urbanSTL

Grover wrote:
Yes, TIF is an economic tool and the economics should make sense. In this case I think that evaluating NorthSide is incredibly difficult as a purely economic venture. That said, property tax revenue in North St. Louis is clearly much less than it would be were development to be spurred by new infrastructure. I think this may be a case where the city needs to lead "the market." I also believe that the city stands to benefit from development adjacent to the project area - revenue that is not considered when typically evaluating the TIF.

This all presupposes Paul McKee actually builds residential. He has done nothing so far, only let property decline, and he's not a residential developer.



He has no tract record warranting we back the bonds. Does he even have a single residential developer, or even a single employer, committed to the project? Have we seen actual blueprints, or maybe none exist because he isn't sure what properties he even wants!



The City can "lead" the market by supporting projects that actually produce results, like ONSL and Dlck Gregory Place.



Ultimately you're saying that most likely we will have more success with property tax than sales tax? That we should have a sufficient revenue stream to pay back the bonds because the infrastructure will most likely be there generating taxes for a while, while retail isn't as set in stone. Then why does the City need to back the bonds if it's a slam dunk case? Why? Forgoing future revenue generated by the project itself, in order repay the bonds, that's one thing. Paying them back with current revenue, used for existing services outside the project in a time when we're already overwhelmed, if it fails is another.

^ touring tomorrow. Do they allow suburbanites with a passion for the city into these meetings? Is there a secret password or handshake?

Moorlander wrote:^ touring tomorrow. Do they allow suburbanites with a passion for the city into these meetings? Is there a secret password or handshake?

Apparently so. The threshold to become "one of them" is very, very high. Please check any other responsibilities at the door, you know, that job you may want to keep, maybe that wife (or husband) who would like to see you every once-in-a-while and God forbid if you have a child that needs your attention. Please only attend if you're Saintly in your devotion to "the cause" of opposition. I hereby will only refer to Doug as "Saint Doug".

Grover wrote:Yes, good point. I hereby apologize for having a career, wife and child, working hard to preserve my own 1897 historic home, serving on my neighborhood development committee and maintaining a blog promoting smarter development in St. Louis.

Slacker.

The Count wrote:

I have no problem with issuing TIF bonds for this project.



The problem is that McKee wants half of the issued bonds backed up by general revenue in case the expected generated (incremental) taxes fail to be sufficient to pay off the bonds.



That seems risky, especially since we are talking about $ 200,000,000.

MattnSTL wrote:

That's exactly what ecoabsence is saying.

No. That was not what Ecoabsence was saying.

If the market things the bonds are a good investment, then they will be bought. If the market has no interest in making a purchase because they are so risky, then why should the city back them up?

You just answered your own question:



MattnSTL wrote:

The bondholders are only on the hook if the guarantor of the Bonds goes bankrupt. So if the developer is the one guaranteeing the TIF and for some reason cannot pay due to shortfalls in tax revenue, the bandholders are stuck. However, if the City backs the bonds with full faith and credit, the developer risk is removed because the City will almost surely not file for bankruptcy. Instead, other services will be cut to pay off the TIF bonds. This takes a lot of the risk out of the bonds (never all), so the bonds have a lower interest rate and are easier to market. The only two guarantees the City have ever done both ended up requiring the city to pay out of general revenue, because tax revenues did not cover the notes. It's just not something I would like to see happen, especially at the level of $205 million plus interest spread over 23 years.

Which is essentially what I wrote in my earlier post. See quote above.

Doug wrote:

DeBaliviere wrote:

Grover wrote:Yes, good point. I hereby apologize for having a career, wife and child, working hard to preserve my own 1897 historic home, serving on my neighborhood development committee and maintaining a blog promoting smarter development in St. Louis.

Slacker.

If you weren't at Central Baptist then you missed the details I'm speaking of. If you didn't show up at City Affair then you missed the personal testimony of those who live within the affected area. It's not possible to make a judgment of the project if you simply read the TIF. It's not possible to understand the condition simply from the media reports.



Again, how can you rely upon property tax increases when he is not a residential developer, has done nothing to residential except let it fall, and finally has not one employer set to relocate a campus to North St. Louis?

Thanks for your repeated comments Saint Doug. Sorry to hear that the only people allowed to render an opinion are those were in attendance at the two meetings you mention. I guess I'll just stop.

Grover wrote:


The reason the city is now paying for St. Louis Centre is that the TIF was based on retail sales tax. That's a bad idea and is much higher risk (in my opinion) than betting on rising property values (and as a result increased property tax revenue) from the NorthSide project.



Yes, TIF is an economic tool and the economics should make sense. In this case I think that evaluating NorthSide is incredibly difficult as a purely economic venture. That said, property tax revenue in North St. Louis is clearly much less than it would be were development to be spurred by new infrastructure. I think this may be a case where the city needs to lead "the market." I also believe that the city stands to benefit from development adjacent to the project area - revenue that is not considered when typically evaluating the TIF.

I think redevelopment of north St. Louis on this scale is (and should be) strictly a political decision. The "market" has largely abandoned the north side of town and the Board of Aldermen will need to make decisions on (1) whether or not McKee's plan is in the City's best interest and (2) how much the City is willing to risk to implement the plan.



