St. Louis Marketplace – a predictable failure
One of the biggest fallacies promoted by civic leaders in St. Louis (and elsewhere) is their overblown & costly projects are going to “spur development.” This is often the basis for approving a TIF district (Tax Increment Financing) and the use of eminent domain to steal people’s homes & businesses for the public good. Such thinking is seldom questioned at the time and rarely questioned after the fact.
I’ve said it before but it is worth repeating – spending x-million dollars on a project does not necessarily mean a) the area will benefit from this “investment”, b) the greater public good is actually being served and c) that what is being built is worth a shit. In the case of St. Louis Marketplace – none of these are true.
St. Louis Marketplace, the struggling shopping center developed in 1992 with $15 million of public improvements, once again is getting help from the city of St. Louis to secure a supermarket
Don’t get excited about a grocery store at St. Louis Marketplace – this quote is from a December 1996 story in the St. Louis Business Journal (click here to read full article). At the time St. Louis Marketplace was only four years old. In the eight years since we’ve seen two other anchor spaces vacated – Builders Square & Sam’s. Smaller stores such as a Sears Hardware & Appliance store have also closed. Linda Tucci continues in the same story:
The city has a large stake in keeping St. Louis Marketplace alive. Unlike many TIF deals, the $15 million in bonds for St. Louis Marketplace are backed by the city. This means that if the shopping center does not generate sufficient taxes to meet the bond payments, the city must back up the shortfall. According to city officials, the debt service on the city-backed bonds is current.
I do not know the status of the bonds and debt at this time. My understanding is these are often paid over a 20+ year period so it is my assumption the bonds are not yet paid in full. Given all the vacancies, I doubt the project is able to cover it’s debt load.
“I think the city has gone TIF-crazy,” says Joseph Heathcott, American Studies professor at SLU. He points to the struggling St. Louis Marketplace on Manchester Road — the city’s first project to use tax increment financing — as an example of the risk and burden levied on taxpayers’ backs. “If more projects like that end up failing, we are going to be paying for decades.”
Heathcott’s quote above was from a story in the Riverfront Times regarding an big-box sprawl TIF project proposed at Loughborough & I-55 (read story). It appears St. Louis is about to repeat past mistakes.
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