The modest shotgun house at 5219 Daggett Avenue in the city’s Hill neighborhood has already come down. Work has started on a 2,400-square-foot home with three bedrooms and three-and-a-half bathrooms.
The builder plans to market it for $475,000.
If a bill pending before the Board of Aldermen ultimately passes, whoever buys the property won’t have to pay property taxes on the improvements for five years. The old tax bill, which covered a house that sold for just $85,000, will be all they have to worry about.
But that’s not what the city commission in charge of reviewing requests for tax abatement recommended. The city’s Land Clearance for Redevelopment Authority (LCRA) voted in May to recommend the project receive no tax break, citing the “strength of the surrounding housing market.â€
As Joe Vollmer, the 10th Ward alderman who represents the Hill and introduced the ordinance granting the five-year tax break, notes: “It’s a recommendation, not a command.â€
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If the city hopes to , it’s going to need buy-in from the city’s 28 aldermen, each of whom holds considerable sway over what happens in their wards and whether developers receive tax abatements, one of the city’s most common development incentives.
Much of the pressure to cut back on abatements has built over the last year, after . That same report noted the quirk of St. Louis’ government structure giving aldermen such a big say in tax abatement decisions.
“St. Louis’ significant reliance on Alderman involvement in the process is outside of the norm,†the report states. “It is notable that the City allows abatements for any Board of Aldermen-approved property.â€
After that report, and in response to and the city’s budgetary struggles, in stable neighborhoods.
But even when the LCRA says neighborhoods are strong enough to develop without tax abatement, it has still declared property, like the Daggett Avenue house, “blighted.†Under state law, that’s a critical step before aldermen pass legislation authorizing tax abatement.
“We do that just in case the alderman would still like to move forward with it,†said LCRA Executive Director Otis Williams, after a meeting where the board recommended no tax abatement for another homebuilding project yet still blighted the property — another Vollmer request, also on Daggett Avenue. “At the end of the day, we don’t approve it here.â€
Still, LCRA board members expressed their displeasure during recent meetings over requests from Vollmer, who has forwarded three 10-year tax abatement proposals for new houses to the board in recent months. The board has also asked recently for LCRA staff to keep tabs on aldermanic bills dealing with properties they’ve said shouldn’t be abated.
“I’d like to stop seeing these come before us,†LCRA Commissioner Matthew McBride said during the board’s July meeting, noting that Vollmer had introduced five-year tax abatement legislation for the 5219 Daggett property despite the board’s recommendation.
“It will be noted in the Board (of Aldermen) bill that LCRA and probably the planning commission voted against tax abatement,†offered Dale Ruthsatz, part of LCRA’s staff.
“Let’s not throw the alderman under the bus,†Williams chimed in.
Glenn Burleigh, a member of advocacy group Team TIF, which follows city incentive use, was incredulous that the LCRA still blighted the property.
“They talked amongst themselves about how Alderman Vollmer regularly ignores (LCRA recommendations),†he said. “Why in the world did LCRA pass it? If they knew that’s what was going to happen, then why in the world would you enable such activities?â€
‘The rules they give me’
Vollmer, though, says the city’s economic development office has shifted policy without letting him know. No one from LCRA told him they didn’t want tax abatement on single-family houses in the Hill anymore.
“They changed the rules of the game without telling the players,†Vollmer said.
The LCRA board has recommended five-year abatements in the neighborhood as recently as December, and Vollmer was able to pass a bill approving the incentive this spring. Two of Vollmer’s recent requests have received LCRA votes recommending against abatement, but he says the builders and homebuyers behind the projects have been planning them for close to a year and it’s not fair to yank away an incentive they were counting on.
“A lot of these projects started way before they tightened things up,†Vollmer said. “These are not rich people. ÁñÁ«ÊÓƵ want to stay in an area where there parents grew up. I’m not dealing with millionaires.â€
Vollmer isn’t the only one who has recommended higher tax abatements now that the LCRA is recommending lower breaks. Alderman Joe Vaccaro, 23rd Ward, got a 10-year tax abatement bill passed last month for improvements planned on a Watson Road office building. LCRA had recommended five years because the neighborhood is stable. Vaccaro noted the business owners originally asked for 15 years of abatement.
The business, Sub Zero Gear, which sells sports bottles, coffee mugs and coolers through various retailers, planned to double its staff to about 14 people and invest $200,000 into a building it bought for $379,000. Vaccaro said he hasn’t asked for tax abatements in years because it’s often “a stretch to say something’s blighted†in his southwest St. Louis ward.
“I just felt it was the right thing to do, keeping a business in the city,†Vaccaro said. “This was a pretty rare exception.â€
Sarah Coffin, a St. Louis University professor of urban planning who worked on the city’s incentive report, said there appears to be sincere attempts to develop guidelines limiting incentives in places where they aren’t needed. But, she said, “we were worried this is what was going to end up happening.â€
“It’s really difficult because of the structure of our government,†she said. “The mayor can come down and say, ‘This is what we’re gonna do.’ And the aldermen can say, ‘No we’re not.’ … Because we’ve politicized the process for so many decades, we’ve lost sight of the fact that this is an investment of people’s dollars.â€
Some aldermen appear to be open to LCRA recommendations, and even Vollmer has reduced abatement time on projects after the board weighed in. Alderman Stephen Conway, whose 8th Ward includes the affluent Shaw neighborhood, is still forwarding constituent requests for property tax breaks. But in recent correspondence with the LCRA, he has suggested he’ll defer to its recommendations.
“This project has my support,†Conway wrote to LCRA staff regarding a $170,000 rehab on Russell Boulevard that the owner plans to market for $315,000. “Let’s see what commission says on length.â€
Vollmer, though, says there are still two or three abatement bills he plans on trying to get through the Board of Aldermen. He’ll make the same pitch to his colleagues: the projects have been in the works for months, and it’s unfair to pull an incentive they were counting on. If his colleagues disapprove, he’ll tell the constituents who come to him for abatement that he can’t guarantee the tax breaks anymore.
“I’ll play by the rules they give me,†Vollmer said.
Alderman Joe Roddy, 17th Ward, who heads the committee that often reviews development incentives and is , admits his challenge is that central corridor neighborhoods he represents “used those tools pretty aggressively.†But he said he is trying to wean his neighborhoods off and lead by example, and he hopes the new guidelines, when they’re finished, can keep aldermen “somewhat insulated from the politics of it.â€
In the meantime, it can be difficult to oppose projects in other members’ wards.
Last month, Roddy held up a bill in his committee carried by 6th Ward Alderman Christine Ingrassia. Ingrassia wanted tax abatement for the new Charleville Brewing Co. & Tavern restaurant on Chouteau Avenue. Roddy was upset that she had voted against projects in his ward.
Asked about Vollmer’s requests, and the fact that the LCRA is still blighting properties despite recommending against abatements, Roddy chose his words carefully: “That’s a valid concern.â€