10/12/2005

If at first you can't blight Sunset Manor, try, and try again: St Louis (MO) Post-Dispatch, 9/29/05

By Martin Van Der Werf

When is an area blighted? And how many chances does a city get to try to prove that?

Documents unearthed in a lawsuit against Sunset Hills show that the city kept asking for new evidence that the Sunset Manor subdivision was blighted, despite a finding by its consultant that it was not.

The area is the proposed site of a $165 million shopping center to be built by Novus Development Co. The company was supposed to close on the 254 houses to be torn down in late August, but it did not have the money. It asked homeowners for an extension that expires Friday.

A message on a hotline the company established said that closings by Friday are "not practical," but "not impossible."

The Board of Aldermen voted 7-1 in May to grant Novus $42 million in tax increment financing [TIF]. To qualify for the funding, an area must be declared blighted or a conservation area - meaning it will become blighted without substantial improvement.

The shopping center would be built between Interstate 44 and Watson Road, just east of Lindbergh Boulevard.

The city's consultant, PGAV Urban Consulting, concluded in August 2001 that the area did not meet the criteria, especially the houses in the eastern part.

"A blighted or conservation area designation is not possible except under the weakest of arguments," wrote PGAV Vice President John Brancaglione in a letter to City Attorney Robert C. Jones. The houses in the western part might have met the criteria, the letter said, under certain conditions: if property values were decreasing, if the area had a disproportionate amount of crime, if infrastructure were inadequate or if there were numerous code violations.

However, research later showed that property values had increased 17 percent in the previous three years. Sunset Manor made up less than 2 percent of the city's crime, and while there were problems with the storm and sanitary sewers, those were the responsibility of the Metropolitan Sewer District, not the residents.

Nonetheless, the city decided to designate the area as blighted and eligible for TIF. At that point, PGAV hired a Brentwood architecture and engineering firm, Stewart, Schaberg & Turner, which concluded in December that nearly two-thirds of the properties had at least three deficiencies that would qualify the neighborhood as a "conservation area."

Among the reasons: Houses were obsolete, because they had bedrooms in basements. That indicates that "the house, as built, does not provide for the inhabitants of the dwelling." Porch stairs had settled and were out of compliance with codes. Some windows were too small for emergency escapes.

After seeing the report, PGAV changed its recommendation.

A state Senate committee looking into abuses of the state TIF laws will want to look more closely at this creative application of the term blighted.


St Louis Post-Dispatch: www.stltoday.com