Crestwood Courts, or what to do with an aged center and a Chicago developer?
http://www.labelscar.com/missouri/crestwood-plaza
The above is from a retail site on the web called labelscar.com and portrait at Crestwood Courts as "another bites the dust."
I remember the day's when you could hardly get out on Watson Rd, from Thanksgiving till January 2rd. due to the traffic coming and going from that mall. Remember the slogan, "Crestwood Plaza, where the big stores are,? I do.
And then the demographics started to change, we started seeing the decline of indoor malls, and we (in our collective infinite wisdom) decided that we needed all the department stores we could stuff into a small town.
Well, we got them (and somebody got a
pool to boot,) and now we have a dead duck on our hands and a developer who bought it at a fire sale not realizing that a land locked spot like that has it's limitations.
Our developer buddy is now in the throws of waiting for the other shoe to drop (second bubble from commercial property,) as well as the wonderful economic times created by the regime in Washington.
Interestingly enough he dosen't have the money to do much of anything, he has no committed tenant's, no real plan to do anything that makes sense, yet he wants us to pony up a TIF or two for at least 24 Million to cover his purchase and set up the middle of the night bug out (he will flip the property,)
I have asked my Ward Two Candidates to send me a mini "position paper" reference a TIF, TDD, CID for any project (but especially the Court's) and I will publish it here once I receive them.
This well may be the make or break project for Crestwood in my lifetime and I really don't want to see this decided on emotions or by people who have no negotiating skills, so be very careful who you vote for this April.
Now, as usual what's your line of thinking on this subject? We did a bang up job below, and like anything else there is much more to say. What say you ask your fellow Crestwoodians and family how they feel about government subsidies and the need for Crestwood to offer anything to ANY developer for ANY project?
Tom Ford
NO. 1094
posted by Crestwood Independent at 06:10
17 Comments:
Crestwood is Broke, like Humpty Dumpty.
Krestwood Karma ...strikes again.
http://revenue.stlouisco.com/pdfs/2005/STLCO%20TOP100%20SCHDIST%20138%202005.pdf
As recently as 2005, Crestwood Mall was the #1 tax producing property in the Lindbergh school district, and was assessed at $28,765,700 (33% of value). Now, the appraised value is only $11M (with almost $10M being the value of the underlying land), and the assessed value is only $3.6M. It will probably lose a little more value in the reassessment this year.
There are residential properties in Lindbergh where the value of the improvements are assessed higher than the mall buildings.
From the mouth of John Brancaglione at PGAV, who concluded that no one would develop the mall site without TIF (thus-passing the but-for test):
"If you achieve one thing that is worth something, then it
becomes a buildable site. If development rights are awarded, a TIF plan is put into place and a
redevelopment agreement is approved, if the only thing that gets accomplished is clearing the site, he
stated that he would call that a win."
With vacant sites still available in Chesterfield, and with the Page Extension going all the way to Highway 64 now, with plenty of undeveloped land along it still, what developer would want to take on a project without tax assistance that involves sinking 20 million into demolition, environmental remediation, and site work, before you spend your first dollar on putting buildings in? Cue crickets.
From Pat Lanane, Lindbergh's assistant superintendent for finance (when discussing a past TIF proposal):
"[T]he district and the board of education is "very pro-development" and thinks development is one of the "best things that could happen for the district from a revenue standpoint and a tax-base standpoint."
"We are okay with TIF when it is warranted, and it has to be proven to us that without a TIF, the current property would continue to go downhill, and that without a TIF, there is probably no way the area would be redeveloped."
Lanane said that over the past years the district has voted in favor of four of six TIF proposals that have affected the district, "so we can be convinced when we think it's really warranted."
Can you point to a professional that will say that the old mall can be redeveloped without TIF? I haven't heard one.
7:53 AM Blogger: If, as I have you were watching the commercial real estate "bubble" form you would know that there is no way that MORE commercial properties are needed, or will fill up lease wise.
Any developer knows this and they WILL attempt to hold up a community with phrases like "this is your only chance,," or "we can't do it alone!~"
Horse feathers my friend, they CAN do it alone, and if forced by the market, they will.
As far as a "professional" is concerned, well they are the ones who got us into this mess in the first place, so why should I or anyone seek their council?
Remember the last "planning" company that changed their minds in two years and then said that the "public" was a nuisance at the meetings, so don't invite them? I do!
We need common sense people representing us,m not emotional, world class weather veins and those who don't do their homework on that Dias, so remember that this April!
Tom Ford
I found this piece written by one of the City Council members in Ellisville interesting. Really shows the tension between local and regional interests.
http://ellisvilletruth.wordpress.com/how-ellisville-reached-its-decision-to-use-tif/
"
Horse feathers my friend, they CAN do it alone, and if forced by the market, they will.".
I think they certainly can do it alone. I just think they won't. Can and will are two different things.
The only "but-for" test this passes is the "but for the existence of the loopholes in TIF law, no developer would be allowed to use it in commercially viable cities."
