Particularly in downtown and the eastern central corridor as a whole, I would prefer density and good, mixed use, urban form with a tax break. Especially in important and high profile locations like along Wash Ave.
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Agree on higher density. This can lead to a whole range of better public benefits and often might be worth subsidizing.
I wish we could get decent incentive standards put in place because they can be very useful if not used corruptly by Alderpersons.
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I wish we could get decent incentive standards put in place because they can be very useful if not used corruptly by Alderpersons.
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^ I'd like to see a scenario where the whole North RIverfront and Chouteau's Landing were given tax abatement to encourage high rise development. I think the city also needs a tax abatement policy specifically to encourage high density TOD near transit stations. The lack of development around the Union Station stop is mind boggling. There is literally a sea of parking down there. Maybe St. Louis needs a parking lot tax to encourage redevelopment and better land use.
If a request for tax incentives on a good project can actually pass the "but-for" test with real hard and soft costs submitted and reviewed and a reasonable developer fee, I have never had an issue with using abatement or TIF to make a project that will contribute to the good of the City and potentially spur further investment in an area viable. It's the abuse to pad developer profit with public money that is problematic. On a case by case basis there may need to be some affordability inclusion or contribution that the incentive can help make happen. Depends on the proposal and location.
The sandbox that I mostly play in these days is federally subsidized affordable and in occasional cases market-rate (but still relatively affordable) housing, and there are rigorous budget reviews, and strict caps on developer and GC overhead and profit lines when using HUD funds. That's what should be expected when using public dollars to lower developer risk. I've been on the developer, government, and now GC side of things, and while the layers of rules and regulations don't make it easy, they almost all exist because people screwed things up. That's the same thing that is going to have to happen to any program that SLDC administers. Abatement, TIF, sales tax exemption, etc. shouldn't go away, but incentives need to be used only to the maximum extent necessary.
So with that said, if an 80% ten year tax-abatement makes a well designed larger project that contributes to the betterment and urbanity of the City work financially on a site that makes sense for it when it otherwise wouldn't pencil out, I would be generally for it. But no one cares what I think anyway.
The sandbox that I mostly play in these days is federally subsidized affordable and in occasional cases market-rate (but still relatively affordable) housing, and there are rigorous budget reviews, and strict caps on developer and GC overhead and profit lines when using HUD funds. That's what should be expected when using public dollars to lower developer risk. I've been on the developer, government, and now GC side of things, and while the layers of rules and regulations don't make it easy, they almost all exist because people screwed things up. That's the same thing that is going to have to happen to any program that SLDC administers. Abatement, TIF, sales tax exemption, etc. shouldn't go away, but incentives need to be used only to the maximum extent necessary.
So with that said, if an 80% ten year tax-abatement makes a well designed larger project that contributes to the betterment and urbanity of the City work financially on a site that makes sense for it when it otherwise wouldn't pencil out, I would be generally for it. But no one cares what I think anyway.
I think the problem we have had in St. Louis is that there seems to be a disconnect between incentives and neighborhood vision. The city has not created a great, visionary plan and then used incentives to entice developers to make this vision happen. I see other cities create models and plans on how they want their downtown skylines or certain neighborhoods look in 10 years, then they work with private developers and public agencies to bring that vision to light.MattnSTL wrote: ↑Jun 13, 2022If a request for tax incentives on a good project can actually pass the "but-for" test with real hard and soft costs submitted and reviewed and a reasonable developer fee, I have never had an issue with using abatement or TIF to make a project that will contribute to the good of the City and potentially spur further investment in an area viable. It's the abuse to pad developer profit with public money that is problematic. On a case by case basis there may need to be some affordability inclusion or contribution that the incentive can help make happen. Depends on the proposal and location.
The sandbox that I mostly play in these days is federally subsidized affordable and in occasional cases market-rate (but still relatively affordable) housing, and there are rigorous budget reviews, and strict caps on developer and GC overhead and profit lines when using HUD funds. That's what should be expected when using public dollars to lower developer risk. I've been on the developer, government, and now GC side of things, and while the layers of rules and regulations don't make it easy, they almost all exist because people screwed things up. That's the same thing that is going to have to happen to any program that SLDC administers. Abatement, TIF, sales tax exemption, etc. shouldn't go away, but incentives need to be used only to the maximum extent necessary.
So with that said, if an 80% ten year tax-abatement makes a well designed larger project that contributes to the betterment and urbanity of the City work financially on a site that makes sense for it when it otherwise wouldn't pencil out, I would be generally for it. But no one cares what I think anyway.
