Sunset Hills approves legislation allowing for tax abatements, aimed at hotel project

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A rendering of the Comfort Suites being built by Days Inn owner HR Sheevam.

By Erin Achenbach, Staff Reporter

The Sunset Hills Board of Aldermen passed a contentious bill at its March 10 meeting that, through state statute, will allow the city to declare properties “blighted” and grant tax abatements to redevelop them.

The bill passed 5-2, with Ward 2 Aldermen Steve Bersche and Casey Wong, Ward 3 Aldermen Kurt Krueger and Nathan Lipe and Ward 4 Alderman Thompson Price voting in favor of the bill, while Ward 1 Aldermen Ann McMunn and Dee Baebler were opposed. Board President Mark Colombo was absent.

The legislation would allow tax incentives such as the one from Missouri state law Section 353, which grants a similar subsidy to tax-increment financing but doesn’t require a TIF Commission.

While the ordinance applies citywide, it was first brought to the table at the February meeting by representatives of HR Sheevam, the developer currently building a Comfort Suites at the former Days Inn, 3660 S. Lindbergh Blvd.

Sheevam is seeking a “tax stabilization” or property tax freeze for the property, which he envisions developing into not only the 5-story Comfort Suites, but eventually also a 7-story Hilton hotel and 2-story parking garage to serve the hotels and Helen Fitzgerald’s next door.

Construction of the Comfort Suites is underway. But Sheevam’s representatives told the board in January that the proposed Hilton and parking garage could not be completed without the tax stabilization, which would also include the creation of a Community Improvement District, or CID — an extra sales tax for customers of the new development.

During public comments at the February meeting, residents expressed their concern with the possible tax subsidies, calling it a form of “corporate welfare.”

Sheevam is represented by Sandberg Phoenix real-estate attorney Andrew Ruben, who has also been conducting extensive work for the St. Louis County Port Authority in its reorganization. Ruben asked that aldermen, City Administrator Eric Sterman and City Attorney Robert E. Jones fast-track the plan for tax abatements at the February meeting.

“The primary thing is I don’t see why we need this. Mr. Ruben’s letter asking for a second reading tonight says that Mr. Sterman and Mr. Jones should move very quickly to remedy the situation of not having this ordinance, but why the rush?” said Ward 3 aldermanic candidate Cathy Friedmann. “Just because a business wants the ordinance… quick, why are we jumping through hoops?… I don’t understand what the rush is… This is a big deal. It smacks of corporate welfare.”

The bill was read for the first time at the February reading, but a motion by Price for a second reading failed 5-2 when McMunn and Baebler voted it down. Decisions to fast-track legislation have to be unanimous.

At the March meeting, McMunn motioned to make the legislation site-specific to the HR Sheevam development, but since there technically is no site at the moment with no formal plans submitted, her motion would not work and died from lack of a second.

“This is a very innocuous piece of legislation. It simply gives us the procedure and… it also sets forth a process here in Sunset Hills for who should review a particular proposal… I don’t think it’s necessary to make it site-specific,” said Jones.

Sterman told the board that cities such as Crestwood, Frontenac, Brentwood and Maryland Heights had similar ordinances.

“That’s not to say that all of these cities actually grant it any time there’s a 353 abatement, but they do have similar procedural ordinance in their code as is proposed,” said Sterman.

The bill passed 5-2. Despite earlier comments against the bill, there were no public comments against it in March.