UPDATED: Despite court ruling, TIF panel to continue work in Crestwood

Chapter 353 tax abatement a possibility for mall proposal

Kris Simpson

Kris Simpson

By Mike Anthony

The Crestwood Tax-Increment Financing Commission is continuing with its deliberations of a developer’s proposal to redevelop the former Crestwood Plaza despite a recent court ruling that could impact the legality of the city approving such a project.

Nearly 40 speakers addressed the Tax-Increment Financing, or TIF, Commission Wednesday night during a public hearing at the Community Center. The TIF Commission will meet at 7 p.m. Wednesday, Feb. 10, at the Government Center, 1 Detjen Drive.

UrbanStreet Group of Chicago is requesting about $25 million in economic assistance for a $104.3 million mixed-use project, including $15 million in TIF; $5 million in Community Improvement District, or CID, funds; and $5 million in Transportation Development District, or TDD, funds.

The Boone County Circuit Court last month ruled that the city of Columbia cannot create any new TIF projects until 2020 because it failed to satisfy the reporting, publication and hearing requirements of the state’s TIF statute.

The city is appealing the ruling.

Crestwood has filed all required reports, according to the city’s special and bond counsel, Gilmore & Bell. “However, to our knowledge, the city of Crestwood did not publish annual statements in the newspaper regarding the amount of PILOTS (payment in lieu of taxes) and the status of redevelopment plans,” as required, Gilmore & Bell wrote in a memo to city officials.

As such, any TIF approved by Crestwood could be invalidated by a court, the memo stated. As an alternative, Gilmore & Bell proposed a Chapter 353 tax abatement.

“The proposed Chapter 353 real property tax abatement, community improvement district special assessment and contractual pledge of certain sales-tax revenues structure allows for the city to provide a level of incentives equal to the amount that could be provided through TIF — i.e., approximately $15 million, excluding the value of the CID and TDD sales tax revenues — while avoiding the risk and uncertainty resulting from the Boone County Court’s opinion. From a financial perspective, the impact of this incentive structure on the affected taxing districts is similar to the effect that TIF would have on those taxing districts,” the memo stated.

Aldermen last week adopted an ordinance approving two amendments to the city code. The first amendment enables the city to proceed in a more timely fashion when considering requests for Chapter 353 tax abatement. The second amendment brings the code into agreement with Chapter 353 of state law that requires that these provisions be set by local ordinance.

Resident Martha Duchild noted that UrbanStreet’s blighting analysis for the mall site is being done under the state’s TIF statutes in Chapter 99, and asked, “… Since the requirements of blight under Chapter 353 are different and the plan is currently being reviewed by the TIF Commission and the city’s planner, PGAV, completed a blighting analysis that is based on the requirements of Chapter 99, what would happen, let’s say, midstream, if the developer decided to elect to go with a 353, how would that impact the TIF Commission’s deliberations? …”

“It will have no impact on the TIF Commission’s deliberations,” City Administrator Kris Simpson replied. “The proposal that’s before the TIF Commission is complete and, as you know, they’re reviewing it to make sure that it makes the requirements set forth by the TIF statutes. Chapter 353 is an alternative track just in case the developer or the board decides to pursue that option. It’s simply an alternative.”

If the board or the developer elected to pursue a Chapter 353 tax abatement, the plan would not return to the TIF Commission, he said, later adding, “… The sole authority for determining blight and whether or not 353 is applicable is up to the board.”