Crestwood part of suit challenging new TIF law

Six cities join county municipal league to sue state

By BURKE WASSON

A group of St. Louis County municipalities, including Crestwood, has filed a lawsuit challenging changes to the state’s tax-increment financing law adopted last year by the Legislature.

Crestwood City Administrator Frank Myers said Crestwood has joined the legal challenge being organized by the St. Louis County Municipal League to stop the formation of new tax-increment financing, or TIF, commissions.

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 has been questioned.

Bond-counsel firms in Missouri will not issue bonds for any TIF district until legal questions relating to the newly formed TIF commissions have been settled.

Representatives for those firms have also said that a decision on those TIF commissions could come as late as August, delaying development or redevelopment projects in all three counties until then.

With plans to redevelop the Westfield Shoppingtown Crestwood property through the use of such tax tools as TIF, Crestwood officials decided last week 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.

The petition for declaratory judgment was filed Feb. 15 in Cole County against Gov. Matt Blunt, Attorney General Jay Nixon and the Missouri Department of Economic Development. The cities are being represented by the law firm of Curtis, Heinz, Garrett & O’Keefe.

Firm attorney Paul Martin told the Call that because the TIF Act amendments approved last year by the Legislature essentially stall the consideration of any TIF projects in the three counties, the cities involved saw no other choice than to file suit.

“As it stands right now, the law does tie cities’ hands in St. Louis County, Jefferson County and St. Charles County and really prevents any realistic use of the TIF law,” Martin said. “I can say that the cities are not objecting to the substance of the law. But the way that it is phrased prevents them from doing any TIF redevelopment. And that is the purpose of the lawsuit.”

The lawsuit alleges the TIF Act amendments have caused “irreparable harm” to cities in all three counties and states that the “amendments are unconstitutional, illegal and void” because “there is no substantial jurisdiction for treating the cities within these three counties differently than the cities located elsewhere in Missouri.”

The petition also states:

“… The cities will not be able to issue marketable TIF bonds for the funding of any public improvements associated with a TIF redevelopment, as bond counsel will be unable to provide an opinion as to the legality of the process on which the issuance is based … The cities’ effort and expense in considering and approving the TIF redevelopment would be wasted, pointless, and futile, as the unconstitutional amendments would frustrate the use of tax increment financing by denying the cities’ ability to eliminate blighted and conservation areas …

“The unconstitutional amendments will have subjected the cities to a statutory process for TIF redevelopment that requires additional and more restrictive burdens than the process utilized by every other city in the state of Missouri, exclusive of cities located in the counties of Jefferson, St. Charles and St. Louis.”

The petition requests that the court declare the changes to be “unconstitutional, illegal and void, sever these sections from the remainder of the TIF Act, grant the plaintiffs their costs and award such further relief as is just and proper.”

“Hopefully, the Legislature will fix the problem this session,” Martin said. “The changes that need to be made are very simple. But our clients felt that we needed to have this litigation on file in an effort to make sure that if the legislation doesn’t get fixed that we can go ahead and pursue this remedy and hopefully get back to where we used to be at least so that we can do TIF redevelopment again.

“Right now, there isn’t even a possibility. I’m not saying that any of these clients have any projects in mind. But without having a law that works, they can’t even consider it,” Martin added.

Crestwood officials already have planned on considering the use of TIF for the redevelopment of the Westfield Shoppingtown Crestwood after a pending sale of that mall property has been completed.

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.

Last week in closed session, board President Gregg Roby of Ward 3, Ward 1 Alderman Richard Bland and Ward 2 Alderman Chris Pickel voted “yes” to participate in the lawsuit.

Ward 1 Alderman Mac McGee, Ward 3 Alderman Jerry Miguel and Ward 4 Alder-man Steve Nieder voted “no.”

Ward 2 Alderman Steve Knarr and Ward 4 Alderman John Foote were excused from the Feb. 12 meeting.

Roby said last week while there are arguments that can be reasonably made for and against the use of TIF, the city still should retain the right to consider its use.

“When you start eliminating the ability for developers to utilize redevelopment tools and for the cities to offer those, it can be very detrimental,” Roby said. “On the other side of the coin, there are people that are going to say TIFs are just a way of paying for development and it costs the taxpayers. And I think there’s some truth to that as well. But I think it all boils down to the fact that without the opportunity and the possibility of TIF, large developments that would benefit the city are a lot less likely.

“… We’re a small community, but obviously we have a lot at stake here. With the mall and other potential areas of redevelopment, it’s tough for a city like Crestwood to just stand by and take a do-nothing attitude.”

Roby also hopes that a lawsuit filed by multiple cities will catch the Legislature’s attention.

“I think the message needs to be sent to the Legislature that when you guys come up with programs like this that are obviously as poorly thought out as this one was, there’s a price to pay for that,” Roby said. “And that price may be don’t look for anybody to re-elect you, at least not in St. Louis County. And I think that’s a message that needs to be sent to these people. You cannot just enact legislation without some repercussion if you haven’t given thought to what you’ve just elected to do.”