A public hearing on G.J. Grewe Inc.’s proposed redevelopment plan for the Watson Plaza shopping center will be conducted next week by the Crestwood Tax Increment Financing Commission.
The public hearing will take place at 7 p.m. Tuesday, July 6, at the Crestwood City Hall, 1 Detjen Drive.
Watson Plaza is adjacent to the city’s Watson/Sappington Road Redevelopment Area where a Kohl’s Department Store opened last fall.
The proposed Watson Plaza Redevelopment Area is comprised of six parcels of land totaling roughly 18.42 acres.
G.J. Grewe Inc. was the only company to respond to the city’s request for proposals to redevelop the shopping center and the Board of Aldermen in March voted unanimously to adopt an ordinance selecting the company as the preferred developer for the redevelopment of Watson Plaza.
Besides referring G.J. Grewe’s redevelopment proposal to the city’s TIF Commission, the board’s action approved a preliminary funding agreement in which the company will provide $50,000 for legal, planning and consulting services involved in the redevelopment process.
In its plan, G.J. Grewe Inc. is proposing a PETCO and a new Walgreens on the site of the vacant Tippin’s restaurant as well as retaining the shopping center’s existing tenants.
The company owns the entire shopping center with the exception of the former Service Merchandise building, which it has under contract to purchase.
The cost of the proposal is estimated at $11,226,305, excluding funding generated by a Transportation Development District that would be used to pay for improvements to Watson Road that would enhance the flow of traffic.
Besides TDD funds to offset transportation-related expenses, G.J. Grewe Inc. is seeking $2 million in tax-increment financing to facilitate land-acquisition costs. As proposed, the TIF obligation would be retired in seven years.
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 obligations. The incremental property tax revenue, also called payments in lieu of taxes, or PILOTs, are deposited into a special allocation fund that is used to retire the TIF obligations.
During a May 26 meeting of the TIF Commission, Tom Curran, a commission member who is representing St. Louis County, noted that John Brancaglione of Peckham Guyton Albers & Viets Inc., who serves as the city’s planner, had said the period of time to retire the TIF obligations would be seven years — with or without the PILOTs.
Given that, Curran suggested the TIF Commission consider whether to recommend the PILOTs be excluded from retiring any TIF obligations and be passed through to such taxing entities as the Lindbergh School District, which then would immediately benefit from the redevelopment project.
TIF Commission members considered Curran’s suggestion June 21 and agreed to incorporate the PILOTs pass-through as part of the redevelopment plan that will be considered at the public hearing next week.
At the June 21 meeting, Matt Conley, assistant to Crestwood City Administrator Don Greer, noted that representatives of the city met with Pat Lanane of the Lindbergh School District.
Lanane, assistant superintendent for finance and the school district’s chief financial officer, is serving as vice chairman of the TIF Commission and chaired last week’s meeting in the absence of Chairman Pat Kapsar.
Conley said, “… (The) Lindbergh School District and the Special School District that they represent hold about 69 percent of the property tax levy which is in the project area. Basically, we discussed the parameters for a PILOT pass-through … Based on the initial conversations with the school district and internally, staff is going to recommend, should the project be forwarded to the Board of Aldermen, staff will recommend that the Board of Aldermen and the city pass through the PILOT increment to all affected taxing jurisdictions and that includes the school district, the Special School District and all the other taxing jurisdictions.
“One of the key aspects of the conversation with the school district was that the city’s position is that we would probably pass through the PILOTs provided that there is no recommendation or request from the school district that the city contribute a portion of its bottom half of the sales tax and the school district has indicated they will not be seeking such a request. Based on that, we don’t have any problem passing the PILOTs through. They represent a relatively small proportion of revenue for the project and as John indicated at the last meeting, including them does not reduce the payout period significantly for the TIF. So based on that, the TIF Commission can recommend that the PILOTs be passed through as part of the redevelopment plan …,” Conley said.
Lanane said, “… I would just say from the school district’s standpoint, this is a great precedent. We think this is how they should all be done, to be quite honest, that all that should be passed through, so we think it sets a great precedent. Believe me, some of the other jurisdictions who have TIFs will know about this, I certainly can guarantee you that …”
Conley interjected, “Or contemplating TIFs, perhaps.”
Lanane said, “Yes … we really want to be on the side of redevelopment. Certainly that’s in everyone’s interest to have that kind of economic redevelopment and there’s absolutely, as I said I think at least four or five times (at) the last meeting, there’s no doubt that that center desperately needs some redevelopment.
“All you have to do is drive through it and count the number of cars and it’s pretty evident that really the premier property in Crestwood as you’re coming in from the west is in need,” Lanane continued.
“So we’re pleased that this is able to put us in a position to support the redevelopment and to help Crestwood, which, in turn, also helps the Lindbergh School District,” he added.
