city in April 2004 issued TIF notes not to exceed $2.285 million to reimburse THF for certain redevelopment costs.
That debt has been financed through TIF district receipts.
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 land 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.
The Crestwood Point TIF fund contained $148,339 in both economic activity taxes and payments in lieu of taxes generated by the TIF district as of May 4, with another distribution of economic activity taxes ex-pected May 10, according to Finance Officer Douglas Brewer.
The ordinance aldermen approved May 11 allows Brewer to withdraw an amount not to exceed $56,000 from the TIF fund to pay costs associated with closing the TIF district, which include legal expenses incurred, interest-free, over the past six years to TIF legal counsel Armstrong Teasdale.
All remaining TIF moneys will be sent to St. Louis County and redistributed to affected taxing districts. Crestwood expects to receive $70,000 back in June as sales and property tax revenues, according to Brewer.
The roughly $3 million Crestwood Point TDD and roughly $500,000 CID on the property still are outstanding. Kohl’s shoppers will continue to pay a 1 percent sales tax toward the TDD. However, officials expect the payment of the remaining debt to be accelerated as property and sales taxes that were going toward the TIF will now be used to retire the TDD and CID.
“What will happen now that the TIF is being closed out is that those moneys will help accelerate the retirement of that other debt — which is not city debt but the debt of those separate districts,” attorney Robert Klahr of Armstrong Teasdale told aldermen May 11. “But the upshot of all this tonight will be that it will accelerate the repayment of that debt so that hopefully in some number of years in the future those will also be paid off.”
In other business May 11, the board:
Approved the appointments of Robert Wagner, Russell Whitner, John Morrissette and Ward 4 Alderman John Foote to the Crestwood Memorial Committee.
Voted unanimously to authorize the city to execute a $518,000 contract with West Contracting for an asphalt mill and overlay on a number of streets in the city. Of the 10 bids the city received, West Contracting submitted the lowest bid, $500,190. The contract will include a $17,810 contingency, or 3.5 percent of the bid amount.
Took no action toward opting out of the state sales tax holiday during the first weekend in August in which shoppers don’t pay state or local sales taxes on back-to-school purchases such as clothing and school supplies. If the board decides it does not want to participate in the sales tax holiday, it would have to pass an “opt-out” ordinance by its June 22 meeting.
Elected Ward 1 Alderman Darryl Wallach board president.