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Follow-up on Proposed Bill to “Blight” a Mile of Jefferson Ave.

October 6, 2006 Events/Meetings, Planning & Design, South City 14 Comments

Last evening I attended the meeting relating to the proposed ordinance to blight the properties fronting onto Jefferson Avenue from Gravois to Potomac (see prior post). Basically, it is a routine action and nothing to get excited over — both good or bad. In short the “plan” does little more than make it easier to grant 5-year tax abatement to any qualifying project within the boundaries of the area. So, rather than having to go through a mountain of paperwork and numerous meetings to give tax abatement to multiple projects in the area each and every year, this simply allows the bureaucrats to approve projects and issue the tax abatement. In general, I believe this is a very good thing.

ortman_bb153Ald. Ken Ortmann and Christian Saller from the SLDC (St. Louis Development Corporation) did a good job explaining the various aspects of the ordinance and exhibits. One they could not stress enough is the language that does specifically prohibit the use of Eminent Domain to acquire properties. Repeating for those in the back: this does not have any provisions for eminent domain and quite clearly spells out that it is prohibited. Still, I can sympathize with those that were in the room with more than a little distrust at those in office. One citizen mentioned how former Mayor Vince Schoemehl said there would not be a QuikTrip at the corner of Jefferson & Chippewa but that it got built in his last year in office anyway. Distrust runs rampant and given our history and current lack of communication I understand.

In reality this isn’t a plan at all. I think they have to call it a plan to meet state guidelines just like they must technically “blight” an area even though they’d much rather use a better term. A plan, in my mind, would have more substance and less boiler plate language. OK, maybe not less boiler plate but certainly more specifics to the area. More on that later.

As we had with the McDonald’s drive-thru issue on Grand, a number of uses are prohibited in the area — but only if they receive tax abatement. So, if a drive-thru restaurant wants to open next door to a check cashing place (with parking in front) nothing in this plan prevents that from happening — it only prevents them from getting tax abatement. Of course, on Grand we saw Ald. Florida go before the LCRA board and seek an exemption for the parcel sought by McDonald’s and such an exemption would have then paved the way for tax abatement. Back to this hypothetical fast food restaurant and check cashing place that want to move into the area and build new. The “plan” does nothing to prevent this from happening — all we have is the outdated zoning code and Ald. Ortmann’s verbal word he wouldn’t allow that.

Based on Ortmann’s track record with respect to buildings I think I’d take him at his word. He is very passionate about saving buildings and I think he understands the fundamentals of good urban design. But, Ortmann will not be alderman forever. Furthermore, in five years the ward boundaries will change and it is quite possible that some or all of this redevelopment area will end up in another ward(s). What then? Well, say the Hood’s property on Jefferson near Cherokee ends up in another ward by 2012. And say whomever is Alderman is not so urban minded and goes along with a developer that wants to build a typical strip center — one story buildings set far away from the street behind a sea of parking. Guess what, the process for getting tax abatement for that “investment” is much easier if this bill is passed now in 2006. Ortmann wouldn’t go for such a thing on that site but the blighting is not conditional upon Ortmann remaining Alderman. If they want to write ordinance such that it is only valid as long as he remains Alderman for the area in question then I’m OK with it. But, in the real world, that isn’t very realistic. Neither is leaving matters of urban design up in the air depending upon the whim of who happen to be Alderman on a given day in time. If we are going to make it easier to give blanket tax abatement for an area we need to pass some blanket zoning for the same exact area.

The F-Neighborhood Commercial zoning and the G-Commercial & Office District zoning leave too much at risk. They list some permitted uses, ban others and never once talk about what the city is seeking. Title 26 will show you all the zoning classification that exist in the city. Basically, this all needs to be tossed aside and started from scratch. In the meantime, we can do what is called an “overlay district” where a new zoning code is written that replaces the existing code for that particular area.

A few examples of items that could be covered in a new zoning overlay for this soon to be blighted area include:

• Bike parking requirements for commercial businesses. This could be written such that for every bike parking space they include in the project they could reduce the number of required auto spaces. The zoning could also allow for the placement of bike racks within the public right-of-way without the cumbersome requirements now placed upon building owners that wish to have bike parking.• Provide maximums on parking rather than minimums. Currently the zoning sets minimums but owners are free to provide excessive amounts of surface parking if they’ve got the room. Back to the Hood’s location at 3300 S. Jefferson, the site is roughly 1.44 acres. There is nothing in the code to prevent them from putting up a small commercial building with the balance being all paved parking. Is that what we want? Developers will ensure they have a minimum of parking, what we need is to keep them going overboard and actually having too much.

• Address front & side setbacks — do not permit large setbacks. Currently in the F-Neighborhood Commercial zoning district an owner can place a structure back 50 ft on the site. This is enough to get a drive and parking in front of the building and ruin the street. Why should investors do a project in the area when the guy next door can come along and do a suburban project set back 50ft from the property line?

