$353M in tax breaks advance for ‘downtown’ Chesterfield projects

CHESTERFIELD — A plan to create a “downtown” Chesterfield cleared its first major hurdle Monday when a select committee recommended it receive $353 million in tax incentives.

In a 9-3 vote, the committee recommended that the city council provide tax incentives for two projects that are set to build thousands of new apartments, restaurants and offices in a key area of ​​Chesterfield. The project called for approximately $3 billion in residential and commercial development, including the redevelopment of the Chesterfield Mall.

St. Louis County appointed Commissioner Jay Nelson and Parkway and Rockwood School District appointees voted against the incentive, known as Tax Increase Financing (TIF).

The TIF is expected to be presented to City Council, which will have the final say, at its Dec. 5 meeting. The city plans to spend $10,000 to distribute mail about the incentives to residents.

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Onshore developers The Staenberg Group and CRG are leading the projects.

The Staenberg Group wants to demolish Chesterfield Mall at Chesterfield Parkway West and Wild Horse Creek Road to make way for a project it was involved in that required a 259-room hotel, nearly 3,000 housing units and millions of square feet of office and retail space.

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CRG plans to build nearly 1 million square feet of retail and restaurant space west of the mall, a public plaza with a floating stage and gardens, and more than 565 housing units.

The recommendation comes after weeks of debate in which the Parkway and Rockwood school districts clashed with the city of Chesterfield over TIF and how many students the new development would attract.

TIF will transfer some of the new tax revenue generated by the projects into a special fund to pay for new infrastructure such as parking lots and roads for both projects. The TIF is valid for 23 years and freezes property taxes at current levels. As real estate appreciates, the TIF will “capture” property tax increases from the base tax rate and use those funds for other purposes. TIF will also take 50 percent of sales and utility taxes from the development for other purposes.

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The districts argued that TIF would divert funds needed to educate the more than 800 students expected to reside in the development and attend primarily three schools in the Parkway District. Parkway officials worry that TIF could lose millions of dollars in revenue and force the district to add trailers for so many new students, seeking to increase taxes or redraw the school’s boundaries. Depending on registrations, the region expects to lose between $44 million and $235 million over the lifetime of the TIF.

At the same time, the city says the projects will expand the tax base and ease the burden on ordinary Chesterfield residents. It said the districts had inflated their student numbers estimates, which would net them $216 million in additional revenue. The city expects the developments to add fewer than 300 new students.

Six people spoke during Monday’s roughly 35-minute meeting, including former mayor John Nations, who was critical of Parkway and its chief financial officer, saying the region would be in worse financial shape without TIF.

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“Parkway didn’t hire anyone to advise them. They sent an accountant. If you asked him how to fund a lunch program or run a transit system, I’m sure he was pretty good at being a school accountant,” Nations said.

He suggested new developments could break away from the Rockwood and Parkway districts and create their own school districts.

Monday’s proposal is non-binding, but if the committee votes against TIF, it would require a two-thirds vote of the city council to veto it and limit the money’s use.

Chesterfield has just one other TIF, which pays for levees and road improvements, while the city attracted new business to the area after a major flood in 1993. The city generated more revenue than expected and was able to retire about a decade earlier, officials said.

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