Chesterfield opens the door to TIF financing in the “downtown” | Chesterfield

ByShannon J. Cortes

Jul 27, 2022

The Town of Chesterfield paved the way for landowners in the southwest quadrant of the Village of Chesterfield to use Tax Increment Financing (TIF). The area includes both the Wildhorse Village and Chesterfield Mall redevelopments.

At a special meeting on July 25, the city council approved a resolution to establish a TIF commission and provide for the appointment of its members.

When a TIF plan is adopted, the assessed value of real estate in the redevelopment area is frozen for tax purposes at the current base level, prior to the construction of improvements.

The property owner continues to pay taxes at this base level. However, as the property is improved, the taxable value increases above the base level, producing a tax increase.

The tax increment, or payments in lieu of taxes (PILOT), allows the city to allocate these funds to approved projects. Local tax districts also transfer 50% of the additional sales and utility tax revenue they collect to the trust fund. Money from the fund can then be used to pay for the costs of the redevelopment project.

Planning director Justin Wyse said the $2.5 billion development projects would strain city resources and services could be reduced without the TIF. The impact on roads, law enforcement and other infrastructure would go far beyond the proximity of the development, he said.

Any district funding would be strictly for public infrastructure such as streets, sidewalks, sewer and water, and public parking structures, Wyse noted.

“There is no intention to create development incentives or subsidies,” he said. “This is not a tax relief, the promoter of the property continues to pay taxes.

Late last year, the city entered into an agreement with consultant PGAV Planners LLC to explore options for economic development tools. After it was determined that the redevelopment areas qualified under the state of Missouri’s legal definition of “blight”, PGAV recommended the creation of a TIF district.

The TIF Commission would include six members from St. Louis County, three from Chesterfield, two from Rockwood and Parkway school districts and one from other taxing jurisdictions, such as the Monarch Fire Protection District.

Once the TIF Commission is established, a redevelopment plan will be created and a public hearing will be held. Finally, a recommendation from the TIF Commission will be presented to the Municipal Council.

If the TIF is approved, PGAV also recommends that a Special Business District (SBD) be considered to provide a revenue stream to maintain the new public improvements.

City Administrator Mike Geisel noted that the Chesterfield Valley TIF has enabled the city to make infrastructure improvements including the seawall and several roads such as Boone’s Crossing, Edison Avenue and the roads of Chesterfield and Eatherton Airport.

TIF revenues were also transferred to tax districts, including Rockwood and Monarch.

“This mechanism allows us to address these capacity issues without increasing the burden on residents or tax entities,” Geisel said.

Although the use of TIFs has been controversial in some cities, Geisel believes this is due to a lack of oversight.

“It’s ripe for abuse if not handled with the proper motivation,” he said.

Council Member Dan Hurt (Ward 3) added that Chesterfield has demonstrated that he knows how to use these tools properly.