Looks like I added a decade up there. Here's 3 decadesKingb4 wrote: ↑Jun 13, 2022The original project would have been $23m. The 32-unit project would be $5m.quincunx wrote: ↑Jun 13, 2022Sounds like the abatement would pay off. Over 30? years.. What are the relative value of the buildings? Assuming equal per unit value.
0.2+1+1+1 = 3.2 plus increment in earnings taxes from construction workers plus 2.72x sales taxes (assuming same sales per sq ft)
0.25+0.25+0.25+0.25 = 1
22/5 = 4.4
4.4 * 20% = 0.88
124 units = 0.88+ 4.4 +4.4 = 9.68
32 units = 1 + 1 + 1 = 3
3.23 times the productivity in property taxes (assuming the assessor assess at commensurate amounts). Additional earnings taxes from construction workers, additional sales taxes from more retail square feet, assuming it's not all cannibalized from elsewhere in the city, more wealth saved and potentially circulating within the area due to less driving, etc.
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I've always thought this issue/question would be better served with a bigger picture solution in terms of an "incentive map" that has zones that offer specific levels of incentive for areas of interest, type (think tech sector or geospatial), or even just to outline areas that shouldn't need incentives.
You could even have specific incentives for high visibility lots, small business areas on the north-side, restaurants, or even startups bonuses that have special incentives that for job growth.
Obviously these are all just ideas, but making it visible and accessible for developers seems like a better solution, imho? (FWIW: I'm not a policy maker or urban planner, lol)
You could even have specific incentives for high visibility lots, small business areas on the north-side, restaurants, or even startups bonuses that have special incentives that for job growth.
Obviously these are all just ideas, but making it visible and accessible for developers seems like a better solution, imho? (FWIW: I'm not a policy maker or urban planner, lol)
Density, specially in DT and DTW! City need this to continue to grow. We’re not Austin or Nashville not even close! City sometimes forget that Midwestern cities have more trouble attracting developers and young professionals. If city is making difficult for developers that want to infill surface parking lots we have the wrong people in City Hall!Kingb4 wrote:I'm a developer and recently had 4 projects in concept for sites throughout DT and DTW, but have shelved 3 of them for now. Regarding the 4th one, here's a scenario and ultimately a question for the group (as it's a real world scenario we have been penciling out for weeks):
On a prominent corner, we have an opportunity to infill a surface parking lot. Our original concept was for 124 units over 5 stories (4 floors of stick over concrete podium) and 6,800 SQ FT of retail with strong amenity package. As the cost to secure tax abatements has risen, we started looking at what it would look like to build this with no incentives, which lowers hard costs without comitting to prevailing wage, WMBE, AMI restrictions, contributions to AHT, etc... Ultimately, the return on cost (year 1 untrended NOI / total development cost) proved this was just not financeable. However, building 32 units, 3 stories, surface parked behind, with about 2,500 SQ FT of retail with few amenities could work with no incentives.
So the question is, if you had to choose, would you prefer to see more density with subsidy (at least an 80% abatement for 10 years), or less density without any subsidy.
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Agreedframer wrote:I vote for higher density with (reasonable) tax breaks.
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This is one of the biggest issues in this city, we need to change something so that parking lots are not low-maintenance/high profit pieces of property that landowners can just sit on and rake in cash. Building something should be more profitable than pavement, I'm not sure what we need to do to make that happen whether it's making running a surface lot more costly and more of a hassle or incentives for constructing new buildings or a combination of both and/or anything else.Kingb4 wrote: ↑Jun 13, 2022...It's expensive AF to buy parking lots...
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Math for the win! Well done Quincunx!quincunx wrote: ↑Jun 13, 20223.23 times the productivity in property taxes (assuming the assessor assess at commensurate amounts). Additional earnings taxes from construction workers, additional sales taxes from more retail square feet, assuming it's not all cannibalized from elsewhere in the city, more wealth saved and potentially circulating within the area due to less driving, etc.
Land Value Tax. More specifically, increase the portion of the real estate tax based on the value of the land and decrease or eliminate the portion of the tax on improvements. Limit TIFs/TAs to the improvements portion. Lots of different ways this could be calibrated depending on the policy goals, but the point is to make it prohibitively expensive to buy for speculation or other low-productivity purposes._nomad_ wrote: ↑Jun 13, 2022This is one of the biggest issues in this city, we need to change something so that parking lots are not low-maintenance/high profit pieces of property that landowners can just sit on and rake in cash. Building something should be more profitable than pavement, I'm not sure what we need to do to make that happen whether it's making running a surface lot more costly and more of a hassle or incentives for constructing new buildings or a combination of both and/or anything else.Kingb4 wrote: ↑Jun 13, 2022...It's expensive AF to buy parking lots...
