Crestwood economic panel to hear presentation on mall redevelopment

New law resolves questions about tax-increment financing

By BURKE WASSON

Crestwood Economic Development Com-mission members were scheduled to hear a presentation this week about the redevelopment of Crestwood Court.

Jones Lang LaSalle Marketing Manager Leisa Son was scheduled Tuesday — after the Call went to press — to give a presentation to the commission about the redevelopment of Crestwood’s mall.

While the Crestwood mall is owned by Centrum Properties and Angelo, Gordon & Co., Son will give her presentation on behalf of Jones Lang LaSalle, a financial and professional-services firm that specializes in real estate and investment management.

The redevelopment now can include tax-increment financing, or TIF, as Lt. Gov. Peter Kinder in June signed Senate Bill 718, which allows for the creation of a new TIF commission structure in St. Louis County, Jefferson County and St. Charles County.

The St. Louis County Municipal League recently dropped a lawsuit that had been filed in February on behalf of six St. Louis County municipalities, including Crestwood, that challenged the formation of new TIF commissions approved in 2007 by the Legislature.

Because the Legislature mandated the establishment of new 12-member TIF commissions in St. Louis County, Jefferson County and St. Charles County, the powers of already-existing TIF commissions in various municipalities were questioned. Bond-counsel firms in Missouri would not issue bonds for any TIF district until legal questions relating to the newly formed TIF commissions were settled.

But Senate Bill 718 has settled those questions, and the new municipal TIF commission will include six members appointed by the county executive, three members representing the city, two members representing the local school district and one member representing all other taxing districts in the proposed redevelopment area.

The new TIF law is effective Aug. 28.

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.

Attorney Paul Martin, who represented the cities in the lawsuit, has said that Senate Bill 718 has settled his clients’ dispute and TIF projects now can proceed.

“It’s because of the new legislation that was signed that fixed the constitutional problems that we had with the lawsuit,” Martin said. “So there wasn’t any reason for the lawsuit anymore.”

With plans to redevelop the Crestwood mall property through the use of such tax tools as TIF, Crestwood officials had decided to join with the St. Louis County Municipal League as well as the cities of Ellisville, St. Ann, University City, Olivette and Maplewood in filing suit.

To follow through on retaining the right to consider TIF for that project, Mayor Roy Robinson broke a 3-3 tie among aldermen in a Feb. 12 closed session to vote “yes” to authorize Crestwood’s participation in the lawsuit at a cost not to exceed $10,000.

At Robinson’s request last fall, aldermen had appropriated $30,000 in the 2008 budget for “potential legal fees” tied to the redevelopment of the mall. Crestwood’s legal fees for the now-dropped TIF lawsuit were just shy of $3,000.

Now that the lawsuit has been settled, Crestwood officials can focus on determining the appropriate tools to assist the mall’s owners in redevelopment.

Robinson has indicated that he would consider offering TIF as well as a CID, or community-improvement district, and a TDD, or transportation-development district, to ease costs of the mall’s redevelopment. That cost would be eased through the collection of an additional sales tax or property tax imposed on the mall property.

Previously discussed plans for the mall, which has sustained annual declines in sales-tax revenue and a deteriorating structure, have included converting the mall into a mixed-use development as part of a project valued more than $200 million.

As previously reported, the site is expected to be redesigned as a “town center” with a square or fountain serving as a centerpiece. Its focus will remain retail, but some residential pieces are being considered. In addition, Centrum and Angelo, Gordon are planning a larger movie theater, restaurants and a facility to house outdoor concerts.

While the mall today is roughly 1 million square feet, the new owners have indicated that the new redevelopment would be 500,000 to 1 million square feet. Mall owners also have proposed raising the mall’s parking lot to street level along Watson Road and have shared with aldermen that Macy’s perhaps is the only anchor building that will remain after redevelopment.

City officials speculated last year that the mall’s redevelopment likely would be done in three phases at a cost of more than $200 million. Robinson has said that he has told Crestwood Court’s owners that the mall “will” be redeveloped in phases to allow the city to continue collecting revenue from existing stores.

Centrum and Angelo, Gordon purchased the former Westfield Shoppingtown Crestwood in March for $17.5 million, according to St. Louis County records. The West-field Group acquired the property in 1998 for $106 million.

The two companies merged on the sale as brothers Sol and Keith Barket, originally from the Affton area, represent both. While Sol Barket is Centrum’s managing partner of retail development, Keith Barket is senior managing director of Angelo, Gordon.

More than half of the mall’s retail shops are vacant, and the city has struggled to gain sales-tax revenue from Crestwood Court. While city officials reported last year that 53 percent of Crestwood’s sales-tax revenue comes from the mall, that percentage has dropped in recent months.