City Beat: Council approves Cherry Flats tax abatement

Opponents of a four-story apartment complex planned at the northern edge of the Rountree neighborhood came up barely short at the Nov. 10 Springfield City Council meeting.

Council members voted 5-2 in favor of granting developer RKJ Properties LLC up to $385,000 in property tax abatements to reverse blighted conditions and develop the Cherry Flats apartments. With only seven council members in attendance – Doug Burlison and Mike Carroll were absent – five affirmative votes were needed to represent a majority of council and pass the proposal.

The Rountree Neighborhood Association and council members Craig Hosmer and Cindy Rushefsky objected to the roughly $6 million redevelopment, saying the apartments wouldn’t fit the character of the historic neighborhood and property tax abatements awarded to a developer who has owned the blighted property for 10 years amounts to bad public policy.

But supporters said the project is consistent with the city’s economic development incentives policy.

Via RKJ Properties LLC, landlord Russ Meck proposed the 24-unit student housing development tied to a designation of blight that would allow him to receive 10 years of abatements on improvements. Under the plan to accommodate up to 96 residents, Meck would continue to pay property taxes at current levels during the 10-year period.

Citing the Springfield Opera House conversion to an office building at 313 South Ave., Councilman Jerry Compton said tax abatements on new improvements have worked in center city, and there’s no reason to change course now. The South Avenue property’s previous appraised value was $152,700, according to Compton, and today it’s over $1.7 million. At 324 Park Central West, home to Sen. Claire McCaskill’s Springfield office, apartments and a tattoo parlor, the property was valued at $46,200 before redevelopment and $875,100 after tax-supported renovations.  

“I think it is a good tool in our toolbox. However, if as a council, we decide to go back and revisit how it’s applied, I think that’s OK,” Compton said of abatement incentives. “As it is now, I think it’s appropriate to use for this project.”

Prior to the vote, Hosmer, a frequent vocal opponent of using blighted designations to secure abatements, said Meck’s project shouldn’t garner a tax break for multiple reasons. Hosmer agreed with neighborhood association members who said during the public hearing the four-story building didn’t fit with the area’s character. Rountree sits east of Missouri State University and west of Glenstone Avenue between Catalpa and Cherry streets and comprises an eclectic range of homes built at the turn of the 20th century.

Hosmer noted Meck has asked for a variance to move the building closer to the street to allow for more parking. Additionally, the councilman said granting a tax break in this case encourages property owners to only move forward with improvements once they secure abatements.

“I think it is bad public policy for us to grant blight just anywhere in the city, and that’s basically what our policy is now,” Hosmer said.

In May, council removed the “urban core” restriction listed in the city’s 3-year-old Springfield Economic Development Incentives Policy Manual to encourage redevelopment in blighted areas across town. The move came after a staff review of projects over a 15-year time period revealed that incentives seemed to be spurring downtown development. At the time, downtown Springfield was in line for $125 million in projects, including the redevelopment of the Vandivort, Heer’s and Frisco buildings, as well as roughly a dozen student-housing projects. That represents more than half of the $230 million in private investments downtown has secured in the last 15 years.  

“The norm right now is that if you don’t get blight, you’re not going to do construction projects, and that, to me, sends the wrong message,” Hosmer said.

According to Springfield Economic Development Director Mary Lilly Smith, Cherry Flats represented the ninth time council has approved tax abatements on a redevelopment project since Hosmer joined council in April 2013.

Legislative priorities
Council unanimously approved a resolution outlining the Queen City’s legislative priorities for 2015.

Among them is a list of new legislation sought by the city and broad positions of support or opposition to state and federal issues local lawmakers could encounter. Here’s a snapshot:

• Campaign finance reform – the city supports legislation that would lessen the influence of large donors on the legislative process.

• Testimony via teleconference – allowing officials to provide testimony to legislative committees through teleconferencing. Mayor Bob Stephens said at the meeting he’d like to see teleconferencing capabilities utilized by state officials in Jefferson City because twice last year he traveled five hours to the capitol to provide testimony for a legislative committee that took only minutes to deliver.

• Increase Municipal Court costs – the $12 court cost fee has been in place since 1979.

• Avoid unfunded mandates – community affordability should be considered before implementing new rules.

• Red-light camera enforcement – cities should be able to decide whether and how to enforce red-light cameras.

• Economic development support – state officials should strengthen economic development tools, such as tax credits and project incentives, that spur capital investments and job creation.

• Education and workforce development – progress would help combat poverty.

Hampton Townhouses
Organized by real estate investor Robert Kelly Byrne, 311 S. Hampton LLC seeks council approval for the Hampton Townhouses Redevelopment Plan, which includes a blight designation for three adjacent properties along the west side of South Hampton Avenue between East McDaniel Street and East Walnut Street. As the city’s senior economic development staff member introduced the proposal, she said two of the properties have vacant homes exhibiting unsanitary and unsafe conditions, and one lot is empty.   

The plan calls for combining the lots and building up to 15 townhouses, though Smith said the developer is currently intending to construct nine. The plan calls for 10 years of property tax abatement on new improvements, which would result in an estimated tax savings of $134,000.

City staff and the Planning and Zoning Commission recommend approval. The issue is scheduled to receive a second reading and vote at the Nov. 24 meeting.