Pavlack Calls Ellisville’s TIF Commission on Walmart a ‘Sham’

The former councilmember suggested Monday night’s meeting was pointless prior to the commission’s vote against a recommendation to create a special tax district meant to lure a Walmart Supercenter.

Despite the decision’s relatively small impact on whether a Walmart Supercenter will be built in Ellisville, a crowd of more than 100 people at the city’s late Monday erupted into applause following a commission’s decision to vote against the creation of a TIF district.

The commission’s 7 to 4 vote against recommending the creation of a Tax Increment Financing district, which would allow Walmart’s developers to retain half of the newly-created sales tax dollars generated on the site, means the final decision by Ellisville’s 7-member council will require 5 votes for approval rather than a simple majority. That decision could be called for a vote within two weeks of Monday's meeting.

Jim Sansone, principal developer with the Sansone Group, said the development cannot take place without the creation of a TIF.

“So it's vitally important that this recommendation happen,” Sansone said prior to Monday’s vote.

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Former Ellisville councilmember and commission member Charles Pavlack told the public that the commission to review the special tax district was a “sham,” expressing disbelief that the commission’s majority of members, who represented the interests of St. Louis County, would vote against the proposal.

Fellow commission member Michael W. Jones was among the majority opposing the TIF, arguing that because the county’s population has been flat for the last 20 years, no truly “new” revenue will be created by the store.

“Therefore any new projects built anywhere in St. Louis County that uses TIF dollars are not creating new taxes,” said Jones, who serves as an adviser to St. Louis County Executive Charlie Dooley. “We’re just moving sales and activities from one part of the county to another.”

“So what you’re saying effectively is this entire exercise has been a sham,” Pavlack told Jones prior to the vote. “There will never be a positive recommendation if the county doesn’t support TIF at all.”

If the TIF eventually is approved, half of all sales tax dollars created by the proposed site exceeding current sales tax revenues generated there, as well as 100 percent of increases in real property values, will be allotted into a fund under the developer’s control earmarked for infrastructure improvements to the surrounding area. The TIF would expire after a default length of 23 years, although that timeframe could change.

Despite its ability to capture revenues from real estate values as well as sales tax dollars, special counsel to the City of Ellisville Mark Grimm said the issue’s real fiscal impact revolves around sales.

“The impact on the property tax jurisdictions is pretty small,” Grimm said. “It’s not like you’ve got a green-field site with nothing on it. You have existing developments on this property … So the new dollars are all coming from sales tax.”

The targeted redevelopment space falls under the surrounding Manchester and Clarkson roads, which includes a total of 32 parcels of various sizes. The area presently includes Westgate Animal Hospital, Valvoline and LC Auto Service, as well as Clarkchester Apartments, an adjacent 100-unit complex.

The TIF stands to impact more than a dozen local tax bodies, including the Metropolitan Sewer District, St. Louis County libraries, the Metro West Fire District and Rockwood schools.

Nearly 20 residents spoke out against the TIF district, with comments ranging from concerns about “corporate charity” and the business ethics of Wal-Mart to the relocation of residents in the Clarkchester Apartment complex.

Ellisville resident John Whittier questioned why the development was necessary following last year’s , which was in 2010 as a potential alternative to bringing in a “big box” store to generate sales revenues.

“But now we’re being told that we need to bring another large business into Ellisville because we need the tax money,” Whittier said. “Something about the story we’re being told just doesn’t fit.”

The Ellisville City Council may vote on the proposed TIF district as early as the city’s March 21 meeting at .

Michael Rhodes March 07, 2012 at 02:17 PM
One more point. When McDonalds relocated across the street the City of Ellisville seized the private street that was located there to allow the McDonalds to be built. No one came forward to claim ownership so it wasn't as big of a deal. In the end they still used eminent domain on that small project. Not sure if any further concessions where granted as well. I also don't like the use ED for commercial projects (not a big fan when it is taken for city/state use either).
ALBERT N.EARLS March 07, 2012 at 10:36 PM
ALBERT N.EARLS March 07, 2012 at 10:47 PM
Alexandra April 20, 2012 at 06:48 AM
50% of the sales tax revenue gets cut off the top and goes straight to the developer.
Charles Pavlack April 20, 2012 at 12:29 PM
Technically, 50% of the NEW sales tax revenue comes off the top and goes to the developer to repay bonds which they issue to cover the cost of infrastructure improvements related to the site. This is not done forever, only until the bonds are paid off. Under the TIF agreement, this could take up to 23 years, but normally it's done in much less than that. None of the taxing districts will receive less than they're receiving now, and there are provisions in this agreement to pass on some of Ellisville's revenue from the TIF to other taxing districts as well.


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