• Outright prohibit drive-thru establishments and gas stations. The last thing we want is for Hood’s to be replaced with a QuikTrip. The one saving grace with the Hood’s site might be the new Benton Park Historic Standards but those mostly regulate the building design and do not relate to the overall site planning issues. They would, to be fair, likely prevent a standard QuikTrip from being built. However, the corner of Arsenal & Jefferson where condos are planned but not yet financed has no such protections. A QT or Walgreen’s could be built on that corner per the zoning. Again, Ald. Ortmann says he wouldn’t do that and I tend to believe that he would not but the option still remains should the condo deal fall through.

• If you read through the zoning classifications and the historic standards you know what you can’t do. But, you don’t get a clear picture of what is envisioned for the area. This is how we end up with the new garbage that we do, we don’t articulate how we’d like this corridor to look. The solution? Form-based codes. Here are advantages from the Form-Based Codes Institute:

Eight Advantages to Form-Based Codes
Because they are prescriptive (they state what you want), rather than proscriptive (what you don’t want), form-based codes (FBCs) can achieve a more predictable physical result. The elements controlled by FBCs are those that are most important to the shaping of a high quality built environment.
FBCs encourage public participation because they allow citizens to see what will happen where-leading to a higher comfort level about greater density, for instance.

Because they can regulate development at the scale of an individual building or lot, FBCs encourage independent development by multiple property owners. This obviates the need for large land assemblies and the megaprojects that are frequently proposed for such parcels.

The built results of FBCs often reflect a diversity of architecture, materials, uses, and ownership that can only come from the actions of many independent players operating within a communally agreed-upon vision and legal framework.

FBCs work well in established communities because they effectively define and codify a neighborhood’s existing “DNA.” Vernacular building types can be easily replicated, promoting infill that is compatible with surrounding structures.

Non-professionals find FBCs easier to use than conventional zoning documents because they are much shorter, more concise, and organized for visual access and readability. This feature makes it easier for nonplanners to determine whether compliance has been achieved.

FBCs obviate the need for design guidelines, which are difficult to apply consistently, offer too much room for subjective interpretation, and can be difficult to enforce. They also require less oversight by discretionary review bodies, fostering a less politicized planning process that could deliver huge savings in time and money and reduce the risk of takings challenges.

FBCs may prove to be more enforceable than design guidelines. The stated purpose of FBCs is the shaping of a high quality public realm, a presumed public good that promotes healthy civic interaction. For that reason compliance with the codes can be enforced, not on the basis of aesthetics but because a failure to comply would diminish the good that is sought. While enforceability of development regulations has not been a problem in new growth areas controlled by private covenants, such matters can be problematic in already-urbanized areas due to legal conflicts with first amendment rights.

~ Peter Katz, President, Form-Based Codes Institute

Form-based codes are the basis of the many successful New Urbanist projects all over the country, including New Town at St. Charles. This establish a vision and allow for deviations that result in varied architecture that gives an overall desired character through massing and such. Standard codes simply can’t achieve that. For New Town the developers have a form-based code which is an overlay to the standard zoning in the City of St. Charles. Once more, New Town’s zoning is entirely different from and replaced the standard zoning classifications and terms for their section of St. Charles. There is no reason this cannot be achieved on this mile of Jefferson and anywhere else where we need to strengthen the urban fabric.

Through a public question and conversation afterwards I think Ald. Ortmann is open to the general concept of such an overlay for the zoning but this is the part that I don’t think he quite gets — yet. He certainly didn’t voice any strong objections. I believe the combination of the “blight” to offer 5-year tax abatement and new zoning will greatly strengthen this corridor. A simple blighting plan could end up light so many others — “blight” remains for decades with little action.

 

Currently there are "14 comments" on this Article:

  1. STL Cop Watch says:

    Were there any representatives of the STL Police Department in attendance protesting about tax abatements cutting into their pay and gas money for those commutes back and forth to St. Charles County?

     
  2. travis reems says:

    Even though Jim Shrewsbury is fond of saying that TIFs (another form of tax based development incentive) cut into city services, like paying the police, the truth is that without such incentives–TIFs, abatements, etc.–we would have lower revenue to pay for those city services. Remember 50% of something is better than 100% of nothing.

     
  3. 15thWardSTL says:

    You make some very good points here about the relationship between planning and outcomes. I think the major problem here is that the Board of Aldermen utilizes a “toolkit” approach to redevelopment – there are various financial incentives available to developers, so they try out the various tools one-by-one until one fits. Sometimes this works, other times it doesn’t. Tax abatement, TIF, acquisition writedown, grants, facade improvement, tax credits, even eminemt domain: creative developers can pull these pieces together to get a project built.

