State Auditor Tom Schweich is taking aim at a gated Downtown St. Louis parking lot that he says should be open to the public.
At issue is a parking lot at 1100 Washington Ave., in the heart of downtown’s bar and entertainment district. The lot is maintained by the Washington Avenue Transportation Development District (TDD), which relies on a 1-cent retail sales tax to maintain and cultivate transportation infrastructure around Washington Avenue.
In an audit released Wednesday, Schweich’s office said the original developer formed the TDD in 2009. Then, in 2010, the TDD leased the lot from the developer for $4,567 a month and issued a $1,141,000 taxable sales tax revenue note to the developer.
The audit goes on to say that the TDD then leased the parking lot back to the developer for $1 per year, which “gave the developer operational control of the lot.”
The problem, Schweich said, is the lot is gated off from the general public even though tax dollars are helping maintain it. That not only violates the law governing TDDs, he said, but it also brushes up against the fundamental reasons the transportation districts exist.
“The problem is the whole purpose of a transportation development district is they increase the sales tax in the area in order to allow public access to help fund what they’re doing,” Schweich said in an interview in St. Louis. “And the key thing is, if you’re going to use your public taxes, the public needs access to the project they’re paying taxes for. That’s a fundamental tenant of TDDs.
“What they did was they charged the tax and then made the parking lot private so that the public couldn’t get access to it,” he added. “Which means they’re using tax dollars to fund their private venture – which is not allowed under the TDD statute.”
Schweich said he’s never encountered a situation like this before during his roughly four-year tenure as auditor.
In an unsigned response to Schweich, the Washington Avenue TDD said it’s reviewing the audit’s findings. It also said the TDD’s membership completely changed in May 2014.
“The current Board members were all newly appointed in May 2014 and are still gathering information regarding the operations of the TDD,” the response stated. “We will review the audit report with our legal counsel to confirm agreement with the report's findings and to determine the appropriate actions to take in light of the auditor's concerns.”
The vast majority of the reconstituted TDD board, including Chairwoman Erin Johnston and executive director John Alvery, work at Kansas City-based Maxus Properties. Neither Johnston nor Alvery returned calls for comment.
The former TDD board’s chairman and executive director was Bill Bruce, who developed the building at 1110 Washington Ave. which is known as the Vanguard Lofts. According to the St. Louis Business Journal, Bruce died late last year. His son, Brian Bruce, was also on the old TDD board and did not return a call for comment.
Schweich suggested that it might be time to dissolve the Washington Avenue TDD – especially if they’re not going to open the parking lot to the general public.
“The problem is when you raise somebody’s taxes to fund something, the public has to have access to it,” he said. “The public that paid the tax needs access to it. This is the only TDD I’ve ever seen where they try to take your tax money and then keep you out.”