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State and Local Government / Municipal Policy

Chesterfield’s Corporate Welfare House of Cards

By Graham Renz on Jul 28, 2017

Missouri’s development house of cards is all too often built upon a shaky foundation of corporate welfare. It looks as though Chesterfield may be stacking the cards higher and higher.  

If you drive along I-64/40 in western Saint Louis County, you’ve likely seen three competing shopping malls: Chesterfield Mall, Taubman Prestige Outlets, and Saint Louis Premium Outlets. You can’t tell just by looking at them, but the two outlet malls are subsidized through various special taxing districts. Yes, that means the public is helping to pay for two competing malls less than five miles apart. And no, the bad policy doesn’t stop there.

Chesterfield Mall, around long before either outlet mall, has been in steady decline, and was recently foreclosed on. Unsurprisingly, the mall’s owners claim business declined significantly after the outlet malls opened roughly five years ago. (Other failing malls in the region make similar claims.) While competition is good for consumers, the government subsidizing some market participants at the expense of others isn’t something to cheer about. It is no more than government picking winners and losers.

And things get worse still.

Public officials and developers are now cooking up ways to bring new life to Chesterfield Mall. One proposal would convert the mall into a mixed-use facility, incorporating office, residential, and retail uses. This is an exciting idea, and could keep a long-standing community fixture in use. The issue isn’t with what the mall might become, but how its rebirth might be funded. Chesterfield’s department of economic development has a troubling idea: create a special taxing district (in particular, a transportation development district) to help subsidize a conversion. Sound familiar?

Government interference seems to have helped put the mall in the spot it is today. But if government subsidies didn’t work the first time—or only worked for some at the expense of others—why use them again? Why not let the market work? If the mall doesn’t prove to be a good investment, why should taxpayers have to bail it out?

It’s unfortunate to see a major community development languish. But it is even more unfortunate that taxpayers could be asked, yet again, to remedy what could be a government-induced development collapse. 

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About the author

Graham Renz

Policy Analyst

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