Remember, Mr. Brancaglione is the consultant who, through highly questionable standards, determined blight conditions in the middle of downtown Clayton.
If the argument holds true that redevelopment cannot occur without the use of TIF or other tax tools, then there will be no further redevelopment in the state of California (where TIF agencies have recently been abolished).
Martha Duchild
Mr. Brancaglione can probably be forgiven for thinking at the time the courts would go along with blighting a section of Clayton, since the Missouri Supreme Court had just allowed the blighting of a section of Des Peres a few years earlier. I'm glad that the courts finally stopped the absurdity, but the question is now where do you draw the line? Should only the City of St. Louis qualify for TIF? Slum munis like Wellston and Jennings?
We certainly aren't poor and full of slums, but Crestwood isn't a wealthy suburb like Des Peres or Clayton. With the aging population and housing stock of Crestwood, and a ring of large retail developments surrounding it in Fenton, Maplewood, unincorporated St. Louis County, Kirkwood, Des Peres, and Sunset Hills, would you invest 100 million+ in Crestwood if you were a developer? Probably not.
Would market forces have eventually killed Crestwood mall? Maybe, but the granting of TIFs to finance new developments by almost all of Crestwood's neighbors certainly hastened its demise. To me, turnabout seems like fair play.
1:03 PM Blogger: Well if they don't then we start the war a bit early, no?
The property cannot be dug up and moved to wherever, they know that, and better yet WE know that!
They WILL do something with it as they are sick of paying the interest (doubt the principle has moved all that much) on that loan for the property, give it time and don't be in such a rush to give up (unless your French of course.)
Tom Ford
3:11 PM Blogger: I have read, and re read your post and for the life of me I cannot understand WHY you seem to be so fond of the TIF program, and in this case Centrum Properties.
If you, like Martha Duchild would do your homework you would find the fact that Centrum is over extended to the point of selling off projects in Illinois and Florida.
Knowing that what would make you believe that they will fulfill their contracts here? Have you now or will you be in contact with them to ask for yourself where this is going?
They (Centrum) have tabled this until the new Board takes effect in April, interesting, no? Do they believe that the new crop will be much more likely to give in, and if so why would they feel that way?
I have been here 44 years and never have I seen such a rush by certain individuals to give something on the come!
If you believe that betting on an inside straight is a profitable endeavor, I will gladly drive to to any gambling establishment around here and watch the inevitable!
"Should only the City of St. Louis qualify for TIF? Slum munis like Wellston and Jennings?"
If they burn down their communities should we do the same?
Please!
Tom Ford
To the Crestwood Independent:
Dear Mr. Ford: In response to your request for a short “position paper” on the use of TIF, TDD, CID monies for Centrum Properties I am submitting the following, which is in line with what I have on my website as well as campaign material I have been handing out:
Regarding TIF and other financial tools for the closed mall; I’m not against taxing tools, providing a strong business case supports it and there is no other way to get the project done. So far Centrum has provided scant details on what it plans to do with the property. The one name given has since withdrawn from the project from my understanding. I have read that they completed a demographic study that shows this area (what is “this area”?) would support their vision. I’d like to see that study and have gone on record in a Letter to the Editor of the Sun-Crest Call stating as much.
I was at the June meeting last year for their presentation. The idea sounded good, and the drawings were nice. But outside of that I have not seen any detailed plan. I don’t know how the City can make a decision on TIF without knowing the financial details of Centrum plan. We need to see the dollar amounts for what is needed and then the City can do its financial due diligence, a financial case study, to decide on whether it’s a good investment of taxpayer money. Then, let’s start the negotiations.
If Centrum and Angelo, Gordon & Co. want to truly partner with us, then open the books and pull back the curtain. Given the lack of detail and the current economic environment, I feel like we’re gambling and trying to out bluff each other. It’s an environment of win-lose instead of win-win. But, we need to move forward. I understand those who say you can’t get anything done without offering TIF etc. or they’ll go elsewhere. That is a truism because we've seen it all around us. Those cities that have said no can afford to. The market (and economy) made it this way similar to the problem car makers got into in the 80’s when they offered rebates and then found out they couldn't wean the consumer off of them.
How and why I came to this decision is simple and I've felt this way since last June. A supposedly well funded company comes in with a partner that has $13 billion in investment assets (I don’t know the mix of those assets, but it’s safe to assume it’s not all cash). How do you then immediately ask for money to fund your project for your property? I am also bothered by the repetition of ‘we need it because of the topography’. Should I have to fund taking care of that?
This may sound off topic and I certainly don’t mean to address any war issue with what follows. I recently read a quote by Dwight D. Eisenhower in 1953 in which he said, “The cost of one modern heavy bomber is this: a modern brick school in more than thirty cities. It is two electric plants, each serving a town of 60,000 population…We pay for a single destroyer with new homes that could have housed more than 8,000 people”. The point is that if you spend on one thing “…with the sweat of its laborer…” there is an opportunity cost for doing something else with that money.
