When Board of Aldermen President Megan Green entered the office in 2022, she made it clear — the city needed to rethink tax incentives for developments.
Three years later, she said the city has made progress, pointing to new guardrails for granting incentives to developers, such as the city’s Economic Justice and Community Benefit scorecards and a generally more pragmatic approach to awarding them.
“I can say that we’re moving in the right direction,” said. “I think we need to continue down that path and set an example for what responsible development looks like.”
The scorecards provided the St. Louis Development Corporation with a clear way to evaluate projects seeking tax abatements and other economic incentives. The scorecard weighs the development's value to the city by gauging aspects of the project such as how many jobs it would create and its geographic location.
Green said she hopes to codify the scorecard, which was put into place in 2022. She cosponsored legislation with Ward 3 Alderman Shane Cohn to do so before the end of the aldermanic session in April.
“For a few years, it was kind of in this trial place of let's use it, but also recognize that it may change some as we get more information and more data and see how this works in practice,” Green said. “But I think we've gotten to a point where we understand what needs to be included in it.”
Green spoke recently with St. Louis Public Radio economic development reporter Kavahn Mansouri. The following conversation has been edited for length and clarity.
Green: You really can't talk about economic development without talking about its impact on schools. And so for me, that's always been one of the driving forces, is to make sure that we're very intentional with our use of tax incentives, because we need as much revenue going into our public schools as possible. I think the other piece of that is to make sure that we're not overincentivizing projects, because, beyond our public schools, our city coffers rely on tax revenue from new development. And if we're constantly giving out tax incentives that last for 10, 15, 20 years, and then they expire, and then, inevitably, there's then another request to re-up it, we never end up realizing that actual economic activity for the city.
Mansouri: I know that in the early 2000s, the city, you know, if you look at the scale of things, they went a little incentive crazy, but then in recent years, things have kind of crawled to sort of a halt. Can you talk about how we got to where we're at now?
Green: Sure, when I first moved to St Louis in 2005, I was actually a Coro fellow when it was the first time that I had actually learned about tax incentives. And it was kind of at the height of that frenzy of use of tax incentives. And there was this kind of mythos out there at the moment that said, you know, in 10 years, the city is just going to be so rich because all of these abatements are going to run out, and then we're going to have all this money.
Well, then that 10 years came, and that didn't happen. And then there had been a number of subsequent follow-up reports that actually showed that quite a bit of the development that was subsidized would have happened regardless, and that it didn't really move the needle for our city.
What was also eye-opening to me is when I first got to the Board of Aldermen, there were literally no standards for development. We did not have fiscal notes, and so we didn't actually know the fiscal impact of anything we were passing. And it was a battle over a number of years to get fiscal notes in place, to get some standards in place, to get some evaluation in place. And then, that really culminated a couple years ago in the SLDC, creating the economic justice scorecard and community benefit scorecard, because what that told us is, now we're setting out a standard of what we want development to look like in this city.
Mansouri: What more would you like to see going forward?
Green: I think that there's still a lot of work to be done, especially when we look at standardizing development. For example, you know, you look at downtown at the moment, probably the biggest issue with downtown is the same issue we have with our region, and that's fragmentation. We have so many different, you know, tax incentives that have been issued to different buildings. We have, you know, dozens of special taxing districts. You know, two different kinds of competing CIDS, multiple civic organizations.
And so there's no unified vision or direction to say, hey, if I'm a developer who wants to invest in downtown, I know that if I go down there, I will get x, y, z. If I do this type of project, if I do a project that's converting office to residential, or that it's creating housing that has a certain amount of affordability into it, or if I'm a new business that is relocating into the city and wants to go downtown.
So I think there's a lot of work that still needs to be done to kind of even focus our scorecard a little bit more in certain areas of the city, to make it clear that that this is the type of incentive that you would qualify for, if you make certain criteria is based upon the type of development we want to see in those areas.
