St. Louis City
5:00 pm
Wed May 7, 2014

Alderman Wants To Examine St. Louis' Tax Incentives

The city of St. Louis often uses tax incentives as a means of spurring development. But one alderman wants to change how the tax breaks are given out and assessed.  

Alderman Joe Roddy is forming a group to look at how the city's tax incentives are divvied out. Roddy recently took control of the Board of Aldermen's Housing, Urban Development and Zoning Committee.
Alderman Joe Roddy is forming a group to look at how the city's tax incentives are divvied out. Roddy recently took control of the Board of Aldermen's Housing, Urban Development and Zoning Committee.
Credit Jason Rosenbaum, St. Louis Public Radio

Alderman Joe Roddy, D-17th Ward, told members of the Board of Aldermen’s Housing, Urban Development and Zoning Committee on Wednesday that he was forming a group to examine how tax increment financing and tax abatement is done in the city of St. Louis.

Those incentives are commonly used in the city’s big-ticket development projects. In fact, St. Louis Development Corporation President Otis Williams told the committee that roughly 140 TIFs had been approved since 1993 – including ones for CORTEX and Grand Center.

In an interview after Wednesday’s HUDZ committee hearing, Roddy said the city has sent “mixed signals” about what it wants to incentivize. He wants to make sure there’s “a clear vision about what we want to use our incentives for and what our overall plans for the city are.”

“I would like to think it’s part of an overall strategy and I’d like to think that we’d begin taking a consistent approach to doing development and the incentives that we’re offering,” Roddy said.

In particular, Roddy wants to hire city staffers to do cost-benefit analysis of incentives. That, he said, could help aldermen understand a specific proposal before they cast a vote for or against it.

“As we begin making those decisions, they need to be quantified and in my opinion better understood,” Roddy said. “I think there’s some analysis being done right now, but it’s out of house. I’d like to have something that we own. And it’s our analysis. And if we want to go ahead and change the assumptions on it or so forth that it’s something that we can do.”

Roddy said the he wants to bring officials from the city comptroller’s office, the St. Louis Public School District and the St. Louis Development Corporation into the working group. He adds he expects to come up with some sort plan in the next few months.

Williams said that he would welcome an examination of the city’s tax incentives. But he adds that the inducements in question have served their purpose. 

St. Louis Development Corporation President Otis Williams speaks before the HUDZ Committee on Wednesday. Williams said he welcomes the study, but added that tax incentives have served their purpose.
St. Louis Development Corporation President Otis Williams speaks before the HUDZ Committee on Wednesday. Williams said he welcomes the study, but added that tax incentives have served their purpose.
Credit Jason Rosenbaum, St. Louis Public Radio

He went onto say that the city is “trying to make an environment where we are sought after as opposed to us seeking people out.”

“We provide incentives in a but/for atmosphere,” Williams said. “Generally the development will not be done unless we provide an incentive so we don’t go out marketing to give an incentive. We react to a request to get a deal done.”

Roddy’s call to look into tax incentives prompted members of his committee to take a frank assessment of how the city pursues development opportunities. That included where mass transit systems like MetroLink are located and how development is concentrated in a particular part of the city.

Alderman Antonio French, D-21st Ward, said that often times incentives are marketed at having no cost to the city – even though it results in lower tax revenue. He also contended that the city’s development efforts have focused on developing the Central Corridor.

“What’s happened is that while we built up the Central Corridor and increased the population in the Central Corridor, we continue to bleed people from neighborhoods north and south,” French said. “And so another way to phrase what the chairman is talking about is we really need to focus on increasing demand not just for our amenities in the city – which we have quite a few. But also our neighborhoods and places to live.”

Echoing French’s point was Alderwoman Sharon Tyus, a 1st Ward Democrat who has been critical of how city has used TIFs in the past.

“If it’s going to be from a perspective that the Central Corridor and Downtown are strong and that’s what we have to work at, that’s not a good perspective for me,” Tyus said. “We still have a lot of strong neighborhoods in north St. Louis.”