A Dallas-based developer’s quest to stack three taxing districts on the Downtown West redevelopment of the Jefferson Arms building hit a bump in the road at Thursday’s Port Authority Commission meeting.
Several members of the commission expressed trepidation over creating a port improvement district on behalf of the nearly completed Alterra Worldwide development at 415 N. Tucker Blvd.
Alterra Worldwide seeks approval for three taxing districts that would each add a 1% sales tax to purchases made at the development. The proposed taxing districts include a port improvement taxing district, a community improvement district and a transportation development district.
Commissioner William Kay Jr. noted that if all three districts are approved, the Jefferson Arms building would have the highest sales tax rate in the city at 12.67%.
“We’ve got the CID, we’ve got the TDD — the tax rate right now will be 11.67%,” Kay said. “That’s the high mark for the city. I do not think the port authority needs to get into the business of subsidizing these projects.”
Commissioner Taunia Allen Mason said she’s concerned the higher tax rate could scare off possible customers at the development’s planned 225 hotel rooms, 235 apartments and several businesses.
Alterra Worldwide chief executive officer Mike Sarimsakci pushed back. He said the types of businesses going in at the development would bring in people willing to spend more.
Alderman Shane Cohn, a member of the commission, said he’s frustrated by inconsistent updates and information provided by Alterra Worldwide. He said it’s not clear how the money from this taxing district would be used.
“I get a little bit miffed when a developer comes back for these incentives, and here we are on this call and we’re being told that they’re needed to complete or cover their extra cost for a ballroom or a historic restoration,” Cohn said. “We’re being told in the same conversation that this could be used for streetscape.”
Commissioner Joan Miller said she worries that if these tax districts aren’t created, more developments will run out of funding and sit vacant throughout the city.
The commission voted to revisit the creation of the taxing district at its September meeting.
Alterra began redeveloping the Jefferson Arms building, originally built for the 1904 World’s Fair, in 2016, but after many delays, construction began in 2022.
The development received $17 million in tax increment financing, as well as at least $78 million in historic tax credits and energy-efficient financing, according to the St. Louis Business Journal.
Sarimsacki said the development should be mostly operational by October.
