ST. LOUIS 鈥 The developer of the City Foundry complex in Midtown will contribute $1.8 million to the city鈥檚 Affordable Housing Trust Fund as part of a deal with Alderman Tina Pihl and Mayor Tishaura Jones鈥 administration for over $18 million in development incentives.
The announcement of what Pihl termed an 鈥渆quitable development fee鈥 follows more than a month of behind-the-scenes negotiations with the new administration and alderman over tax incentives for the central corridor project, spearheaded by developer Steve Smith.
鈥淲e want to thank Steve Smith for his flexibility, for the sense of social responsibility that flows through his work,鈥 Nahuel Fefer, Jones鈥 director of policy and development, said during a hearing on the project Wednesday.
Smith鈥檚 City Foundry project, underway for the last five years, envisions a complex anchored with a food hall, grocery store, movie theater, offices and apartments on the site of an abandoned factory along Highway 40 (Interstate 64).
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The first phase, delayed by the pandemic, is nearly complete, with some office tenants moving in and a new Fresh Thyme grocery store set to open this year. Smith is currently seeking city approval for incentives for the $160 million second phase.
Aldermen in 2018 approved for the Foundry up to $17.3 million in tax increment financing, which allows a developer to put new taxes generated by the project toward construction costs. Critics say the city鈥檚 frequent use of the mechanism diverts too much potential money from the school district and city. Proponents say it鈥檚 an essential piece of financing for projects that wouldn鈥檛 otherwise get built and produce that tax money.
Smith had returned to the city last year for approval of amended plans for the second phase, which swapped out a larger office building for a 282-unit apartment structure he said was less risky than offices in the wake of the pandemic. As he was working through city approvals, Jones won the mayoral election and Pihl won the seat vacated by longtime alderman Joe Roddy. Both promised a new approach to development incentives in the city.
Smith wasn鈥檛 asking for any additional TIF money. The deal with the new leaders, however, increased the TIF amount to $18 million. The new incentive package also includes an exemption of sales tax on construction materials. When Smith closes on construction financing for the next phase, the deal requires a lump sum payment to the city鈥檚 affordable housing fund to be used in north 最新杏吧原创 and in the Forest Park Southeast neighborhood that is part of Pihl鈥檚 ward.
鈥淲e do need to find a way for economic vibrancy in the central corridor to extend to areas where there has been underinvestment,鈥 Smith told the TIF commission Wednesday. 鈥淲e鈥檙e excited to be part of that and piloting what we think is hopefully something that will help prime some investment in other areas of the city.鈥
Two previous TIF commission hearings on the request were delayed following the April election. City officials and Pihl played down the negotiations, but the Post-Dispatch then reported that Pihl and the Jones administration were pushing the developer to contribute 10% of the TIF amount toward development in less affluent areas of the city.
Fefer, in his comments Wednesday, acknowledged that negotiations 鈥済ot off to a rocky start.鈥
鈥淏ut we鈥檙e trying something new here, and we are I think all pretty happy that we鈥檝e ended up with a project that can be a model for equitable development moving forward,鈥 he said.
There could be other ways future projects are asked to contribute, Fefer said. One was suggested Wednesday by Joyce Roberts, president of the 最新杏吧原创 Board of Education. She asked that the commission consider ways to get some new money to the school district faster, rather than waiting for new property taxes to pay off a TIF over as much as 23 years, the maximum time authorized in state law.
Perhaps other developers could pay an upfront fee to the school district or redirect some of the new property taxes to the district under a future agreement, Fefer said.
The TIF Commission voted 5-3 to recommend the Board of Aldermen approve the incentive package, with both school district members of the commission voting against the recommendation.
