Megan Green, Jamilah Nasheed Weigh In on TIFs, Parking Money

SOME OF THE MONEY in the Argyle TIF should be used to buy additional garbage trucks for the city of St. Louis.

City leaders need to do a better job of educating the public about the return on investment that TIFs are generating.

And Treasurer Tishaura Jones made a sensible decision to use money from the Parking Division to study the viability of a possible North-South Metrolink line.

These are some of the views that Megan Ellyia Green and Jamilah Nasheed expressed in response to questions from McPherson regarding the city’s use of tax abatement and tax increment financing, the cash reserves in the Parking Division, and the specific issues raised by the Argyle TIF. Green and Nasheed are two of the three declared candidates in next year’s Democratic primary for president of the Board of Aldermen. (The third candidate, incumbent Lewis Reed, did not respond to messages sent via e-mail and social media.)

Over the past couple of weeks McPherson has been examining the Argyle TIF in the Central West End, a deal dating back 20 years which used tax money to help pay for the building of a city parking garage. In the past decade the Argyle has become one of St. Louis’s biggest TIFs. The city’s reports show that as of June 2017 it had captured almost $18 million in property, sales and earnings tax revenue, and that it had $6.2 million of cash on hand. The TIF is helping to send $1 million each year to the Parking Division to pay down the division’s debt; some aldermen and local residents say the TIF’s money should be freed up for other uses instead. Six charts here help explain how the TIF works.

“The Board [of Aldermen] should amend the TIF agreement to dedicate the funds in the Argyle TIF to purchasing more trash trucks,” said Green, currently 15^th Ward alderwoman, in an e-mailed response to McPherson. “This could then free up revenue from the $3 refuse fee [a recent increase] to support raises for refuse workers who are quitting due to erratic work schedules and low pay.”

Nasheed, who represents the 5^th District in the Missouri state senate, said one of the city’s major problems is a lack of clarity on the money going into and coming out of its TIFs, which number over 100. “TIFs can be a powerful tool across our city, but they require a better effort at educating the public on how much revenue TIFs are generating and what the return on investment is for each,” she wrote in an e-mail.

McPherson posed four questions to all the candidates. The complete responses from Green and Nasheed are below; they’ve been lightly edited for style and context. Green replied first, so her responses come first. McPherson will update this story if Reed replies within a reasonable period of time.

MCPHERSON: What’s your view generally of development incentives in the city of St. Louis? Are they being used correctly? If not, what are your specific ideas for reform?

MEGAN ELLYIA GREEN: Tax incentives are supposed to pass a “but/for” test. This test means that in order to be granted incentives, projects must demonstrate that this project could not happen, nor could a similar project happen on that site, if not for the incentives. Unfortunately, tax incentives are often granted to projects that don’t pass a but/for test. In fact, we have even seen instances where LCRA [Land Clearance for Redevelopment Authority] recommends no incentive for a project, but the alderman for the ward where the project occurs still passes legislation to support that incentive. Additionally, our current system for development in the city is completely developer-driven, meaning that developers are often the ones deciding what project is the best for a neighborhood (based upon how much money they can make off of a project) rather than communities deciding what development they want in their neighborhoods. St. Louis needs a city-wide plan for tax incentive usage and for development. A plan that details in what area of the city projects are eligible for what level of tax incentives. This system must incentives development in areas of the city that are not experiencing redevelopment, while limiting the tax incentives in areas of the city where there are strong markets and development will happen organically. Currently, some areas of the city that have strong community development corporations have neighborhood-level plans for that development their communities support. However, not all areas of the city have such organizations, and those that have the strongest CDCs tend to be in more affluent/stable areas of the city. In addition to a city-wide plan, I support inclusionary zoning  or affordable housing linkage fees for projects in areas of the city that lack affordable housing and have large numbers of market-rate and luxury housing being built.

JAMILAH NASHEED: Development is one of the keys to the growth and sustainability of St. Louis. However, growth isn’t just in buildings or new apartment buildings – it is also an investment in the people of St. Louis. Our infrastructure is in extremely dangerous shape.  The healthcare of our citizens – including mental health and children exposed to trauma – leads to violence and crime.  Access to jobs, the very backbone of human dignity, is not equal across the city.  We’ve come so far in terms of development within the City – Cortex, NGA, the project happening at the Foundry, but we need to have a plan for how to make the growth expand across the city so whether you live north of Delmar or south of I-44, you have equal opportunities and access.

2. At a time when the city is struggling to collect trash and fund other basic services, what do you think should happen to the money in the Argyle TIF? Should it stay there? Should some of the money be allocated now to the taxing districts (schools, general fund, etc.) that are entitled to the money after the TIF expires in 2021? Or is there another use for this money you would prioritize?

