Opponents see nothing to celebrate in new mall

DES PERES, Mo. -- When West County Center opened in Des Peres in 1969, it adopted as a symbol a sign of peace: a dove.

But suburban growth in the 21st century -- and the recent $237 million expansion of the shopping plaza -- has been fractious.

At the center of the battle is a development tool called tax increment financing -- TIF for short. West County's expansion got a $29.8 million subsidy through TIF and it sparked a legal battle that went to the Missouri Supreme Court.

Des Peres won the case, but opponents continue to use it as an example of one of the worst abuses of a law designed to help restore blighted areas. West County's grandiose opening last week brings the issue front and center again.

Lawmakers created the tax break in 1982. Under the TIF law, a municipality or county can help finance some construction costs by diverting the future sales and property tax revenue of a project for up to 23 years. Instead of the new tax dollars going, for example, to schools, fire stations or the city's street department, the money is used to retire the debt on bonds sold to pay for the development.

Last year, $23.8 million in sales and property taxes was diverted from St. Louis County communities to pay for dozens of TIF projects, according to county figures.

Such financing has turned abandoned industrial sites, empty schools and shuttered storefronts into groceries, apartment complexes and bustling shopping centers. But the TIF guidelines are so loosely defined that suburban officials have used TIFs to subsidize strip malls on flood-prone farmland in Chesterfield Valley and raze neighborhoods like Meacham Park in Kirkwood in favor of Wal-Mart and other retail giants.

Using TIFs to build upscale malls in well-to-do suburbs, like the West County Center project, is considered among the worst TIF abuses by people like June Scheve, of Jennings. She says Des Peres is "cheating." TIFs should be used to draw developers into poorer, inner-ring suburbs, she said.

Scheve is a member of Metropolitan Congregations United. She plans to take busloads of activists next year to Jefferson City to ask lawmakers to rein in TIFs.

The owners of rival Chesterfield Mall and several local residents sued the city of Des Peres after it approved a TIF in 1997 to expand West County Center. They argued that the city improperly "blighted" the mall.

But as Des Peres city administrator Doug Harms says, the definition of blight in the state statutes is not the same as in the dictionary. The city argued that the TIF area doesn't have to be run down and dilapidated. Instead, "blight" could be an aging, 1970s-era mall that is overshadowed by newer and larger shopping centers.

"The mall would have limped along for a few more years" without the TIF, said real-estate consultant Richard Ward of Development Strategies, who served as an expert witness on the case for Des Peres. The Missouri Supreme Court agreed.

TIFs are not only a development tool, but also a weapon that municipalities use to compete with each other to attract businesses and tax dollars.

The competition is even more meaningful to Des Peres and 15 other municipalities in the county that do not levy a city property tax and rely mostly on sales taxes to fund services.

West County Center functions as the Main Street business district in Des Peres. But since the mid-1980s, the economic engine at West County Center sputtered along as Chesterfield Mall, the Galleria and other, newer shopping centers began to dominate the market.

Des Peres officials used the TIF law to help pay for some of the construction costs and a parking garage.

The mall's owners, Westfield America Trust, refused to take on the project without government help. Westfield's Australian-based parent company has $31.5 billion in assets, including 109 shopping centers in four countries.

West County Center now is twice its original size, with Nordstrom and Lord & Taylor joining original anchor tenants Famous-Barr and J.C. Penney. The center is expected to triple its sales and add an extra $1 million a year in sales tax revenue to Des Peres' coffers.

Mayor Rick Lahr said the tax windfall will help pay for a new $25 million community center, allow the city to maintain free trash service and keep his town property-tax free. (Other taxing jurisdictions, such as St. Louis County and zoo, fire, sewer and school districts levy property taxes on Des Peres residents.) "It's a demonstration of a public-private partnership that can work and did work," Lahr said.

But the competition for sales taxes among suburban communities troubles regional planners and economists. Many believe TIFs simply shift retail tax dollars from one area to another instead of creating real economic growth.

Unions, like the United Food and Commercial Workers, also are speaking out against the low-paying jobs that come with some subsidized development projects.

This summer, about 25 union grocery workers helped a group of Maplewood residents opposed to a Wal-Mart shopping center circulate petitions in the city. That forced referendums on two ordinances related to the project.