Yesterday, I testified in front of the Saint Louis City Tax Increment Financing (TIF) Commission regarding the proposed $10 million subsidy for a proposed new apartment complex and grocery store in the Central West End. I have said before that, like an unhappy family in a Russian novel, every TIF is awful in its own unique way.
This TIF is no different. Two awful policy items stand out in this TIF. First, this is one of the wealthiest and most successful parts of Missouri. If the corner of Euclid and West Pine needs a subsidy, then everywhere in the state deserves a subsidy for anything. Let’s just end the dog-and-pony shows and subsidize everything. We can stop paying Development Strategies to come up with terrible analysis that would flunk a high school economics course. We can stop pretending there is a deliberative process involved and just go right to cutting checks upon request. Because that is basically where we are now in Missouri.
The second awful aspect is the special absurdity of the “blight” designation here. The owners of the property — who are seeking the TIF and blight designation — have owned the property for some time and are benefiting from allowing the property to be “blighted” in legal terms. (Note: It is not really “blighted.”) Because the owners tore down the prior office building and did not improve the property for several years, their baseline tax rate under TIF will be far lower than it would have been otherwise. State statutes should be changed to prevent property owners from deliberately decreasing the assessed value of their property so that they can have substantially lower payments-in-lieu-of-taxes (the method by which a TIF subsidy operates) when they apply for a TIF.
This project absolutely does not need a tax subsidy. So, of course, the proposal passed the TIF Commission unanimously, 8-0. Even the few commission members who asked tough questions about the TIF voted in favor of it. So it goes.