GREEN: I think that the Board should amend the TIF agreement to dedicate the funds in the Argyle TIF to purchasing more trash trucks. This could then free up revenue from the $3 refuse fee to support raises for refuse workers who are quitting due to erratic work schedules and low pay. I also think that the Argyle TIF raises a bigger issue about monitoring and compliance of tax incentives. The city simply does not have the staff that it needs to adequately monitor all tax incentives, and exercise claw-backs if a project is not meeting its commitments. This is something that needs to change.

NASHEED: First of all, there’s a certain amount of reserves I think our city should always have on hand in case of another economic downturn. What I would like to see happen is an examination of where those reserves are invested and what the returns are being used to fund.  I think one of the bigger problems we have in this city is a lack of clarity of what’s coming in and going out. TIFs can be a powerful tool across our city but they require a better effort at educating the public on how much revenue TIFs are generating and what the return on investment is for each.

3. A good chunk of the Argyle TIF’s tax money goes to help pay off the debt of the Parking Division. But given that the Parking Division already has plenty of its own unrestricted cash reserves ($21 million as of last June 30), do you think the TIF money should be going there in the first place? Why or why not?

GREEN: I do support keeping some cash reserves from TIFs that are a part of parking operations, and do think that some should go back to the Parking Division to help pay down debt, provide the reserves necessary to help our credit rating, and/or provide funding for the creation of other parking garages/infrastructure. When parking reserves are high, I do also support working with the treasurer to find alternative ways that revenues can help fund the needs of the city. Given that the city has not been wise in the use of our funds, I do see benefits in keeping a separate reserve fund with the treasurer’s office that requires some consensus between the treasurer and the Board of Aldermen for how those funds can best be used. I think this creates some checks and balances, which is necessary given how the board and the mayor have depleted our reserves in recent years.

NASHEED: There are serious problems related to balancing the city of St. Louis’s checkbook, and one area I’m extremely concerned about is the dependence on refinancing assets in order to pay down debt.  As president of the Board of Aldermen, you’re one of three members of the Board of Estimate & Apportionment, and I think it’s the “A” which is key: Apportionment.  When we write the budget and determine how we are going to apportion the resources we have in the city, are we doing so in an equitable sense?  I don’t always think so.  It takes real leadership to put aside petty fights and political scores and just say “what are we doing here and how can change this trajectory?”  If we begin to look at the budgeting and apportionment process based on how much we’re spending to bring up the quality of life of the people of the city, rather than who can best protect their individual interests, we won’t need to depend on tax increases or refinancing assets to pay off debt; we’ll have real people spending real money in the city.

4. Speaking of the Parking Division’s unrestricted reserves, they’ve been in the news recently. In June the treasurer’s office agreed to send $10 million of the money to the city’s general reserve fund. But that leaves about $10 million in unrestricted parking reserves; this money is not needed to guarantee any bond issues. Some it is used for financial empowerment programs; $2 million is also being spent to study the North-South Metrolink line. Do you think this is the wisest use of this money? Are there other programs you would spend this money on instead? And should the treasurer’s office continue to control this unrestricted money, or should it be part of the city’s overall budget?

GREEN: I definitely support the use of parking revenues to support the N/S Metrolink. In the long-term, investments in public transit are smart economic development policies for the city.  There is also ample evidence that child savings accounts are smart ways to increase the long-term academic success of students, and even decrease crime rates in the long term. Too often in city government we do not invest in long-term solutions, opting instead to put out the fire that is in front of us at the moment. Both of these projects are projects that were recommended in the Ferguson Commission report, which should be a blueprint for city government in the policies that we are pursuing. I think that a lot of the problems we have at the moment, whether they be high crimes rates or racial and economic inequities, will not be solved unless we start investing in longer-term strategies and not just continually pursing band-aid solutions because it’s the politically expedient thing to do.

NASHEED: First of all, I applaud Treasurer Jones for working with the mayor’s office to help shore up the finances of our city.  However, this is a short-term solution to a long-term problem and our municipal leaders are not having the serious conversations required to fix it.  In Jefferson City I’ve been able to work across the aisle to add millions of dollars to the state budget for programs and services in the city of St. Louis. It’s not always easy but I get it done because I know everyone has to give and take a little in order to get ahead.  That’s what I’ll continue to do as president of the Board of Aldermen: bring businesses, citizens and elected officials to the table to figure this out.  I also think it’s key to have this conversation about city services like Metrolink.  If you need to get to the hospital or you want to work at NGA or you want to go downtown and vote at the Board of Elections because you have to work all day on Election Day, it should be easy to do so using public transportation.  Another reason I support Metrolink is when you look at cities we compete with for economic development – cities like Kansas City and Nashville and Charlotte – they continue to update and expand their public transportation programs because they realize the attractiveness of them to younger workers, and the increase in equality people see when they can get around the city easily.