Of course, this would require approval from the morons at the MO General Assembly. On the plus side, it is/was a hobby horse of a certain libertarian billionaire (?) who funds the MO GOP, so maybe it is politically possible if anyone really wanted to pursue it.
What I'm skeptical of is that the subsidized development would be proper TOD. I realize there's parking minimums but those can be waived (virtually every development involves variances). If a developer were proposing an apartment building where just 75% of units got built-in parking spots I would be willing to listen. But few if any developments are built that way, and considering how expensive structured parking is to build, one could argue that's where the tax abatements are going.goat314 wrote: ↑Jun 13, 2022^ I'd like to see a scenario where the whole North RIverfront and Chouteau's Landing were given tax abatement to encourage high rise development. I think the city also needs a tax abatement policy specifically to encourage high density TOD near transit stations. The lack of development around the Union Station stop is mind boggling. There is literally a sea of parking down there. Maybe St. Louis needs a parking lot tax to encourage redevelopment and better land use.
And even though St. Louis is a car centric city, in my experience it's rare that 100% of tenants have cars. Some of that parking almost always goes to waste, and I know that many of the older apartment buildings in the CWE/Debaliviere do not offer parking to all residents and seem to do fine with leasing.
Ald Cohn filed BB 64 to change policies and procedures regarding development proposals.
https://www.stlouis-mo.gov/government/c ... BBId=14076
https://www.stlouis-mo.gov/government/c ... BBId=14076
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I was just explaining to someone why I thought there were so many residential multi-fam projects popping up in the city (who thought it was crazy), and I thought I'd bullet those reasons out here and see if anyone has any to add? or any to dispute?
- Housing Supply Shortage (LINKY) is generating demand and also pushing people into multi-fam apartments.
- South City housing supply renovating multifams to single fams is reducing supply.
- Inner Ring of the County is not building housing even though there is desired interest (with the exception of Ucity/Clayton) and sometimes NIMBY turning them down (i.e. Webster Groves project). Ucity also demolishing housing (see Costco Project). (of note: Sprawling cities like Chesterfield are building housing)
- Increased interest in Millennials and Gen Z living in the city mixed with the reversal of the rate of urban sprawl across the nation (finally coming to STL?).
- City amenities (MLS, Parks, GRG, Neighborhood improvement, etc) are possibly reaching a tipping point on perceived negatives of city-living (crime, schools, etc).
- Northside still bleeding residents - some of those residents move south and central corridor, shrinking supply.
- Perceived brand of the city (in my opinion) is improving as city pride, neighborhood pride, park pride seems to be growing... and as such, the desire to live by them.
- Remote workers looking for affordability shifted a lot of big city to rust belt cities, like STL.
- Not really a reason, but a result of the reasons - I've been told that the desired interest in the city on apps like Zillow/RedFin and other apps has been increasing for 'city locations' pretty dramatically over the past few decades and decreasing for the county.
- Current finished projects in the city are filling up quickly and holding vacancy rates with waiting lists in some situations.
- Housing Supply Shortage (LINKY) is generating demand and also pushing people into multi-fam apartments.
- South City housing supply renovating multifams to single fams is reducing supply.
- Inner Ring of the County is not building housing even though there is desired interest (with the exception of Ucity/Clayton) and sometimes NIMBY turning them down (i.e. Webster Groves project). Ucity also demolishing housing (see Costco Project). (of note: Sprawling cities like Chesterfield are building housing)
- Increased interest in Millennials and Gen Z living in the city mixed with the reversal of the rate of urban sprawl across the nation (finally coming to STL?).
- City amenities (MLS, Parks, GRG, Neighborhood improvement, etc) are possibly reaching a tipping point on perceived negatives of city-living (crime, schools, etc).
- Northside still bleeding residents - some of those residents move south and central corridor, shrinking supply.
- Perceived brand of the city (in my opinion) is improving as city pride, neighborhood pride, park pride seems to be growing... and as such, the desire to live by them.
- Remote workers looking for affordability shifted a lot of big city to rust belt cities, like STL.
- Not really a reason, but a result of the reasons - I've been told that the desired interest in the city on apps like Zillow/RedFin and other apps has been increasing for 'city locations' pretty dramatically over the past few decades and decreasing for the county.
- Current finished projects in the city are filling up quickly and holding vacancy rates with waiting lists in some situations.
My percentages may be slightly off, but in the 2020 Census the Central Corridor neighborhoods grew at a combined ~13%. Roughly the same as St. Charles County overall. The South Side lost ~2% and has largely stabilized. While the North Side bled ~23%. Population loss is uneven across St. Louis and people unfamiliar with the city seem to think it's even across the board when that couldn't be further from the truth.