    The problem? This all happens either in a vacuum or under cover of a private “plan” hatched by a private developer with cover provided by the politicians. There is no enforceable land use plan, comprehensive plan, proactive zoning ordinance, or district plan! There is no public VISION!

    The result? Out politicians waste a whole lot of time promoting and defending individual projects. Citizens waste a whole lot of time working to “stop” bad projects and complain about there not being any “good” ones.

    Ultimately, I think this blighting ordinance is probably a good thing. It should be tightened up (stop using this boilerplate ordinance that doesn’t address the individualities of the site). It should also be passed in conjunction with the preparation of an ACTUAL plan for redeveloping the Jefferson business corridor.

     
  4. Travis, tax abatements, as well as other forms of subsidized economic development, do reduce the amount of revenue the City would have in the short term. Tax revenue is lost that would be collected during the term of the particular subsidy. The argument is that after the term expires, more business exists than before, therefore the revenue probably will be collected, along with the secondary benefit of economic activity. Also tax revenue is not always the biggest concern while growing business or residential development is primary. Clearly tax abatement works however it does pose a problem for the SLPS as they must issue it whenever the City does even though they are separate governments. We should also remember that issuing tax abatement increases short term dependency on the earnings tax.

    [UR – Travis’ point has some validity. Say a property is bringing in $2000/yr in property taxes and we give a 5-year tax abatement in exchange for the owner doing a major rehab of the property. We continue to collect the $2,000/yr for the next five years and in the 6th year we can begin to collect taxes on the new value post-renovation. The argument is without the renovation we might continue collecting only the smaller amount.]

     
  5. The problem with Tax Abatement is that property tax is the primary vehicle for funding our public schools. The Board of Aldermen passes tax abatement ordinances, but it is the public schools that are most affected – and they currently have no say in the process. That is a problem, regardless of whether Tax Abatement is a good development tool or not.

     
  6. awb says:

    Were TIFs used for St. Louis Marketplace on Manchester or St. Louis Centre? How did that work out for the City? Anyone know?

    Tax abatements are less offensive to me, if the property values really are expected to increase. But how does the Hancock Amendment play into that theory. Doesn’t the City have a set amount they get from property taxes, adjusted for inflation annually? So don’t the unabated properties take up the slack until the abatement period is over? Does anyone have the scoop on how this really works?

     
  7. Brian says:

    With TIF, the incremental increase in property taxes is fully given up (including the school’s share), only the incremental increase in economic activity taxes (mostly sales) is split 50-50. So when it comes to the property tax portion of TIF, TIF is not much different than property tax abatement.

    In general, households moving into tax-abated homes likely won’t be sending their children to public schools, if they even have school-age children. However, we all help pay for services whether we use them are not. Downtown loft dwellers still help pay for yard waste, just as a family sending their kids to private schools still helps for our public schools.

    Looking out for taxpayers, our Comptroller has called for a reduction in development incentives. But rather than stymy our City’s revitalization, maybe one solution would be to no longer abate via frozen tax bill or divert into any TIF account the school district’s share of property taxes in the future. Of course, with tax abatement, the schools’ share is the bulk of a homeowner’s bill, so then property tax abatement wouldn’t remain much of an incentive. However, with TIF, the splitting of sales taxes could still make such projects a win-win for development and the City.

     
  8. SMSPlanstu says:

    Brian I disagree with you,

    At the Missouri APA Chapter conference yesterday I learned through the Downtown Redevelopment session that the City of Springfield was able to use Chapter 353 Tax Abatement at 100% for 25years for a new development not yet constructed called College Station. It seems that the City and districts lost taxes, but the City required that College Station developer pay a parking leasing fee and thus regained the supposedly dealt away taxes. Furthermore, the City dedicated a portion of its sales tax and gained portions from Greene County and Missouri to amount to a 4.265& sales tax funding source to help finance the City’s side of the development. The lecturer said that “projects need to be market driven and public financing should ‘fill the gap.’

    The lesson is that on the surface Tax Abatement may look like it financially harms a city and school district, but below the surface governments should be creative at regaining the tax money and securing forms of public financing.

     
  9. Bill says:

    The base benefit of tax abatements is that at least SOME tax is being collected on properties that otherwise would continue to be vacant for years.

    While it might seem that a building which should be paying $ 2000 a year for taxes, then be renovated and truly should be paying $ 4000 a year…is being counterproductive to the budget of STL.

    But, many buildings aren’t even having the $ 2K collected each year due to lack of the ability to contact the owner, death of an owner of record and the heirs can’t be found, properties which are so covered up in paperwork, there is no one legally that can be contacted.

    Remember, tax abatement is an incentive for individuals, business and even corporations to invest their money into an area. Without tax abatement, these same people could (and most likely will) pass on the area and find someplace, possibly out of the City, to put their business.

    So, let’s look at the calculations on a building that today should be collecting $ 2K/year for taxes.

