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Votes on Fate of Ellisville's Walmart on For Wednesday

Ellisville Mayor Matt Pirrello said he couldn't predict the outcome of a vote scheduled for Wednesday aimed at giving Walmart developers what they've called a vital tax incentive.

Despite confidence in its approval earlier this month, Ellisville Mayor Matt Pirrello said he couldn't predict whether a proposal up for vote Wednesday aimed at giving developers of a Walmart they've called a "vital" tax incentive will ultimately get approved.

would allow the Sansone Group, a development agency who would facilitate the proposed Walmart near , to access half of all new sales tax revenues generated at the site, with the stipulation that the revenues be applied to infrastructure improvements for the surrounding area.

Mayor Matt Pirrello said earlier this month that the Ellisville City Council had enough members supporting the TIF or Tax Increment Financing proposal for it to get approved; because a majority of local TIF commission members did not support the proposal in their vote, the Ellisville City Council will need 5 of its 7 members to support the ordinance.

On Tuesday, however, Pirrello said he couldn’t predict the chances of getting approval for the project, which was forecast to annually generate roughly $500,000 in city sales tax revenue.

“At this point, I have no idea,” Pirrello said. “It’s the flip of a coin.”

Principal developer Jim Sansone said the project will not move forward unless the TIF is granted. Pirrello said the city will seek out another developer for the same area if plans fall through, but said because the city’s last formal request for developments produced only one interested party, he wouldn't expect another project proposal to result.

“And if that were the case, then I would say that the city’s economic future and well-being would be at stake.

The city solicited proposals from developers in July 2010 for the space, which sets off the beginning of "Redevelopment Project Area 1" under the city's plan to . In the city's request for redevelopment document or RFP, the area is referred to as a "post World-War II retail corridor."

(Editor's Note: The complete RFP, which was prepared by PGAV Urban Consulting, is available by "Pdfs" above.)

A related proposal that hinges on the passage of the TIF ordinance is legislation that would allot households within Clarkchester Apartments, one of roughly four establishments located in the parcel the Walmart would be built on, up to $1,000 each for relocation costs. Pirrello said the proposed relocation policy will not go into effect unless the TIF proposal, too, is approved.

Pirrello said he has been contacted many times by residents of Clarkchester Apartments regarding the proposal, but said the apartment building’s fate is the result of a pre-existing agreement made by the complex’s owners.

“But unfortunately that has nothing to do with the city and really nothing to do with Walmart,” Pirrello said. “That has everything to do with the building owners. And the building owners have entered into an agreement to sell their property, whether it be to Walmart or to anybody else.”

Ellisville city staff previously indicated that under Missouri state law the property containing Clarkchester Apartments could be seized through eminent domain.

Concerns on Behalf of the City

Pirrello said he wanted residents to understand that the funds captured by the proposed TIF would not go directly to Walmart or its owners.

“Walmart is not receiving the subsidy,” Pirrello said. “The developer who’s building this development is getting these funds to pay back a loan … They’re not just getting this money to put in their pockets.”

Pirrello also objected to comparisons between the Ellisville proposal and plans for a , which are moving forward despite that city council’s 2010 decision to oppose a requested TIF.

That project, he said, included acquisition costs and infrastructure changes for utilities that cost about one-fourth as much to develop.

“Everything associated with this (Ellisville project) is an exorbitant cost compared to what they’re proposing at the Florissant location,” Pirrello said.

Pirrello added that the potential Walmart Superstore would not be allowed to sit vacant if the store closes, as was the case with the Walmart located on Manchester Road in Town & Country, which .

“We’re going to assure that that doesn’t happen.”

Critics Voice Concern for Greater Area

Ellisville TIF Commission member Michael W. Jones, an adviser to St. Louis County Executive Charlie Dooley, said at a March 5 meeting regarding the TIF that he opposed the project because the county would not see any new revenues from it due to stagnate population growth.

“Therefore any new projects built anywhere in St. Louis County that use TIF dollars are not creating new taxes,” Jones said. “We’re just moving sales and activities from one part of the county to another.”

At that same meeting, David Stokes of the Show-Me Institute, a non-profit public policy group, voiced opposition to the Ellisville project stating that the requirements for a TIF are too vague and include front-end costs paid for by the city.

