South St. Louis County News

St. Louis Call Newspapers

South St. Louis County News

St. Louis Call Newspapers

South St. Louis County News

St. Louis Call Newspapers

Some on Sunset Hills TIF panel skeptical of Sansone proposal

Lanane questions need for requested tax assistance

A proposed development of office space and mixed retail use at the current site of the Holiday Inn-Viking Conference Center was met with skepticism last week by some members of the Sunset Hills TIF Commission.

Some commissioners questioned various aspects of the project, including the need for $12 million of public assistance through sales taxes and the perceived “hurry” to approve funding for it.

As proposed, the Sansone Group would redevelop the 8.18 acres on and around the Holiday Inn-Viking Conference Center — near the intersection of Watson Road and South Lindbergh Boulevard — into a combination of office and retail called Sunset Crossing. As proposed, Sunset Crossing would include a 90,000-square-foot, five-level office building; 360 parking spaces in a five-level parking structure and 180,450 square feet of five retail parcels.

The Sansone Group estimates that buildings would be completed by 2010.

The sticking point to be determined by the Sunset Hills TIF Commission and ultimately by the city’s Board of Aldermen concerns the Sansone Group’s request for $12 million of sales-tax assistance at the new retail parcels to help pay for the $47 million development. If bonds were issued for $12 million of tax assistance, developers estimate they would be retired by 2024.

The Sansone Group has requested the following taxing assistance:

• $5 million for construction costs associated with retail space and structured parking.

• $4.5 million for acquisition costs, which include termination of management and franchise contracts at the Holiday Inn-Viking Conference Center.

• $2.5 million for site preparation, which includes demolition of the existing hotel and conference center, site work, landscaping, grading, signage and utilities.

The Sunset Hills TIF Commission will meet again at 6:30 p.m. Monday, Nov. 12, at Sunset Hills City Hall, 3939 S. Lindbergh Blvd., to discuss the development proposal. A public hearing for Sunset Crossing also has been scheduled for 6:30 p.m. Dec. 4 at City Hall.

The Board of Aldermen then could vote on the proposed development as soon as Dec. 18 — two weeks after the public hearing.

In September, aldermen voted 6-1 in favor of a resolution approving a request for redevelopment proposals at the property. Ward 1 Alderman Frank Hardy was opposed and Ward 3 Alderman Jan Hoffmann was absent.

The push to decide on the redevelopment proposal comes partly as a result of an action this year by the state Legislature to establish new TIF commissions beginning in 2008 in St. Louis County, St. Charles County and Jefferson County.

That legislation approved the establishment of a new 12-member TIF commission for projects proposed in cities in each of those counties.

Six members of that commission would be appointed by the county executive, three members would be appointed from the city in question, two members would be appointed from the local school district and one member to represent all other tax districts.

If the countywide TIF commission rejects a project, it still can be carried by a two-thirds vote of the governing body of the city in which the project would be situated.

Because of the looming confusion over “what TIF commission should do what,” City Attorney Robert C. Jones said the Sansone Group wanted to have the proposal reviewed before the end of 2007.

Bond counsel Bob Balsrud of Gilmore & Bell, which is conducting an independent review of the TIF proposal in Sunset Hills, fears that the TIF legislation might stall many projects requesting tax assistance in the area for much of 2008.

“On a going-forward basis, whether it applies to this project or future TIFs in the St. Louis area, there will be a state of limbo where no TIFs will move forward until there is legislative direction,” Balsrud said. “And so if there is legislative direction in the next session with that law becoming effective in possibly August of 2008, we may be in a period where we’ve got eight months of nothing being done … Everybody’s in agreement that things will come to a screeching halt by Jan. 1.”

As a result of the requested short timeframe to consider the redevelopment project, TIF Commission Chairman Bill Holland was agitated that the TIF Commission did not have much time to review the proposal before the Oct. 17 meeting.

“I would hope that at any further proceedings that we’ve got going, and this goes to all parties, that responses are made in a much more prompt and timely fashion,” Holland said. “I don’t think it’s fair to any of the commission members right now or any of the parties involved that we sit here and we’re going over all this data and we’re trying to make a decision on the fly. That’s not good governance. And I personally would chastise everybody involved for doing it this way.”

Brian Pratt of Peckham, Guyton, Albers & Viets Inc., which was hired by aldermen to review the proposal, said because the project bears “extraordinary costs” like demolition of the existing hotel and conference center, a TIF is needed.

But TIF Commission member Pat Lanane, who serves as the Lindbergh School District’s chief financial officer, said he does not believe the proposal is fair, noting that other office buildings in Sunset Hills have been built without public assistance.

“On its face without that (TIF), it’s a bad business deal,” Lanane said.

“I certainly don’t think anybody’s going to acquire the property at the cost presented in this proposal for this development without public assistance,” Pratt said.

“Theoretically, you could say the public is now going to finance a bad business deal,” Lanane said.

“No, because there’s extraordinary costs of development in this,” Pratt said. “Let me ask you this. At what point does a property have to fall on such misuse and a decline in the tax base of the school district for you to burden taxpayers who live in this district with a tax increase?”

“I can tell you exactly when it is …,” Lanane said. “There have been six TIFs in the school district, and we’ve voted ‘yes’ on four of them. So, I could probably if you’d like to sit down, I could take you through those. In fact, I could take you across the street to one that’s actually been a rather good TIF development. So, yeah, I think I could answer that question for you if you really want to get into it.”

“My point would be that the school district had to make an additional investment and ask its tax increase because of the needs and demands of the school district at the time today versus the time whether it was five, 10 or 15 years ago,” Pratt said. “In that particular case, the market suggests that office development could occur without assistance whenever those office buildings were built. And at this point in this location, the market is not going to allow for a development to occur at this site without public assistance.”

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