People are moving to where these projects are happening. The projects themselves are proof of that and the people building these developments have done their homework...your average St. Louisan has not. Unfortunately there is a large contingent of people in this region (and state) that are, for lack of a better word, clueless.
(Not sure we need to have this discussion across two threads)
People are moving to where these projects are happening. The projects themselves are proof of that and the people building these developments have done their homework...your average St. Louisan has not. Unfortunately there is a large contingent of people in this region (and state) that are, for lack of a better word, clueless.
(Not sure we need to have this discussion across two threads)
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Sorry - I thought I deleted that other one after I posted it.
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https://www.riverfronttimes.com/news/ha ... e-38040796
Hartmann: Greater St. Louis Inc Needs To Ditch Its Real Estate Side Hustle
Hartmann: Greater St. Louis Inc Needs To Ditch Its Real Estate Side Hustle
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Isn't this a rehash of the same article that he wrote six or so months ago?
After nearly a century of picking winners (the edges of the region) and losers (already built places), oh no! supporting the urban core?! How dare they?!
Given the history of lack of development around stadiums in St. Louis, development around the latest stadium is a sure bet somehow?
Given the history of lack of development around stadiums in St. Louis, development around the latest stadium is a sure bet somehow?
Yes.RockChalkSTL wrote: ↑Jul 05, 2022Isn't this a rehash of the same article that he wrote six or so months ago?
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I don't think anyone takes issue with the fund existing, it should exist and it can exist as a stand alone org with its own staff.quincunx wrote: ↑Jul 05, 2022After nearly a century of picking winners (the edges of the region) and losers (already built places), oh no! supporting the urban core?! How dare they?!
Given the history of lack of development around stadiums in St. Louis, development around the latest stadium is a sure bet somehow?
Exactly. It's been 16+ years since the Cardinals stadium opened and development is far from complete around it. The Dome? Nothing! DTW is perfect for residential. Seize the momentum NOW! Other developers will follow. I have no issues with this whatsoever.quincunx wrote: ↑Jul 05, 2022After nearly a century of picking winners (the edges of the region) and losers (already built places), oh no! supporting the urban core?! How dare they?!
Given the history of lack of development around stadiums in St. Louis, development around the latest stadium is a sure bet somehow?
Hartmann sucks and I'm not going to defend him personally, but I think some of the commentary here is missing the point, which wasn't about whether focusing on "urban core" development is bad, but rather that there's a couple of conflicts of interest that undermine both organizations' authority and don't bode well of the City or the region.
First, a conflict between the GSTLI's stated mission, which is supposed to be regional beneficence, and the development fund, which I guess is focused on helping the urban core.
Second, there is an apparent conflict between GSTLI's form, which is non-profit/charitable and transparent, and that of their development fund, which is for-profit and secretive. Apparently this arrangement is unique to St. Louis.
Hartmann implies but doesn't accuse the whole endeavor of being a ruling class circle jerk, where they enrich each other/themselves under the guise of helping the community. Would anyone be surprised if that's the case? Do StL elites have a great track record of "leading" the region or the City specifically to success of any kind? I think the answer is no, based on 70 years of City decline and recent decades of regional stagnation, but they sure have helped themselves. If Hartmann's insinuation is correct then it looks like that's set to continue; same sh*t different bucket, now renamed as GSTLI and APEF LLC. Maybe some "patient capital" investment in your favorite neighborhood/pet cause justifies their continued rule, but personally I'd prefer if they stick to running their businesses, pay their taxes, and otherwise STFU.
First, a conflict between the GSTLI's stated mission, which is supposed to be regional beneficence, and the development fund, which I guess is focused on helping the urban core.
Second, there is an apparent conflict between GSTLI's form, which is non-profit/charitable and transparent, and that of their development fund, which is for-profit and secretive. Apparently this arrangement is unique to St. Louis.
Hartmann implies but doesn't accuse the whole endeavor of being a ruling class circle jerk, where they enrich each other/themselves under the guise of helping the community. Would anyone be surprised if that's the case? Do StL elites have a great track record of "leading" the region or the City specifically to success of any kind? I think the answer is no, based on 70 years of City decline and recent decades of regional stagnation, but they sure have helped themselves. If Hartmann's insinuation is correct then it looks like that's set to continue; same sh*t different bucket, now renamed as GSTLI and APEF LLC. Maybe some "patient capital" investment in your favorite neighborhood/pet cause justifies their continued rule, but personally I'd prefer if they stick to running their businesses, pay their taxes, and otherwise STFU.