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.”
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 .