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When it comes to the building of "big box" stores -- Kmart, Wal-Mart, Sam's Club, Home Depot -- with their acres of parking lots out front, it's a developer's market these days. They pick the location, and they demand millions in public subsidies from the municipality. And unless you're a Ladue or a Clayton, you bend over and assume the position.
Nothing illustrates this better than the latest proposed development in Maplewood. Like so many other cities, Maplewood (population 9,228) lives and dies by the fate of large retailers because they generate millions in sales-tax revenue. Sales taxes pump about $1.4 million into Maplewood's coffers, more than twice the revenue from property taxes. And so, like many other cities, Maplewood needs the big-box stores like a junkie needs his fix.
Marty Corcoran, a friendly, fast-talking fatherly type, knows this better than anyone else, having served as Maplewood's city manager since 1983. He has seen the city's coffers swell and shrink with the opening and closing of big-box stores, but the city's leaders have always managed "to keep our heads above water," he says. In '91, he worked with developer THF to put a Wal-Mart and Sam's Club near the intersection of Manchester Road and Big Bend Boulevard, only to see the deal fall apart when Wal-Mart bought out the Pace chain, which already had a store farther east on Manchester, inside the St. Louis city limits. In the late '90s, he put together a tax-subsidized deal to move the 36,000-square foot Shop 'n Save grocery store into a 67,000-square-foot space at 7355 Manchester Rd. That deal, he says, "was a break-even project at best," but it helped preserve Maplewood's downtown, such as it is.
In 1997, the Venture department store in Deer Creek Plaza closed after the company went bankrupt, and Corcoran scrambled to help a Kmart move into that space in November 1998. The Kmart alone pumped $400,000 a year into the city's budget, which hovered around $5.5 million. Two years later, in December 2000, Kmart closed up shop, citing lower-than-expected profits.
The closing prompted a renewed hunt for another development. Corcoran and other city officials held informal conversations with developers, went on a retreat to brainstorm, hired consultants and then made their move. "We had a severe financial crunch, and we needed to do something about it," says Corcoran. "We discussed this with the City Council. We were frank with them: We didn't have any fish on the line."
On May 23, they put out the customary request for proposals, seeking developers -- except this RFP had an unusual feature: Any chunk of the fully occupied 1.5-square-mile city was up for grabs, as long as the development brought in big bucks. Not surprisingly, two developers -- Pace Properties and THF -- proposed big-box stores in the same area: along Hanley Road, between West Bruno and Folk avenues. It's the closest Maplewood gets to Highway 40.
On July 3, the City Council picked Pace Properties' proposal -- a $60 million development that would yield a mammoth 148,000-square-foot Costco store and a 105,000-square-foot Home Depot Expo store, along with a restaurant or two, a bank and a gas station. The deal called for a $19.5 million public subsidy under the state's tax-increment-financing statute, perhaps the most abused state law in Missouri history. Crafted to cure blighted areas in inner cities by offering tax incentives, it has primarily been used to subsidize malls and other retail projects in high-rent areas in the 'burbs.
The trouble with the Pace proposal is that the 30-acre morsel in Maplewood the developer wants to chew up isn't vacant land; it contains an established working-class neighborhood of about 130 homes, along with a handful of commercial plots.
And so the predictable battle began.
Two things upset Dawn McCoy. The first was the manner in which the city gave her the bad news. "You can't just send a person a letter in the mail and say, 'We're taking your home and it's a done deal,'" she says. "You can't do that to people; it's not fair. A lousy letter in the mail?" McCoy and her husband, Ron, live in the 7800 block of quiet, tree-lined Alicia Street, where kids aren't likely to be run over by fast-moving cars.
The second thing that irked her was when Pace made its offer to buy their house for $107,000. The McCoys have five years left on their mortgage and, if forced to move, want to buy a new home outright. After several contentious meetings and exchanges, Pace has upped its offers to most property owners, saying it will pay about 2.6 times each home's appraised value on St. Louis County books. That amounts to between $150,000 and $200,000 for most homes, along with $3,000 in moving costs. The higher offers also increased the public subsidy to $25.5 million from $19.5 million.
(To complicate matters, the losing developer, THF, has been handing out sales contracts offering between $180,000 and $225,000. Some residents are apparently working with THF and its lawyer, but their purpose is unclear, given that Maplewood has designated Pace the developer. Neither THF nor the few residents are eager to talk about their plans.)
The story in the McCoys' neighborhood is playing out as it has in dozens of other St. Louis County neighborhoods erased to make way for retail projects: anger, sadness, confusion and, of course, in-fighting among the neighbors. A lot of the street talk centers around how to get the best price for a house: Sign a sales contract now for the offer on the table, or wait it out and possibly take on a court fight later? Like the sword of Damocles, the threat of the city's invoking its eminent-domain rights and taking their property hangs over the homeowners' heads.