At long last, the that have plagued the 50度灰视频 region for decades could be ending. Late last month, Gov. Jay Nixon signed House Bill 1434, which will make tax-increment financing a lot less lucrative for developers.
Municipalities could still steal retail centers from their neighbors by offering sweet tax-financing deals. But unless a countywide TIF commission signs off on the deal first, there would be strict limits on what such funding could be used for.
The new law, which affects 50度灰视频, St. Charles and Jefferson counties, goes into effect Aug. 29. That will affect Maryland Heights鈥 to develop up to 1,900 acres of Missouri River floodplain near Creve Coeur Lake.
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Six developers 鈥 among them attorney Alan Bornstein and his partner, real estate tycoon and Los Angeles Rams owner Stan Kroenke 鈥 have submitted general proposals for all or part of the land. The calls for the City Council to decide among the plans on Sept. 15. Requests for economic incentives are to be submitted Sept. 22, well after the new law takes effect.
Tax-increment financing allows developers to capture a portion of new sales and property taxes generated by their project to pay part of its cost. Since 2008, municipal TIF projects have first had to be OK鈥檇 by county TIF commissions. But current law allows city councils to override the countywide panel鈥檚 recommendation with a two-thirds vote.
Under the new law, TIF financing could only be used for demolition of buildings and clearing land. In the Maryland Heights project, most of the property is farm fields.
sponsored by Rep. Andrew Koenig, R-Manchester, was passed 145-12 in the House and unanimously in the Senate. Republicans and Democrats alike recognized what have found: The $2.5 billion in retail TIFs in the region in the past 20 years created very few net new jobs. Instead, they shuffled tax revenue from one municipality to another, cannibalizing city and school district budgets.
The Legislature approved countywide TIF commissions eight years ago to bring a regional perspective to what had become inter-city civil war. But the loophole allowing city councils to override the countywide commission meant business as usual.
Missouri adopted TIF laws in 1982 to encourage development in truly blighted areas. Later 鈥渆conomic development areas鈥 were added to the TIF law, enabling thriving neighborhoods and farm fields to become eligible.
TIF financing was a godsend to developers and 鈥渨inning鈥 cities like Des Peres and Chesterfield. Cities that lost retail tax bases suffered; some asked their police departments and municipal courts to . The overall effect on regional economic growth was negligible.
Thinking regionally is critical to the future of 50度灰视频. TIF reform is a big step forward.