St. Louis is issuing fewer tax incentives for development projects within the city limits.
Incentives are approved by both the Land Clearance for Redevelopment Authority Board and the Board of Aldermen, and in 2017 both bodies approved incentives for 66 projects. That number dwindled to 11 in 2023.
The figures come from a presentation by the St. Louis Development Corporation on Tuesday to the Board of Aldermen’s Housing, Urban Development and Zoning Committee, the first time SLDC has presented such a report. It’s an annual report required by an ordinance passed in 2022.
“We’ve cut back on incentives quite a bit on projects that actually need it versus using it a lot on many possible projects that didn’t need it in the past,” said Zachary Wilson, SLDC’s vice president of economic development incentives.
The presentation also showed a sharp difference between the number of projects receiving approval for tax incentives and those projects that then activated them. Projects must be completed and comply with city rules for minority- and women-owned business participation goals, workforce development and prevailing wage, to make use of an incentive.
“This department does not hand out cash,” Wilson said. “We save money in the long term for the developer, and they build that into their loan.”
Wilson acknowledged that the process to win approval for development tax incentives in St. Louis is much more rigorous than in municipalities in neighboring counties.
“They have hardly any requirements on their incentives,” he said.
It’s something Ward 9 Alderman Michael Browning echoed.
“That makes it tough to compete,” he said, adding he still supports more stringent requirements and guidelines for tax incentives.
The presentation to the Board of Aldermen committee also comes nearly two years after SLDC revamped the ways it scores projects seeking incentives to better align with what local neighborhoods want. These changes are ones many aldermen, including Ward 14 Alderman Rasheen Aldridge, said they were pleased with.
“Being very strategic on (incentives) will be able to bring a different type of growth and development to the community,” he said. “It may be a hindrance to us, because counterparts in the region don’t do that.”
Wilson added the updated process has him pushing developers to reach out to the community much earlier.
“Even before I get an application people call and have questions about incentives, I say, ‘you have to talk to neighborhood groups,’” he said. “‘You have to get involved as soon as possible.’”
