Easy Money

Developers like the Sansone Group are using a state law to rake in millions of tax dollars for retail projects in the burbs. Trouble is, the legislation was designed to help blighted inner cities.

Mello, a former Ferguson city manager, is a director of the Missouri Tax Increment Financing Association, a group dedicated to the use of the state statute to its legal limits. As a lawyer who specializes in municipal issues, he bristles at the idea that TIF is being misapplied in this case. "I think you really got to look not at the tool that's being used," says Mello, "but the public purpose of trying to maintain your economic base and strengthen it. Sometimes it is a public-private partnership that has to be used to accomplish that."

Nothing in the law now precludes a city from annexing a proposed TIF district. Nor does the statute prohibit a municipality from subsequently using dynamite to blow away hillsides that stand in the way of economic progress. But is this what the law intended? Salsich, the law professor, issues a caveat in this respect. "My question is (whether) the area is blighted," he says. "There is nothing wrong with the idea itself. You're basically using the taxes to pay for infrastructure in that spot. But, if it gets misused, you're not accomplishing your purpose."

By rearranging the geological structure of the area, Fenton has laid rightful claim to the regional frontier of TIF development.

In the inner-ring suburbs of St. Louis County, TIF subsidies are used for another questionable purpose, the buyout of homeowners at exorbitant prices. The law allows for the artificial inflation of property values at taxpayers' expense. By manipulating residential-real-estate market forces, TIF creates a different kind of upheaval -- the displacement of human populations. The proposed project in Olivette is a good example of this unacknowledged diaspora.

According to plan, Chickasaw Drive is crumbling a little bit at a time, like the chink in the pavement under the front left tire of Irv Zeid's red Toyota.

In 1956, when the street was new, Zeid and his family moved into their ranch-style home in Arrowhead Park, shortly after the Olivette subdivision opened. In those days, he commuted to work at the family-owned furniture and clothing store in North St. Louis. At home, his wife and he raised two sons, who attended nearby Hilltop Elementary School. The school acted as a common bond for residents of the neighborhood, and Zeid became more involved in the community as a subdivision trustee. Later, he ran successfully for a seat on the city council. The license plates on his Toyota identify him as Mayor Z, in honor of his one-year term as municipal leader between 1975 and 1976.

At 70 years of age, Zeid looks back on his civic career with pride. He has served on every conceivable municipal board or panel, and confronted an array of local issues, from annexations to potholes. "I still have a constituency," he says, seated in the dinette of his Arrowhead Park residence. The half-drawn drapes allow natural light to filter through a cracked picture window. In the living room, oversized ceramic lamps harken back to an earlier suburban era, as does the chandelier, which resembles an inverted space-age menorah. Mayor Z, as he refers to himself, says he would like to buy new carpeting and furniture and replace the gutter and rotting fascia on the front of the residence. He would like to fix up the house, but his plans for renovating have been put on hold for nearly two years.

It's not altogether clear how long Mayor Z's self-proclaimed constituency will remain intact, either. Like those of his neighbors throughout Arrowhead Park, Zeid's life is in limbo; the same uncertainty faces residents of the adjacent subdivisions of Hilltop Woods and Fairlight Downs.

As he explains his predicament, he leans his elbows on the pile of newspapers on top of the dinette table and describes how the stress has taken its toll. For more than an hour, a half-filled cup of black coffee is left untouched as he continues to talk. The man sitting at the dinette table looks older than the one in the family portrait on the wall. With each new tale, it becomes more evident that Mayor Z, in his current role of subdivision trustee, is facing the most disturbing quandary of his political career.

"It's made me sick to my stomach," says Zeid. "I've now got a spastic colon. From day to day, it can cause me a lot of problems."

Zeid, who has devoted a lifetime to his community, now favors wiping his neighborhood off the map, including his own house. He is not alone. His views are shared by the vast majority of the nearly 300 homeowners located on an 85-acre tract of land north of Olive Boulevard between Interstate 170 and Price Road. All of these residents have been persuaded to sell their homes because the TIF subsidy allows the developer the luxury of buying the property at prices far above the going rate.

As in Fenton, the Olivette development is being driven by Sansone Group -- in this case, through a partnership with THF Realty. The proposal includes building a Wal-Mart, Sam's Wholesale Club, Shop 'N Save and a Lowe's or Home Depot.

Last month, the city finally signed a memorandum of understanding with the developer to permit up to $38.9 million in TIF financing for the proposed Wal-Mart project, which has a total projected cost of between $107 to $111 million. In other words, more than a third of this private development will be financed with public funding. The Olivette TIF Commission will next meet on June 9 to consider approving the proposal.

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