Council expands 'blight,' approves $48M in projects

The last thing Councilman Craig Hosmer wanted to do was expand "bad public policy," but his call to examine the city’s position on awarding tax abatements opened the door for supporters of the incentives to remove geographical limitations.

At the May 12 Springfield City Council meeting, council members voted 7-2 in favor of a resolution allowing the city to declare any area of the city blighted should it meet state definitions. A designation of blight – which requires conditions such as obsolete platting and unsafe or unsanitary structures – is needed for developers to secure tax abatements on improvements.

Following the resolution vote, council approved two separate apartment projects representing $48 million in planned developer investments – a $38 million student housing complex in center city and a $10 million project in Galloway Village.  

Since 2011, when council approved its Economic Development Incentives Policy Manual, the city has limited blight approvals to the “urban core.” But when commercial property developer and manager Sam M. Coryell began working with the city to receive a tax break on his apartment plans on the southeast edge of town, the definition of that area was examined.

Coryell, the executive director of TLC Properties who was seeking a 10-year abatement on a $10 million complex called Township 28, has said talks with the city about blighted conditions in the area led to the creation of a broader redevelopment plan. That plan, which also was approved with a 7-2 vote last night, allows property owners within a 74-acre area north and south of Sequoita Park to receive 10 years of abatements on improvements to their property that exceed $100,000 and are consistent with the plan.

Springfield Economic Development Director Mary Lilly Smith said the blight designation was justified because Galloway Village was established as a separate community in the 1880s before being absorbed by the city about 50 years ago. She has argued the village was within the city and had its own “urban core” issues that would qualify it for abatements.   

Hosmer, who has been a vocal critic of tax abatements, said the property didn’t fall within the urban core, and on April 28, he successfully called for the issue to be reviewed by the city’s Plans and Policies Committee before a vote on the Galloway plan. However, since that meeting, the committee voted 3-1 to remove the “urban core” restriction from the manual, which led to the council resolution.    

“I think this is basically expanding a bad public policy,” Hosmer said of the resolution. “I think that limitation was good in 2011, and I think it should have been maintained.”

Councilman Jeff Seifried was among those on council who felt the move to expand the blight footprint would encourage development that might not occur otherwise. The resolution expands potential areas for blight, which is permitted under both Chapter 99 and Chapter 353 of state statutes.

“These are common sense changes to the economic development policy,” Seifried said.

Councilwoman Cindy Rushefsky joined Hosmer in opposing the resolution and the redevelopment plan for Galloway Village.

“I think private development should pay for private development,” she before casting her vote, adding council should be cautious in awarding tax abatements.

Rushefsky later voted in favor of abatements for the 166-unit student housing plans on the site of the former Colonial Bread factory just across from Hammons Field.

Husch Blackwell LLP attorney Shawn Whitney, who worked with both Coryell and Austin, Texas-based student-housing developer Aspen Heights on drafting their separate redevelopment plans, said this morning the votes represent a victory for developers.

“I think the city of Springfield and council took progressive action realizing that other areas of the city need help as well,” Whitney said. “This will open the door for those opportunities.”[[In-content Ad]]