Last week the Tax Increment Financing (TIF) Commission voted to approve Koman Group’s $4.5 million TIF proposal for 32 N. Euclid in the heart of the Central West End. The application will now go before the Board of Alderman for additional approval. David Stokes, director of development at the Show-Me Institute, spoke in April of 2014 to the Missouri House of Representatives on some of the problems with using TIF as a redevelopment strategy. Policy analyst Joseph Miller recently wrote about how the current building, which houses a successful neighborhood bar and dry cleaner, is by no means a “blight” to the community.
Why is it necessary to use TIF in a prosperous city neighborhood to finance two floors of underground parking in a walkable, urban neighborhood? 32 North Euclid is located in a thriving city neighborhood within close proximity to a 160-unit public garage, metered parking, and the Central West End Metrolink station. The program plan presented to the TIF Commission is a six-floor, mixed-use building with ground floor retail, second floor office space, and four upper floors of luxury apartments. The building will ultimately contain between 52 and 68 market-rate units with a very high price point. Koman is estimating it will construct between 70 and 80 subterranean parking spaces at a cost of $45,000 to $60,000 per space. Given these cost estimates, over 70%—and up to 100%—of taxpayer money funding the project will go to pay for parking.
While I understand the financial reason for wanting ground floor retail along Euclid and the aesthetic reason for wanting to hide parking, these simply don’t justify diverting millions of dollars of future tax revenues to finance parking for a luxury development in a neighborhood with a Walkscore in the low 80s. Classifying the current building as a blight to the community is dubious at best. This TIF proposal demonstrates how a subsidy intended to spark redevelopment on sites where development would not occur “but-for” the subsidy is being abused to finance luxury residential developments in wealthy, high-growth neighborhoods at the taxpayer’s expense.