Citizens Call For Community Benefits Agreement Before TIF Vote

UNIVERSITY CITY, MO — With a public hearing just over a week away, many U-City residents still feel they are in the dark about the proposed redevelopment on Olive Boulevard in the city's third ward. A special edition of the city's newsletter has yet to go out to residents, and at least one public meeting (held before the joint city council-school board meeting April 30) doesn't seem to have been posted on the city's website in advance. Residents say city officials walked a flyer around their neighborhood just a few days before the meeting, leaving many unable to attend and others unaware it was even scheduled.

Some residents have also raised concerns about the development's public benefit and racial equity. They are demanding a Community Benefits Agreement to protect the communities in the development's path.

"A Community Benefits Agreement (CBA) is a contract between community representatives and a real estate developer requiring the developer to provide specific benefits or protections to the affected community," Margaux Sanchez writes in the online magazine Dear St. Louis. "It can address topics such as fair employment, affordable housing, youth resources, racial equity, and historic preservation.

"Without a CBA, the playing field is not level, and community benefits are not guaranteed."

Some U-City residents will hold a press conference prior to the May 15 TIF commission meeting at the Heman Park Community Center to ask that the project be delayed until a CBA can be negotiated.

Others have raised concerns about the project's transparency.

"The TIF Commission is expected to make their recommendation as early as immediately following the Public Hearing on May 23, with Council voting on the recommendation June 8," said University City resident Ellen Bern. "So how much is the City really seeking or listening to community input?"

The city's public relations firm, ESM Marketing, has set up a new Facebook page to sell the development to residents, offering several easily-shareable answers to frequently-asked questions, but more in-depth information remains hidden in complex financial documents or locked behind confidentiality agreements.

At least one of those documents, an analysis by St. Louis Development Corporation financial analyst Jonathan Ferry, was discussed at the April 30 council-school board meeting, but has not yet been made public.

Critics have also raised questions about how the University City School District would benefit from the TIF. School board member George Lenard expressed skepticism at the apparent certainty of the cost-benefit analysis conducted by PGAV Planners, and said the numbers provided don't show a benefit to the school district past the expiration of the TIF in 2041.

"I don't see the pot of gold," Lenard said.

According to PGAV, the TIF would freeze property taxes in the redevelopment area, meaning that even if new development raises property values significantly, the city wouldn't see any of that money until 2041. The developer said that actually benefits the city because property values are decreasing in the area, but PGAV estimates property tax collections would grow by approximately 1 percent each year without the new development, meaning the school district would actually be losing some tax money until the expiration of the TIF.

But, the school district would gain overall, according to PGAV. Taken together, real and personal property taxes and commercial surcharges would yield about $65,000 extra revenue to the school district each year if the development goes forward. PGAV's estimate is based, in part, on numbers provided by the developer, the planning firm told the city in a May 2 memo.

"The tax revenue projections contained in this report represent prospective information, opinions, and estimates regarding a development project that is not yet constructed," PGAV offered in a disclaimer. "These projections are not provided as predictions or assurances that a certain level of performance will be achieved or that certain events will occur. The actual results will vary from the projections described herein and the variations may be material."

How the potential sale of the Ronald E. McNair Administration building factors into PGAV's estimates — or if it does at all — is not clear.

The district announced in April that it has been in talks for almost a year to sell the McNair building to Novus. The developer says the property is necessary to relocate the Torah Prep Girls School, which currently sits in the middle of the planned development. School Board Vice President Kristine Hendrix said no decisions have been made regarding the sale of McNair, but the developer made it clear the the entire project would be threatened if the sale doesn't go through.

"In order for us to purchase [the Torah Prep] site, we have to find them an alternative site that works for them," said Novus director of leasing Michael Koch. "I think, as you know, where the McNair building sits is right there centrally located to their attendees and their congregation, so that's a very important strategic location for them."

Asked if the project hinges on the sale of McNair, Koch said, "It's a very very important piece," adding that currently it is the only feasible relocation option. "Does that mean the project is completely dead [if the sale falls through]? I don't know. I can't give a concrete answer to that."

Critics say Torah Prep has been trying to buy the building for years, and that the district had already decided to keep the building as the site of a future pre-K center. The amount of the developer's offer for the McNair building is currently protected by a confidentiality agreement, making it impossible for the public to evaluate the proposal.

Also protected by a confidentiality agreement is the identity of the big box retailer that will anchor the future development. It is likely to remain secret until after the proposal is approved, Novus president Jonathan Browne said, meaning citizens will not have the information they need to evaluate the project in time for the public hearing.

Novus has already bought the majority of the land in the redevelopment area, and seems to have done so even before submitting its formal proposal earlier this year. Novus' proposal was the only one submitted to the city, which raises questions about whether University City is getting the best deal possible.

Tom Sullivan, a U-City resident and local government watchdog, expressed his concerns April 30. "I would hope the city could provide a timeline of when this all started and who met with who about what," he said. "I was surprised to see this is so far along. [Novus] bought Jeffery Plaza. They have all these homes under contract. Who gave them the green light? Obviously somebody did."

Novus has requested $70.5 million of public assistance to complete their project, and it's not clear how critically the city has examined that number. The developer estimates its return on investment would be 9.43 percent with public assistance and 4.34 percent without public assistance.

"Generally, as a minimum threshold, an acceptable rate of return for a project of this size and scale would be in the 10 to 12 percent range," Browne wrote to University City community development director Rosalind Williams in a letter dated March 30. "As you can see from the above analysis, even with public assistance, the project return falls below this threshold, however, we consider it a fair return, and still worth pursuing, due to the tremendous benefit it stands to be for the community and the region."

Browne goes on to say that the project is not financially feasible without public money. It's not clear what, besides altruism, drew Novus to a project that, by their own admission, falls below their own threshold for an acceptable rate of return.

Read Patch's previous reporting on the proposed Olive development below:

• Mostly White TIF Commission Weighs Fate Of Minority Community
• Councilmember Smotherson Responds To Patch TIF Commission Article
• Olive Development Meeting Scheduled For 6:30 Tonight: Watch Live
• Olive Retail Anchor To Remain Secret Until TIF Is Approved
• Sale Of McNair Building, Eminent Domain Discussed Monday Night

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Photo by J. Ryne Danielson/Patch