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Tax-raise tactics
(by Rebecca S. Rivas - March 17, 2008)
Marshall Cohen, a Central West End resident for about 20 years, said he was almost asleep when he reached for the copy of the West End Word on his nightstand. He read the article about a possible sales-tax increase in the Lindell Market Place shopping center on Lindell Boulevard at Sarah Street, home to a Schnucks and an Office Depot store.
“I looked at the headlines, and I almost fell out of my bed on Friday [March 7],” Cohen said. “I got on the phone and called four or five people and e-mailed some more.”
On Feb. 29, the Board of Aldermen’s Ways and Means Committee approved a petition to establish the Lindell Market Place as a community-improvement district, which allows business owners to raise money for area improvements by taxing goods. The tax increase of up to one percent would generate $2.5 million for improvements to the Lindell Market Place, which is owned by one company.
Most community-improvement districts involve multiple business owners rather than just one. They also use the funds for on-going services, such as security and cleaning, rather than for redevelopment funds.
Since he learned about the bill, Cohen has delivered letters in person to the Board of Aldermen, the mayor and Comptroller Darlene Green, trying to halt the petition approval. However, the same day he read the article, the full Board of Aldermen approved the bill.
“It’s insulting that they are going to add another tax, especially for the low-income families who are dependent on shopping at Schnucks and who don’t have mobility to go to another store,” Cohen said.
Mayor Francis Slay has 30 days to sign the bill in order for it become law. A representative of Slay said the mayor hasn’t signed it yet, and he isn’t sure that he will.
Shoppers aren’t ready for another tax
Residents who live close to the shopping center said it wouldn’t be fair to charge an additional tax for improvements to the isolated shopping center without giving some back to the surrounding neighborhoods.
“I’d rather see the whole community improved than just the store. No one lives in the store, we just shop here,” said A.C. Whittier, who lives a few blocks away and shops at the center about once a day, spending $100 week.
He said he has no problem with paying his taxes and would pay up to 12 percent in sales tax if it would help the neighborhoods. The city of St. Louis sales-tax rate is 8.241 percent, the region’s highest.
“If they put at least 40 percent of what they earned into community development, who wouldn’t go along with that?” he said.
One woman, who asked not to be identified, said she shops at Schnucks for her family’s groceries every week and that she would not agree to an additional tax.
“With all the money that they make, do they need someone to help them?” she said. “I need some help too, but I’m not about to ask someone.”
The city passed a half-cent sales tax increase for police and firefighter pensions in February, and the economy is in a lull, she said; it is not the right time to add another tax.
Kennedy trusted city experts
Eighteenth Ward Alderman Terry Kennedy, who sponsored the Lindell Market Place CID bill, said that the CID tax has a five-year duration, unlike the sales tax for police and fightfighters provided for in Proposition S. He said he was “staunchly opposed” to Proposition S and the new water-tax increase, which the board passed this February as well.
Kennedy said he was not aware that the shopping center’s CID was unique to others in the city. The St. Louis Development Corporation, which manages the city’s development projects, advised Kennedy that it was a good plan, he said, adding that he has to trust the experts when he doesn’t have time to research it himself.
“I was not advised that this was unusual,” Kennedy said. “If I was, I might have had a different behavior. I don’t mind telling someone ‘no.’”
The Board of Aldermen doesn’t have a research team, he said, and the board staff is limited.
“The clerk for the Board of Aldermen is also the board’s attorney,” he said, and five aldermen share one secretary.
In an unusual move, Kennedy has asked the mayor to hold off signing the bill into law until he has the chance to do further research himself.
But Kennedy said what impressed him about the plan was the initiative to bury the power lines in the shopping center, a $600,000 effort that would help prevent power outages, he said.
Other items in the budget include $250,000 for public art, $270,000 for roof replacements, $350,000 for “potential projects requested by the city,” $300,000 for “city defined improvements” and $75,000 for on-site security.
Businesses missed the memo
Most business managers said they were not informed about the community-improvement district or the sales-tax increase.
Peter Yn, manager of Chong Wah Chinese restaurant, said he couldn’t believe the property owners would raise taxes.
“The taxes are high right now, and the economy is down,” Yn said. “If you increase the tax, it would be too much.”
Linda Southard, manager of Simply Fashion, said in the past two years, the sidewalks have been repaved, the stripes in the parking lot repainted and new green awnings installed.
“I’m shocked,” said Southard. “Unless they come out and say they’re going to do something extreme, it doesn’t make sense to me.
“That puts taxes as high as Illinois, and I think it will drive business away,” she said.
Even Schnucks, arguably the biggest and most often frequented store in the shopping center, was taken off-guard by the CID.
“Schnucks was unaware of the community improvement district designation, and we have asked the landlord to provide us details regarding their plans,” said Lori Willis, director of communications for Schnucks. “We are looking into it.”
Some shoppers are supportive of CID tax
The people who seem more accepting of the sales tax are those who are new to the area or who don’t live in the neighborhood but shop at the center occasionally.
Bob Massie, director of the Family Health Center on Manchester Avenue, moved to the Central West End neighborhood recently.
He said the businesses between Kingshighway Boulevard and Sarah Street on Manchester Avenue are trying to organize a sales-tax increase to make improvements to the business strip. He was happy to hear about the Lindell Market Place CID plan.
“It’s a wonderful way for people who use the businesses to put their money back into their shopping district,” Massie said. “I think it will not only enhance how it looks but also continue to bring additional and diverse businesses into Lindell Market Place.”
Massie said the center is sandwiched in between areas that have undergone major renovations, including the Moolah Temple on Lindell Boulevard and the Central West End business district.
“What’s this place called? Lindell Market Place? It could use a dose of that,” Massie said.
Luther Blackwell, a St. Louis University student who lives in Florissant and doesn’t shop at the center frequently, said he would be comfortable with paying for the improvements.
“It’s good if they’re going to use the money to improve the parking lot and other things, but if they’re banking it …. It’s hard to tell what they would do with the money,” he said.
Cohen said he recognizes the value of traditional CIDs to help more than one business, but is confused on what happens when the property owner leaves.
“If [the owner] sold it at a higher value, are taxpayers going to be reimbursed?” he said. “I feel bad that the people didn’t have a say in this.”
— Additional reporting by Kara Krekeler
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