St. Charles gets cut of $32M in tax credits
Suburban Journals
March 14, 2011
By Russell Korando
St. Charles will receive one-third of the $32 million in new markets tax credits that the Heartland Regional Investment Fund received Feb. 28 from the U.S. Department of Treasury.
The city of St. Charles, the St. Louis County Economic Council and the Southwestern Illinois Development Authority, which represents four Illinois counties, are the regional groups that form the Heartland Regional Investment Fund. The tax credits are supposed to be used to help create jobs and capital investment in low-income communities throughout the region.
A statement from the St. Louis County Economic Council said these tax credits "provide a critical source of equity to developers and businesses who would otherwise find it difficult to underwrite job creating development projects and business expansion activities."
St. Charles Mayor Patti York said new markets tax credits could be a solution to provide the equity to get initiatives started in a number of areas.
"Anytime we can bring tax dollars back to St. Charles we're going to do that," said York, who is running for her fourth term as mayor. "Developers can use these credits and take them to the bank and pay cents on the dollar, depending on what the interest rate is.
"It means that we get tax credits a developer can use for a project, and we've banded together with the economic council and it's a new endeavor for us. Let's see if we can get some money for projects going on. We have a project, but it's not percolated enough."
This is the first year any of the members of the Heartland fund submitted a proposal for the tax credits.
York credits John Knoll, the city's manager of retail development, for suggesting St. Charles take part in trying to obtain the funding. Knoll said the tax credits could only be used in census tracts that were 80 percent below the median income of a city and on projects that provide a service to the community.
"Our whole goal was to help fill the gap for funding a new post office purchase and relocating that to Lindenwood Town Center," Knoll said. "There is a gap in funding to fill what the post office wants for its current building and what it would take to build a new one. Since DESCO will be building the post office, they can discount that gap there."
The DESCO Group, a commercial real estate development and managing company, is designing the Lindenwood Town Center, a 30-acre mixed-use development proposed at First Capitol Drive and Boone Avenue in St. Charles. As planned, the center would include a Schnucks grocery and other stores, Lindenwood student housing and the St. Charles Post Office, which would move from its current building at Fifth and Jefferson streets.
