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St. Louis MO, Developers, and TIFs
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| Contributor | Chronicler |
| Last Edited | Chronicler Nov 02, 2007 04:28pm |
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| Category | Analysis |
| Media | Newspaper - Kansas City Star |
| News Date | Saturday, October 6, 2007 10:00:00 PM UTC0:0 |
| Description | Big profit margins for some TIF projects raise questions about taxpayer support
By JEFFREY SPIVAK and LYNN HORSLEY
The Kansas City Star
Kansas City had a problem: The dying Blue Ridge Mall was turning into an eyesore along Interstate 70, one of the gateways into the city.
A real estate developer had a solution: Demolish the mall and build a new, Wal-Mart-anchored shopping center with a little help from a city development incentive known as tax increment financing, or TIF.
It was such a “win-win” situation that the project passed the City Council unanimously. But some city leaders didn’t notice that the developer, MBS Mall Investor, could achieve an 18 percent profit margin, almost double the average shopping center deal in metropolitan Kansas City.
The developer says the company needed that rate of return because it was such a risky project. But City Councilwoman Deb Hermann, who voted for the project, said the rate was a surprise to her.
“That’s not good,” Hermann said. “If they can make an 18 percent return, they don’t need all that incentive.”
The Blue Ridge Mall is one in a long string of TIF projects that show Kansas City’s approval process is often driven by developers who get good deals while taxpayers’ interests aren’t always adequately protected.
Some say these deals are worth it. At Kansas City’s Economic Development Corp., the city agency overseeing the TIF Commission, officials justify high profit margins for some TIFs like the Blue Ridge Mall because those projects boost the city in ways that can’t be quantified... |
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