St. Louis Public Schools, City Hall’s coffers, and museums and libraries across the city will get a cash infusion this year totaling more than $7 million under a new amendment to a tax increment financing (TIF) deal in the Central West End.
The measure, which received final approval Feb. 1 from the St. Louis Board of Aldermen, is the result of an agreement hammered out in recent weeks by 28th Ward Alderwoman Heather Navarro and officials in the offices of Treasurer Tishaura Jones and Comptroller Darlene Green.
The agreement will extract surplus money sitting unused in a special TIF fund that helped pay for the Argyle parking garage at the northwest corner of Lindell Boulevard and Euclid Avenue. The legal structure of the TIF means that it gets most of its money from property and sales taxes generated by the nearby Chase Park Plaza.
“This bill is going to distribute the tax money that’s been generated by the successful redevelopment of the Chase Park Plaza; if we do these projects in the right way, they should result in a net benefit for the city,” Navarro said in an interview prior to the amendment’s final approval. “We’ve just had to do a little bit more work in this case to make sure these funds get to the places they should be going: our city and our schools.”
The Argyle garage, which has about 460 spaces and houses the Schlafly Branch of the St. Louis Public Library on its ground floor, opened in 2001. The garage is owned by the city’s Parking Division, which is overseen by Jones’s office.
TIFs are economic development tools that capture tax revenue — from property, sales, payrolls and other sources — and are used to help finance projects including shopping centers, apartment buildings and hotels. The original legislation creating the Argyle TIF was sponsored in 1998 by then-Alderwoman Lyda Krewson, now mayor of St. Louis. Its purpose was to ensure a reliable supply of parking for businesses and restaurants in the neighborhood.
Green’s office estimates that by June 30, when the city’s current fiscal year ends, the Argyle will disburse a total of $7.7 million in “surplus” cash. This includes $3.1 million for the city’s budget, $3.5 million for the school district and $1.1 million to be divided among other tax-supported entities including the St. Louis Public Library, the Zoo-Museum District and the Metropolitan Sewer District.
Of the $3.1 million for the city, $2.0 million would go to the general fund and $1.1 million would go to dedicated budget funds that support public safety, conventions and tourism, transportation and other programs, according to estimates provided by Green’s office during an aldermanic committee hearing on the bill.
Navarro is running for re-election in the March Democratic primary. The new ordinance will not generate any new tax money; it merely brings forward the distribution of the Argyle’s surplus funds by a few years, ahead of the TIF’s scheduled expiration in late 2021.
This appears to be the first time city officials have attempted to free cash early from a TIF, and it may end up being the only such attempt. None of the city’s other TIFs appear to have cash balances of any consequence, according to McPherson’s review of city records.
Beyond the surplus money in the TIF, $2.9 million of its remaining funds will go into escrow to satisfy the Argyle garage’s legal obligation to help pay off the Parking Division’s debt.
A further $2.6 million in the TIF is earmarked for public improvements in and around the nearby Maryland Plaza business and entertainment district. These improvements, subject to specific requirements laid out in the ordinances governing the TIF, fall under the authority of the Central West End North Special Business District.
The fixes to the Argyle TIF come amid growing scrutiny of TIFs and other development incentives. Critics say TIFs are unnecessary handouts to developers that steer investment away from struggling neighborhoods and distort the property market; proponents argue than when used correctly, TIFs foster development that wouldn’t have otherwise happened and generate new tax revenue.
“We desperately need to reform the tax increment financing system to ensure public dollars support public services,” Jones said in a statement from the treasurer’s office.
Jack Grone is the editor of McPherson (www.mcphersonpublishing.com), an independent journalism start-up in St. Louis. More stories about the Argyle TIF are available on the McPherson website.