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.

Reaping TIF benefits is but the latest good fortune to befall Sansone, whose financial affairs have flourished in the gray realm where private interests and public policy come together. Over the years, newspaper accounts have alleged a litany of improprieties from which Sansone Sr.'s business interests have reportedly profited. Many of the accounts contain references to associations with political and organized-crime figures.

For instance, in 1964, Sansone acted as campaign manager for his business partner, Alfonso J. Cervantes, who successfully ran for mayor of St. Louis that year.

Once in office, Cervantes named Sansone Sr.'s brother to the influential post of city assessor. Prior to this appointment, Joseph C. Sansone was a partner with Anthony Sansone Sr. in the family's real-estate business. By 1967, Sansone Realty Co., then located at 4705 Hampton Ave., had its property taxes rolled back by more than 50 percent, according to a story in the St. Louis Globe-Democrat.

A 1970 Life magazine story, by former Globe-Democrat reporter Denny Walsh, focused national attention on Cervantes' relationship with Sansone Sr. The story told, among other things, how Sansone arranged a 1964 campaign-strategy session between his father-in-law, Jimmie Michaels, then head of the Syrian organized-crime faction in St. Louis, and Cervantes. After Cervantes won the mayoral primary, the Life story reported that Sansone Sr. later attended another strategy meeting with Michaels and Anthony "Tony G" Giordano, then the leader of the St. Louis Mafia. After publication of the Life story, Sansone denied in news accounts that the meetings took place.

Sansone's associations drew additional scrutiny in 1972, when he appeared as a witness in a federal anti-racketeering trial in Los Angeles. Under oath, he testified that in 1967 he had withdrawn a $150,000 investment in the Frontier Casino in Las Vegas, after being notified he would be required to apply for a Nevada gaming license. Federal prosecutors had alleged that Mafiosi in St. Louis and Detroit were trying to gain illegal control of the casino. Sansone, the prosecutors alleged, traveled to Las Vegas with Giordano to make the investment. Sansone denied the charge but testified that he was acquainted with Giordano through family ties.

With the passage of time, however, these eyebrow-raising headlines have been mostly forgotten, and the Sansone Group, as it is now known, goes about its business with little publicity. News stories that chronicle TIF projects are buried in the business section of the daily newspaper or relegated to the pages of the neighborhood weeklies. At the same time, the abuse of TIF keeps pressing the envelope of legality.

In Hazelwood, Sansone is involved in the redevelopment of the Elm Grove Plaza on Lindbergh. The proposal includes the demolition of 10 houses, with a TIF subsidy of $2.5 million on a $12 million project. In Eureka, Sansone has teamed up with Prime Retail Inc. and is set to begin building an outlet mall with a $35 million TIF subsidy. In Rock Hill, Sansone has been given the go-ahead for a 25-acre development at the intersection of Manchester and McKnight roads. The proposed $24 million mixed-use TIF project would raze 125 middle-income housing units and replace the existing neighborhood with a strip mall and luxury condominiums costing from $200,000-$300,000 each.

"Development is our business," says Doug Sansone, a spokesman for Sansone Group. He declined any further comment, saying that members of the family-controlled company didn't want to be quoted for fear that they would be portrayed in a negative light.

Space exists at a premium in the retail-development world, a world measured in dollars per square foot. "Big box," "mega mall," "power center" and "category killer" are all part of the real-estate jargon that describes the alterations that society is undergoing to fit the expansion of the market economy into the next millennium.

It is a change that should be catered to rather than resisted, in the opinion of Mello, the TIF attorney. Mello cites the Promenade on Brentwood -- another Sansone development -- as an example of the appropriate use of TIF. The city of Brentwood paid him $150 an hour to be its legal adviser for the project. His legal fees were reimbursed by TIF.

In Mello's view, Evans Place, the now-defunct black neighborhood in Brentwood, represented the problem, and building a Target store at the location became the solution. The process involved the demolition of more than 100 houses and the displacement of hundreds of people, but because the residents agreed to sell their homes -- at above market value -- Mello asserts that it is an unequivocal sign that they all moved away of their own volition. The attorney even intimates that the residents initially lobbied the city for a buyout and hatched the redevelopment scheme themselves by making overtures to the real-estate agent.

"I don't think you're hearing them complaining," says Mello of the former Evans Place residents, who were paid an average of $140,000 for their homes. "Those people were completely surrounded and cut off by industrial (property). You've got an island. They (Brentwood) solved that issue for those residents by doing a TIF and putting it to better use. It's a win-win situation."

In Brentwood, Sansone Group teamed up with Orix Corp., a Japanese developer. The project received $27 million in TIF subsidies. More than $13 million of the TIF went toward land acquisition, with the city of Brentwood receiving $1 million for property it owned in the redevelopment area. The St. Louis County assessor's office has lost or misplaced 21 property-record cards for the Evans Place subdivision, making it difficult to now determine the former ownership of all of the parcels.

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