Helen’s and hotel want tax incentives vote

The+new+Comfort+Suites+development+next+to+Helen+Fitzgerald%E2%80%99s+under+construction%2C+as+seen+July+17%2C+2020.

Photo by Erin Achenbach

The new Comfort Suites development next to Helen Fitzgerald’s under construction, as seen July 17, 2020.

By Erin Achenbach, Staff Reporter

A final vote on a Sunset Hills bill that would grant tax incentives to Helen Fitzgerald’s and a new hotel on Lindbergh Boulevard in Sunset Hills was postponed to August at the developer’s request.

The bill, which first came up for discussion June 23, was scheduled for a second reading at the July 14 meeting, but the attorney for new Comfort Suites owner HR Sheevam, real-estate attorney Andrew Ruben of Sandberg Phoenix, asked the board for more time to address some of the concerns aldermen brought up at the first reading.

Sheevam is asking for a Community Improvement District or CID, in which visitors would pay higher sales taxes to make improvements at the property, and a Section 353 tax abatement, which grants a similar subsidy as tax-increment financing but does not require a TIF Commission to convene.

The board will hold a special videoconferenced meeting to discuss the issue at 6 p.m. Tuesday, July 28. Two public hearings and a potential vote could happen at the meeting scheduled for 6 p.m. Tuesday, Aug. 11, which could also be virtual. Ruben said he hopes the vote on the CID will happen at the same meeting as the public hearing for the Section 353 tax abatement on the property.

When the board first heard Sheevam and Helen Fitzgerald’s proposal in January, it was met with some skepticism from both residents and aldermen.

The developer is seeking a 25-year tax abatement with the 2019 tax year as the base, which would ensure that taxing districts collect tax as they have in 2019 through the first 10 years, then add a 50-percent abatement in years 16 to 25.

The funds would be used for an additional phase of Sheevam’s ongoing hotel project to replace the Days Inn at the site and would create a parking garage to alleviate parking problems at Helen’s and the hotel.

In March, a contentious piece of legislation was passed 5-2 by the board that will allow the city to declare properties “blighted” and grant tax abatements to redevelop them.

The ordinance applies citywide, but it was brought to the table by Sheevam.

During a public hearing on the CID June 23, Ruben and Laura Lashley, a principal with economic development firm Development Dynamics, told the board that establishing the CID was time-sensitive, due to a piece of legislation that had passed the Missouri Legislature this recent session.

“The reason the CID has become critically important from a timing standpoint is that … the Missouri state Legislature fully passed House Bill 1854 … which contained significant rewrites to community improvement procedures,” said Ruben.

“That legislation drastically changes the mechanics of implementing a sales tax for a special district, so obviously it would impact a Community Improvement District. … The new legislation would require a vote of the entire city population who is registered to vote on any action,” added Lashley. “Essentially … would probably be a disastrous outcome for any special district.”

Under current legislation, only property owners within the Community Improvement District vote in a sales tax election.

HB 1854 was vetoed by Gov. Mike Parson July 14. If he had signed the bill, it would have gone into effect Aug. 25.

“We are trying to accelerate things. … We’ve been in front of you before. We kind of waited through the election stuff and just as we were ready to pull the trigger on things, then COVID hit,” said Lashley. “We’ve had a couple of unusual things kind of delaying our process, otherwise I think we’d honestly already be finished with this.”

Under the developer’s proposal, the CID would add a 1-percent sales tax at Helen’s, along with a tax on the hotel rooms at $4 per room per night. The two taxes would make up the tax revenues that would reimburse the improvements in the CID, such as improved parking and facade updates at Helen Fitzgerald’s. Both taxes would be new and specific to the site only.

“We view this as a partnership. You see Phase 1, the Comfort Suites, is up and under construction to be finished and completed by the end of the year. We’re really talking about the potential of Phase 2 and the parking garage and improvements for Helen Fitzgerald’s,” said Lashley. “And this is the time period when an entity is looking at doing incentives. … You do it before the plans are submitted, you do it before engineered drawings are submitted. This is the time period that you put forth the incentives that are needed to make things happen.”

Kirk Syberg, whose restaurant group Syberg’s Family Restaurants owns Helen Fitzgerald’s, said that he is eager to improve the parking situation at the restaurant.

“This particular site, it lays out perfectly for a garage. We’ve always struggled with parking there (Helen’s), getting in and out of there, making our customers feel comfortable getting in and having a place to park without having to walk half a mile,” said Syberg.

CIDs have been used in Sunset Hills previously, City Administrator Eric Sterman said. The most recent one was granted to the then-Johnny Mac’s store several years ago to fund renovations to the building. The district was terminated this year when the property was sold to a Subaru dealership. Another CID is located at the Holiday Inn at the intersection of Lindbergh Boulevard and Watson Road.

Mayor Pat Fribis questioned if the school district, Lindbergh Schools, would be affected in any way from the creation of a CID, and Lashley said it would not.

Ward 2 Alderman Casey Wong asked what the benefits would be for the city if the CID was established to fund the parking garage and new Hilton hotel.

“The benefit for Sunset Hills is this: The (Interstate) 44 and Lindbergh corridor right now is quiet when you compare it to some of the other corridors in St. Louis. … You either have a dying exit or a growing exit,” said Sheevam. “From the hotel standpoint, and that’s the only standpoint I understand … right now 44 and Lindbergh would be considered a dying lodging exit. There’s nothing new, there’s nothing fresh. … This exit is due for a renovation.”

Ward 4 Alderman Thompson Price urged that a second reading of the bill take place that night and said he supports the project. But there was no motion made to suspend the rules for a final vote.

“I see this as something that we need to get done. We’ve been talking about this now for quite some time. These are great developments, that parking garage that that space needs badly,” said Price. “I think we would be losing out and doing an injustice to the residents of Sunset Hills and the surrounding areas if we don’t get this approved and move forward with it.”

Only one member of the public commented on the proposal during the public hearing, former Crestwood Alderman Gary Vincent, now a Sunset Hills resident who criticized the plan and said that the property does not appear blighted and therefore should not be eligible for the tax abatement.

“What I’m understanding here is taxes are freezed at the 2019 level — no new taxes will be paid on two new hotels and one new parking lot. … I was here in January at the meeting and I did not hear the word ‘blighted’ at all. None of the words like ‘age,’ ‘obsolescence’ or ‘deterioration’ were mentioned,” said Vincent. “What I heard and what I’ve heard today as well is that the taxes have increased considerably in the last few years and that the owners want to cap the taxes if they build a new hotel.”