by Michael R. Allen
Governor Matt Blunt has not yet signed or vetoed the economic omnibus bill passed by the Missouri Legislature (HB 327) that contains the $100 million tax credit program to benefit Paul J. McKee Jr.’s north St. Louis land assemblage project.
Meanwhile, no other bills containing the “Distressed Areas Land Assemblage Tax Credit Act,” as the proposal for the credits is formally known, passed the both houses. The House inserted the land assemblage tax credit into SB 22, a bill concerning local political subdivisions, but during a joint conference on the bill Rep. Thomas Villa had the language removed. (However, Villa is a co-sponsor of HB 991, which would directly enact the Distressed Areas Land Assemblage Tax Credit Act, and voted in favor of HB 327.)
The Distressed Areas Land Assemblage Tax Credit Act is far from the most controversial part of HB 327, a bloated bill containing many questionable tax credit proposals and bearing an estimated cost of $113 million in lost state revenue. Should Blunt veto the bill, the Distressed Areas Land Assemblage Tax Credit Act would be defeated for now.
Of course, the proposal will return. Two obvious paths exist:
The proposal could return in its current form, engendering the same opposition as it has attracted from north side residents, progressive legislators and urbanists.
The proposal could be refined through conversation with critics so that their concerns are answered.
Personally, I love the idea of a $100 million tax credit program directed at north St. Louis. Given that many residents of surrounding, wealthier counties are the descendants of those who abandoned north St. Louis, but who are still culturally and economically dependent on the city (which cannot tap the revenues of its neighboring counties), state aid is logical and fair. However, the details of the proposal do not create the sound public policy that should be crafted to guarantee that the $100 million program actually results in quality development in north St. Louis.
– The project size is greatly out of scale with north St. Louis. Nowhere in north St. Louis do 50 contiguous acres of vacant land exist. The largest vacant site is the Pruitt-Igoe housing project site of 33 acres, which remains undeveloped. The proposal should reduce the minimum project size to 5 acres and cap it at 45 acres. This would encourage more context-sensitive planning, and allow multiple developers with different plans to utilize the tax credit.
– State tax credits should not be used to cover bills and fines from municipal government for code violations or demolition. That’s just wrong.
– The tax credit needs to require that the applicant’s properties meet municipal codes at the time of application. State law should not encourage the violation of municipal law.
– The tax credit should establish a time line for redevelopment. Land assemblage alone does not revitalize distressed areas. If that was the case, north St. Louis would be in great shape given the vast amount of city-owned real estate there. The proposal should provide greater guarantee that assemblage projects will lead to actual development.
– The tax credit should not be used to acquire occupied housing units. What is most needed on the north side is creative reuse of vacant property. Allowing use of the credit for occupied housing seems to encourage the displacement of existing residents. McKee’s project has involved acquisition of dozens of occupied dwellings that are now vacant nuisance properties. The people his agents moved out of north St. Louis could have been stakeholders in renewal efforts.
– The tax credit should require historic preservation planning for affected areas. North St. Louis is one of the most architecturally significant areas in eastern Missouri, and should not be bulldozed wholesale. As written, the tax credit actually reimburses up to 100% of demolition costs.
Should the tax credit proposal be defeated, there is then a chance to improve it greatly. Hopefully its supporters will consider doing so.