Over the objections of Lindbergh Schools representatives, the Crestwood Tax-Increment Financing Commission voted last week to recommend approval of UrbanStreet Group of Chicago’s proposal to redevelop the former Crestwood Plaza.
Commission members voted 8-2 Feb. 10 to adopt a resolution in support of UrbanStreet’s request for $25 million in economic assistance. The panel is a recommending body and the final decision on UrbanStreet’s proposal will be made by the city’s Board of Aldermen.
Voting in favor of the resolution were city representatives Greg Hall and Mike Balles and county representatives Margaret Hart-Mahon, Pam Reitz, Glenn Powers, Glenn Henninger, Thomas Curran and Thomas Malecek. Opposed were commission members Kara Horton, who serves on the Lindbergh Board of Education, and Charles Triplett, who serves as chief financial officer for Lindbergh Schools.
Commission Chairman Tim Trueblood was absent. Hall, the panel’s vice chairman, served as chair for the meeting.
UrbanStreet, which purchased the 47-acre mall site at Watson and Sappington roads for $2.265 million in 2014, is proposing a $104.3 million mixed-use redevelopment and is seeking $15 million in tax-increment financing, or TIF, assistance; $5 million in Community Improvement District funds; and $5 million in Transportation Development District funds. UrbanStreet’s proposal includes one large retail facility that could contain a grocery store, a multi-screen movie theater, a fitness center, two dine-in restaurants, an office building, a 225-unit apartment complex currently envisioned as senior housing and 11 to 13 acres of open space and community gardens.
Bob Burk, UrbanStreet managing partner, told the commission in December that no commitments from potential retail tenants for the proposed redevelopment can be secured until economic assistance is granted for the project. He also said the project will not proceed without the requested economic assistance.
Lindbergh Schools officials support the redevelopment of the mall, but have concerns about UrbanStreet’s proposal, particularly the residential component and Burk’s contention that no commitments from potential retail tenants can be secured until economic assistance is granted.
During a presentation at the commission’s Feb. 3 public hearing, Burk noted that if children occupied all of the residential part of the site, Lindbergh would receive an estimated average of $150,000 each year from the passed-through taxes.
But Triplett last week noted that UrbanStreet successfully appealed the 2014 assessed value of the mall property and is appealing the site’s 2015 assessed value.
“Just as a point of fact, that (the appeal) will reduce the revenue to the school district from $147,000 to about $52,000 a year,” Triplett said. “So that’s a $95,000 true revenue loss to the school district through that appeal. So any pass-through that might come to the school district from kids being in the property, $95,000 at least has been financed through the lowering of the assessed value.”
Burk said, “… I don’t know if it’s been financed through it. It’s just that the assessed valuation dropped — clearly because of our purchase price, and the value of the property has dropped … Really, those two don’t correlate to anything as far as a financing instrument goes.”
Triplett also asked Burk if UrbanStreet is committed to developing the entire site.
Burk said, “We’re the master developer, absolutely, and we would hope to fill in the component pieces … We’ve been very up front on that. If someone wants to purchase a piece of it under our master umbrella, which is a very major component of our presentation … That’s why we want to master develop the thing, so that it’s a very consistent development plan.
“But if you’re asking me if I will necessarily personally develop each component piece, probably I can’t answer that definitively yes. We certainly have the wherewithal to do each piece, but it might work out for us to have others under our umbrella, and I think the development agreement that we’ve been working with, with the city outlines that pretty clearly.”
Triplett asked, “So you would sell a portion or all of the property, depending on who made the offer and what the piece was to fit into the development plan?”
Burn said, “If it fits into our master development plan, there could be component pieces, absolutely.”
Triplett asked, “… Have you had any offers for purchasing some or all of the property?”
Burn replied, “Yes.”
“And what’s the status of those offers?” Triplett asked.
“It’s in the LOI (letter of intent) stage per our discussions,” Burk responded.
Triplett later asked the city’s planning consultant for the project, John Brancaglione of Peckham Guyton Albers & Viets, or PGAV, about the $15 million in TIF assistance.
“… So if the $15 million TIF is being paid for by generated value of the new development, that’s not money coming out of these jurisdictions’ pockets, but it’s definitely money not going into these jurisdictions’ pockets. Is that fair to say?” he asked.
Brancaglione said, “Correct.”
Triplett said, “All right. So the Lindbergh School District is 60 percent of that. So of that $15 million, $9 million will not come to the school district, but will go to pay off the TIF? Is that correct?”
Brancaglione said, “That’s correct.”
But Andy Struckhoff of PGAV clarified, “The $15 million in TIF is paid for in part by sales taxes — a large portion of it … It’s not all property-tax revenue.”
Triplett said, “OK. Sales tax, though, also does come to the school district through the county tax function there. So it may not be exact. Fair to say a large portion of the TIF would be paid for from dollars that would come to the school district if there was no TIF?”
Struckhoff said that would be fair.
Triplett noted the TIF would have a minimal impact on Crestwood compared to other taxing jurisdictions.
“… The city of Crestwood is only 5 percent. So they don’t represent these other 13 jurisdictions. The city of Crestwood aldermen represent the city of Crestwood, and that’s how that works. But yet they will have total say over whether or not a TIF goes through on this …,” he said. “So they have a 5 percent stake, if you will, versus 95 percent for everybody else. That 5 percent for the city is less than $800,000 over the life of the TIF …”
Brancaglione said, “… You have a hypothetical that assumes it would develop without TIF.”
Triplett said, “Correct.”
“I just don’t think that’s realistic,” Brancaglione said.