St. Louis rethinks incentives, tries ‘tax assurance’ to lure developers
For years, St. Louis has been willing to offer a decade or more of property tax breaks to developers building something new in the city. Now, it tries to set up deals so there’s at least some new property tax money paid up front when developers put up new buildings or rehab old ones. Those deals still amount to significant discounts on the property taxes that would otherwise be paid on land improvements, generally 75 percent or more.
The agency that oversees tax abatement requests, the Land Clearance for Redevelopment Authority, indicated a new approach. Instead of tax abatement, it wanted to offer tax assurance.
The first case of assurance appears to be the developers of a 192-room hotel. The project would still pay full property taxes on the value of improvements when it’s completed. But the deal would make it so the property assessment doesn’t rise more than 2 percent during each biennial reassessment.
That move gives the developer of the $40 million project at least 10 years of property tax certainty, officials say.