The saga of the Hazelwood Mills Mall, also known as the St. Louis Mills Mall, is ongoing. The large tax-increment financing (TIF) plan that was proposed to help fund the mall’s development has failed. The nearly closed mall has not been able to pay the bonds it issued. The bonds were backed by the TIF and a transportation development district (TDD). So now the bonds are being paid by property assessments on businesses in the mall (there is nothing automatically wrong with that). But very few businesses are left in the development footprint. One business, the ice rink, says it can’t afford to keep paying off the bonds all by itself (not entirely by itself, but you get the point).
The case is complicated. My purpose here is not to get into the legal minutia of the lawsuit filed by the ice rink owners against the city of Hazelwood. But the broad strokes are important. The suit claims that the city has harmed the owners of the ice rink by taking ownership of much of the property in the mall. With the city owning much of the land, it becomes tax exempt, thereby making the ice rink pay even more of the bond debt. The suit also claims that the City of Hazelwood is dragging its feet on approving a youth sports center proposed for the site, and instead favors building an industrial park. The ice rink owners want the youth sports project to help share in the current tax burden, and clearly don’t want to wait for a possible industrial park years down the line.
The whole thing, as Marty Huggins might say, is a mess. SMI analysts have discussed this failure before and for good reason. The entire project from its inception is a perfect example of why local governments need to stay out of the economic development game, not get more involved in it. The mall is partly within a floodplain, in a struggling area, and was launched when indoor malls were already falling out of favor. The original project building the mall may well not have gone forward if Hazelwood and Bridgeton had not supported it with tax subsidies. If it had gone forward anyway, it would have done so with private money. But no, tax dollars—in the form of subsidies—helped propel this financial failure.
Hazelwood seems to be doubling down on its efforts by taking ownership of the land to promote its preferred use of the land. The city’s track record doesn’t justify such a move. A private entity wants to put a sports complex there now. Unfortunately, this sports complex will be getting some tax subsidies. But those subsidies are coming from St. Louis County, and they’ve already been approved. The best Hazelwood can do at this point is get out of the way and approve the project—more taxpaying entities in the mall will help ease the unfair burden on businesses such as the ice rink. The city doesn’t need to try and do more—it has done enough damage already.
