St. Louis committee approves sales tax for McKee project | St. Louis Public Radio

St. Louis committee approves sales tax for McKee project

Oct 12, 2016

Developer Paul McKee is asking for $2.8 million in tax increment financing for a grocery store and gas station, as well as a one percent sales tax to help pay the TIF back.

The St. Louis Board of Aldermen’s Housing, Urban Development and Zoning committee approved both proposals on 4-3 votes on Wednesday.

Earlier this year McKee announced plans for a $20 million project that includes the Green Leaf Market and the ZOOM Store near the Stan Musial Veterans Memorial Bridge. This summer the board approved the release of $2.8 million in TIF for infrastructure around the project at 13th Street and Tucker Avenue.

The two bills approved Wednesday allow the release of a $2.8 million TIF note, as well as the creation of a Community Improvement District that will levy a one percent sales tax.

Several aldermen pointed out that other gas stations have located on the city’s north side without incentives. But the bill’s sponsor, Alderwoman Tamika Hubbard (5th Ward), said there’s no grocery store in the area.

“It’s a grocery store in an area that’s experienced 60 years of disinvestment,” Hubbard said. “We don’t have a grocery store. Me myself, I’m going to south St. Louis or going far west to buy fruits and vegetables.”

As for the one percent sales tax, McKee emphasized that those using Electronic Benefit Transfer, or EBT, pay no sales tax. He told St. Louis Public Radio he’s not expecting much sales tax revenue to come from Green Leaf Market.

“You know our community is majority low income and the majority of them are on the EBT card,” McKee said. “We get zero tax on any of that. So the reason we put the ZOOM Store in is that people going home to Illinois will pay tax.”

The one percent sales tax will go toward paying back $1 million of the $2.8 million TIF note, according to St. Louis Development Corporation executive director Otis Williams. He said that lessens the city’s risk.

“We chose not to go out on a limb and fund the remaining dollars,” Williams said.

In St. Louis, TIF notes are typically paid back with 50 percent of the additional sales taxes, earnings taxes and payroll taxes that come in after a project is developed. In this case, about $1.8 million of the TIF will be paid back through that method.

Several residents spoke before the committee asking aldermen to vote no. Old North resident Jessica Payne said the developer hasn’t been a good neighbor for the past decade and doesn’t deserve the incentives.

“I’m also concerned as a neighbor and resident of this ward and near this project that I have to pay additional taxes if I want to use this grocery store to someone who does not keep up his property at all,” Payne said.

McKee told St. Louis Public Radio he’s got two people working full time on maintaining Northside Regeneration properties and hasn’t faced a fine in years. Yet the developer spent much of his testimony before the committee on the defensive.

Alderwoman Cara Spencer said several residents in her 20th Ward have not been able to purchase side lots from the city’s Mow to Own program because they’ve had problems with upkeep.

“I want to make sure we’re holding our biggest developer to the same, if not a higher, standard,” Spencer said.

She was among three aldermen who voted against both bills, including Alderwoman Megan Green (15th Ward) and Alderman Antonio French (21st Ward.)

French, who has announced he’s running for mayor, was especially critical of giving more tax incentives to McKee.

“I think that state tax payers, city tax payers, this Board of Aldermen, this state government have provided extraordinary assistance to Mr. McKee and his project, the level of which no one has seen before,” French said. “… and I think people are frustrated that they haven’t seen anything built yet.”

Alderwoman Marlene Davis said the fact that this is the first project within McKee’s Northside Regeneration redevelopment was reason enough to get on with it.

"I hope we have the presence of mind and fortitude to get some business done and move forward,” she said.

Davis voted in favor of both bills, along with Aldermen Joe Roddy (17th), Alderwoman Lyda Krewson (28th), who has also announced she’s running for mayor, and Alderman Jack Coatar (7th).

The bills now go to the full Board of Aldermen.

Follow Maria on Twitter: @radioaltman