Once these decisions are made, the economics can be figured out. It won't be easy, but these two basic decisions will set up the framework for the ultimate project financing. For example, while the City may not want to risk its full faith and credit, it might be willing to contribute additional funds to the TIF (i.e., the 50% of sales taxes that are not statutorily captured by TIF) or make other types of public financing available (i.e., contribute a large portion of the City's New Market Tax Credit Allocation).

What I wrote earlier meant that I think the city should NOT back the TIF with general revenue and the full faith and credit. If the TIF is not backed that way, I would not be as concerned about it.



Another path for infrastructure investment would be the city's issuance of construction bonds for municipal construction of the needed improvements to lure investment in the area. City government ought to invest in the reconstruction of the area in question, but it should do so in a manner that keeps public resources public -- and accountable.

^

I guess we can conclude then that (for the most part) we all agree!



The city should NOT back the TIF with general revenue.



Unfortunately, selling the bonds without this back-up for a plan of this scale is going to be extremely hard, if not impossible.

I would like to see this project happen. However, I think the city should be the entity designing a master plan for North St. louis, not a single developer.



Once the city decides which way to go, they can now ask several developers for proposals. Could McKee be one of them? Sure.



This project seems of too large a scale for one developer. We are talking about $ 6.3 billion dollars in debt and $ 1.7 billion in equity. Where is McKee going to find $ 1.7 billion? And then he still needs to finance another $ 6.3 billion? I realize we are talking about a very long-term project, but still.



I guess time will tell.

The Count wrote:I would like to see this project happen. However, I think the city should be the entity designing a master plan for North St. louis, not a single developer.



Once the city decides which way to go, they can now ask several developers for proposals. Could McKee be one of them? Sure.

Does the city have the capability to create a master plan? I'd be content if the city had a skilled urban planner to help shape the master plan.

The Count wrote:This project seems of too large a scale for one developer. We are talking about $ 6.3 billion dollars in debt and $ 1.7 billion in equity. Where is McKee going to find $ 1.7 billion? And then he still needs to finance another $ 6.3 billion? I realize we are talking about a very long-term project, but still.



I guess time will tell.

Smart phasing plans

Does the city have the capability to create a master plan? I'd be content if the city had a skilled urban planner to help shape the master plan.

That's a good point. Does anybody here have more information?

Smart phasing plans

Easier said than done.

innov8ion wrote:

The Count wrote:I would like to see this project happen. However, I think the city should be the entity designing a master plan for North St. louis, not a single developer.



Once the city decides which way to go, they can now ask several developers for proposals. Could McKee be one of them? Sure.

Does the city have the capability to create a master plan? I'd be content if the city had a skilled urban planner to help shape the master plan.

You mean like THIS guy?

The Count wrote:I would like to see this project happen. However, I think the city should be the entity designing a master plan for North St. louis, not a single developer.

Right, and I wish to one day own the Foreigner Belt in that sweet Aqua Teen Hunger Force episode.



Point is, the city lacks almost all of the necessary foresight, leadership, revenue, planning, etc. to make this project happen stand alone, hence the void Paul McKee Jr. is now operating within. At best, you could hope for the city to try and "guide" McKee's plan with some semblance of oversight, maybe. However, I doubt that will happen as the city has backed itself into a corner; in order for large scale redevelopment to work (maybe incorrectly), private oversight and investment is the only option in the city of St. Louis.

^^



It would be nice to see our Canadian friend back in the Lou.

Right, and I wish to one day own the Foreigner Belt in that sweet Aqua Teen Hunger Force episode.



Point is, the city lacks almost all of the necessary foresight, leadership, revenue, planning, etc. to make this project happen stand alone, hence the void Paul McKee Jr. is now operating within. At best, you could hope for the city to try and "guide" McKee's plan with some semblance of oversight, maybe. However, I doubt that will happen as the city has backed itself into a corner; in order for large scale redevelopment to work (maybe incorrectly), private oversight and investment is the only option in the city of St. Louis.

What would you suggest we do? (How) should we go forward with this project?

The Count wrote:^^



It would be nice to see our Canadian friend back in the Lou.

Right, and I wish to one day own the Foreigner Belt in that sweet Aqua Teen Hunger Force episode.



Point is, the city lacks almost all of the necessary foresight, leadership, revenue, planning, etc. to make this project happen stand alone, hence the void Paul McKee Jr. is now operating within. At best, you could hope for the city to try and "guide" McKee's plan with some semblance of oversight, maybe. However, I doubt that will happen as the city has backed itself into a corner; in order for large scale redevelopment to work (maybe incorrectly), private oversight and investment is the only option in the city of St. Louis.

What would you suggest we do? (How) should we go forward with this project?

I've already played that game; all you have to do is search through the Blairmont threads. About the only thing left is for the people of this forum to all become staffers down on Market St, that is if you support the current regime.

OK cranky, I am sorry I asked.

I prefer surly. My point was that I've ranted enough on that subject and I didn't want to bore everyone again with my diatribe. I'm sorry if that came across cranky. Sorry again.

No problemo.



I guess I'll have to struggle my way through that enormous Blairmont thread again.

The Count wrote:It would be nice to see our Canadian friend back in the Lou.

If the Director of Planning and Urban Design had real statutory power, sure, that would be great.

ecoabsence wrote:

The Count wrote:It would be nice to see our Canadian friend back in the Lou.

If the Director of Planning and Urban Design had real statutory power, sure, that would be great.

True.



It seems that our small-city politics will continue to hold us back. It's an excellent observation that McKee is only able to do what he has done and propose the NorthSide project because of the utter void in competence within the city.