Objections from the Rountree Neighborhood Association and council members Craig Hosmer and Cindy Rushefsky to a four-story student housing complex on East Cherry Street weren’t enough to sway a majority of Springfield City Council.
Ultimately, council voted 5-2 last night in favor of granting developer RKJ Properties LLC tax abatements for blighted conditions. Councilmen Doug Burlison and Mike Carroll were absent.
Opponents said 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, and they had the numbers to approve the Cherry Flats redevelopment plan.
Landlord Russ Meck, via RKJ Properties LLC, proposed a roughly $6 million, 24-unit student housing development tied to a designation of blight that would allow him to receive 10 years of tax abatement on improvements. Meck, who would continue to pay property taxes at current levels over the 10-year period, is estimated to save up to $385,000 in tax payments during that time. The apartments would accommodate up to 96 residents, according to the plans.
Councilman Jerry Compton said tax abatements on new improvements have worked in center city and there’s no reason to change course now.
Compton cited the former Springfield Opera House at 313 South Ave., now an office building, as one example of redevelopment spurred by tax abatements that has paid dividends. The property’s previous appraised value was $152,700, according to Compton, but today it’s over $1.7 million. At 324 Park Central West, which is home to Sen. Claire McCaskill’s Springfield office, apartments and a tattoo parlor, the predevelopment property was valued at $46,200, compared to $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. But as it is now, I think it’s appropriate to use for this project,” Compton said of abatement incentives.
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. For one, Hosmer agrees with members of the neighborhood association who said the four-story building didn’t fit with the character of the neighborhood. Hosmer also said Meck has asked for a variance to move the building closer to the street to allow for more parking. Additionally, Hosmer said granting an abatement in this case encourages property owners to only move forward with improvements once they secure an abatement.
“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 council 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 had $125 million in projects in the pipeline, such as 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.
But the councilman was on the wrong side of the numbers. 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.