    No tax abatement:

    Tax = $ 2K, Tax collected = $ 0 $$$ going into the STL City budget = $ 0

    After 5 years the $$$ that have gone into the STL budget = $ 0

    Starting in year 6, the $$$ going into the STL budget is $ 0/year.

    With tax abatement:

    Tax = $ 4K (on a renovated building), Tax collected = $2K (abated amount) $$$ going in to the STL City budget = $ 2K

    After 5 years the $$$ that have gone into the STL budget = $ 10K

    Starting in year 6, the $$$ going into the STL budget would be $ 4K/year.

     
  10. Gerry says:

    Previous posters have introduced good discussion regarding the various City services whose revenue is reduced by the loss of property tax revenue through the use of tax abatement incentives. I’ll focus on my understanding of the City’s use of residential tax abatement. The merits of residential tax abatement need to be given serious review by the City’s elected officials, along with SLDC, CDA and other agencies dealing with projects that involve abatement. As members of the public, we are directly impacted by the development plans and legislation that enacts tax abatement.
    Who are the beneficiaries of the abatement? Clearly the homeowner benefits, usually for a ten year period. The owner might be a purchaser of a newly constructed home, or a rehab. Existing homeowners are also granted abatements when undertaking substantial renovations. Residential developers stand to benefit by attracting buyers with the offer of tax abatement. However developers have come to expect abatement as a given; “everyone else is getting it so why can’t I?” Tax abatement has become an entitlement for many developers.
    Would the housing development (new build or rehab) have been constructed regardless of the availablity of tax abatement? My guess is that in most cases, the answer would be “yes”.
    One might also argue that a homebuyer purchasing a tax abated home can qualify for a slightly larger monthly mortgage payment and thus afford a slightly more expensive home. Developers might be pricing their product accordingly to benefit from the boost in buying power of these homebuyers.
    Finally, is the feature of tax abatement a pivotal factor in the homebuyer’s decision whether to purchase the abated home or not? I suspect that the abatement may play a true incentive role for the most affordable (low/moderate income buyer) housing receiving abatement. However I seriously doubt that for market rate housing, especially when the purchase price exceeds $150,000, that tax abatement is a determining factor in their choice to buy the home or not. If the homebuyer is looking at similarly priced homes ( an abated home versus an unabated home) then the existence of abatement will be a factor.
    If abatement is not an incentive to buyers of much of the residential property receiving abatement, why is the City providing tax abatement?
    The City should be asking these questions of the various types of development receiving abatements. There are some strategies to modify the allocation of tax abatement. The sale price of a housing unit could be used as a threshold for determining the duration of abatement. The higher the sale price, the shorter the abatement period. The portion of the improved property value abated could also be varied (X% of improvement value abated for Y years).
    The citizens of St. Louis deserve a thorough and transparent review of the use residential tax abatement, together with other incentive programs for development.

     
  11. Joe Frank says:

    Ken has started doing only 5-year tax abatement for residential rehabs in the 9th Ward.

    I think part of the motivation for this particular plan is to offer tax abatement potentially not just for the large Fleur-de-Lys development (itself also financed by a TIF currently in the works) but also for its potential to spur revitalization along that entire corridor. While there are some magnificent large homes there, there are even more commercial properties in very dilapidated condition. And some really crummy active commercial properties, like the BP Station and the Rally’s!

    Sure, it would be better to have a blighting plan for all of S. Jefferson from I-44 to Chippewa, spanning the 7th, 9th, and 20th wards. And Ken did get a little snippy when I asked at the BPW meeting why the Cherokee Rec Center site was excluded from the blighting plan, while Garfield School was included.

    I think, 10 or 20 years forward, it’s just as likely Cherokee Rec could be sold for replacement with condos as it is Garfield could be sold for conversion to condos. But I guess we don’t like to think about the possibility a CITY facility could ever close, just like schools can and do close.

    If Cherokee Rec DOES ever close though, I’d love to see Wyoming reopened to traffic east of Jefferson.

     
  12. Joe Frank says:

    Also at that BPW meeting (June I think?), Ken made the ridiculous claim that it was OK he backed the Check Cashing place that vacated a (now-boarded-up) storefront on S. Jefferson behind the Indian statue at Cherokee, to move into the former Jack-in-the-Box building.

    He said that while Check Cashing services are not something he’s fond of, they also offer needed services like paying utility bills.

    What, and full-service grocery stores don’t(like we used to have across the street — recall Hood’s was a National store until 1992)?

    Ugh. I’d rather see a well-thought-out expansion of the historic storefront building onto the former drive-thru site, rather than just moving next door into that crummy ugly building.

     
  13. Can you please let me know if this bill was ever passed.

    [UrbanReviewSTL — For the record, very few bills are ever not passed.  This bill became ordinance 67336.]

     
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