“The standards for conservation areas are so broad that almost any area of Missouri could fit,” Stokes said, adding that the institute has yet to identify one proposed TIF that didn’t qualify based on legal parameters, which require at least 3 of 14 criteria to be met in order to be considered.

“We couldn’t find one project that failed,” Stokes said. “Not one.”

“Taxpayer dollars fund the lawyers and planners who run the project, and everyone involved in the process makes money as the project goes forward," Stokes said.

If the development is approved, Pirrello said construction likely would begin this year.

The Ellisville City Council is scheduled to vote on the TIF proposal and relocation policy at its council meeting starting at 7 p.m. Wednesday at .

George Sackett March 21, 2012 at 11:47 AM
I do not believe that there is an obvious best answer to this issue. There are pros and cons with either choice. Whether it votes in favor of the TIF or against it, I know that the council is working very hard to make right decision for the city. I appreciate their commitment to doing the right thing for the city and it's residents
Michael Rhodes March 21, 2012 at 01:22 PM
Great comment George. I think people tend to see those on the other side of an issue as the enemy and that is usually not the case. Not an easy decision to make no matter how you slice it. If the TIF is denied and the developer comes back with a scaled down plan it will still face the same opposition. Either way it is going to effect Ellsville and it's residents. Either it passes and Walmart becomes a logn time member of the community provided much need revenue and developement in an area that desperatly needs it or it is rejected and those lots sit empty for an unknown amount of time providing little to no revenue for the city. Adam Paul has stated many times that the Walmart business plan is to move in 7 to 10 years and that could leave another hole (I do not know where Adam is getting that business plan from as I would expect Sansone is going to lock Walmart into a fairly long lease otherwise why spend the money developing the area for them. Wouldn't be good business practice for Sansone). It is a gamble no matter what is decided.
James Cleeve March 21, 2012 at 01:53 PM
I agree that the council is most likely working hard on this and I hope they make a well informed decision... what I cannot understand is why we (taxpayers) are always forced to carry the burden of giving developers and corporations money for things they should do and carry the burden of. If you can't make enough money, as a company, to build a building and run a business, then you should not and you shouldn't be in business. Why is basic free enterprise so hard for companies to understand today?!?!?! I don't shop at the businesses in Manchester where they used TIF money. Why would I go there and pay a higher tax rate when I can shop at my local Ellisville Best Buy without the increase? I find other Walmarts to shop at as well. IF this Walmart is built in Ellisville with TIF money, I will NOT shop there either. Enough is enough! We have to stop all these taxes.... I hope many others are with me!
Michael Rhodes March 21, 2012 at 03:20 PM
James I agree with you; sort of. If this was a request to have peal estate taxes increased or personal property taxes increased to lure business I would be against it. Since this will end up being paid for by those who shop there I am okay with it. Now, the real estate ax break they are getting is a little different. Since Ellisville will still get the same tax amount it is getting now then freezing their rate for the next 14 to 20 years doesn't bother me as much. Although I would like to see that portion removed from the deal (3 million I think is the number). If Ellisville (and St. Louis County, Rockwood Schools, and other taxing parties) doesn't start generating more tax revenue the all the residents are going to end up paying for it through higher taxes, fees, and less city/county/school paid services (trach pick up, etc...).
Michael Rhodes March 21, 2012 at 03:21 PM
Real estate "ax" break, real estate "tax" break. Patch I could use an edit button for my posts :)
James Cleeve March 21, 2012 at 03:57 PM
Michael, I appreciate your perspective on it all... I just feel that a tax is a tax, not matter who is paying for it. Whether it is property taxes or sales taxes... a taxpayer is paying the developer, in this case, to develop property that they should be able to make money doing without our help.
George Sackett March 21, 2012 at 06:30 PM
The area is already zoned for redevelopment and any company can come in a develop as long as they meet current building code. One of the factors in considering a TIF is that the city can negotiate for development that better meets the needs of the city and the residents, above and beyond what is required by code. We will know more this evening how this is going to work out.
Michael Rhodes March 21, 2012 at 06:45 PM
James, I can see your point as well and you are correct it is still a tax. I guess I think of it as a tax I can choose to pay or not by shopping there or not. Wish I could say the same about my real estate tax!

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