Bill Schelinski
Candidate for Alderman
Ward Two
11:59 AM (2/25) Blogger: Just read the fiasco in Ellisville in the Post, perhaps we should look elsewhere for advise?
Tom Ford
Crestwood is a town of less than 12,000 people and about four square miles in size.It's tax revenue continues to decline whilst it's bills continue to increase.Businesses come and go ..they usually go.
Centrum will concentrate on other more profitable projects whilst the Mall falls into dust..the bottom line is can Centrum get a good return on the investment ?. If not then sell...I believe they will sell to some other consortium and take the business write off as a loss. Play David and Golioth or Texas holdem if you must. But like the bottom line is Crestwood is on the slippery slope down the food chain of blight and decay.
After reading about the nastiness in Ellisville, and the mess in Kinloch (selling their city hall to a suspected drug dealer), it makes Crestwood's problems look a little more manageable.
10:22 AM Blogger: Crestwood is three square miles,and has about11,22+ at last count.
Now in order, "businesses usually go." Now there is a comment that will make Goldman Sachs want to sink money into Crestwood Retail Do you EVER shop Crestwood yourself, do your neighbors?
Centrum will concentrate: Yes they will, they will concentrate on getting this off their plate before another LLC or six bite the dust. You see in this day and age of "the commercial bubble" banks are not willing to extend funds to over extended companies, ergo Centrum must lighten the debt load first.
Why not play it safe and sit on our collective hands until they feel the heat (they have said nothing yet, and yet your in a snit to give them whatever?) And then we will talk.
My friend were not rich, that's true, but were a long way from the "poor house" and unlike Centrum we can (and must) just wait.
Remember that guy who played first base for the Card's, you know the one who, if he left it would be all over? Well he left, were up 30 Million, and he coulden't hit his tail with a base fiddle out there, so........
Oh, and don't worry about the "blight," that was done before, in fact a pool appraised at 84 Thousand was blighted and morphed into a part of an 850 Million dollar deal on the edge of the City Hall parking lot, so it's been done, and I doubt they will try it again!
Tom Ford
Dear Mr. Ford,
Thank you for the opportunity to discuss the use of TIF, TDD, CID monies for Centrum Properties. As you know, this is a critical issue facing Crestwood and I’m sure it will rightfully garner much discussion in the coming months.
I’ve done quite a bit of research on these tools in the last few years while running for office in the 2012 election.
I don’t currently see any plans discussed where a Common Interest Development (or CID) would be appropriate. I know that there was original some discussion around turning part of the redevelopment into a condominiums or apartments. I am not a fan of that type of development for the Crestwood Court area. That type of consolidated housing would be problematic for our school district and I don’t believe would benefit our community economically.
Likewise for a Transportation Development District (or TDD) where the state of Missouri allows for an imposed sales tax in increments of 1/8% up to 1%. However, this was designed to facilitate specific public transportation improvements and I don’t see where that would apply in the case of Crestwood Court.
I find TIF to be a proven method to use future gains to subsidize improvements, and we’ve seen Crestwood use this tool successfully with several projects over the last few years, Kohl’s being the most visible/successful to my mind. So I do believe there is a place for this kind of a tool.
I had the opportunity to work closely with the Lindbergh School District when they were working to pass Prop L, as both the Crestwood Elementary PTO President, and simply as a volunteer for that effort. I had several opportunities to talk with Pat Lanane, Lindbergh’s Asst Superintendent for Finance at the time. Pat is a shrewd financial analyst, and successfully led the effort to pass Prop L and enhance our schools during a dismal economy. I had my first exposure to in-depth conversations about TIF efforts at that time and find myself to remain in agreement with him that using a TIF can be a very positive thing within certain parameters. I believe that for Crestwood those parameters must be:
• TIF is only appropriate if the city has been given a full disclosure of the business plans of the group asking for the TIF, in this case Centrum Properties.
• If Centrum could prove to the board that there is no way that the property could be developed without the TIF.
• The board is convinced that the redevelopment plans agreed upon are projected to increase the value of the property and surrounding real estate to the degree necessary to support the project. Both of which will generate additional tax revenue and in turn increase the property values for our citizens, a win-win, and of course the necessary ‘Tax Increment’ part of Tax Increment Funding (TIF).
In a nutshell, I’m not against using a TIF in principal if it will get the mall redeveloped and providing revenue once again for our community. However, I am not a fan of the TIF currently proposed based on the information that has been shared thus far.
Thank you,
Mary Stadter
Candidate for Crestwood Alderman
Ward 2
www.stadterforalderman.org
Well there you have the two fine candidates for Ward Two Alderman telling you how they feel about a Tax subsidy for development in Crestwood. Why not ask your Ward candidates what the think about it, and send them to me for publication?
Tom Ford
Mary Stadter
Missed you at the Gravois Republican Township meet the candidates event held on 2/27/13? It was for Ward Two and Three candidates and you showed up.
Since you didn't attend last year, what's your excuse for not attending this year?
Post a Comment
<< Home