Did We Get What They Paid For? How Jefferson City Bureaucrats Erred on DALATC
[NOTE, 6/28/10: According to officials at the Department of Economic Development (DED), the DED did undertake a review of NorthSide Regeneration LLC’s tax credit application, and fixed the discrepancies it found in the company’s application before formal application submission. Show-Me Institute research found discrepancies in approximately 20 percent of the reported property values in the initial submitted application. The DED did not send some of the documentation surrounding the application process after a Show-Me Institute Sunshine Law request, because DED officials say it was part of the issuance process, rather than the review process. An earlier version of this post stated that the DED overpayed for tax credits; the present version does not. Indeed, the DED now asserts that it paid according to figures on a document other than the application submitted.]
The Show-Me Institute’s public information specialist, Audrey Spaulding, released a report on Friday documenting more than 100 discrepancies in the 2009 application for Distressed Areas Land Assemblage Tax Credits submitted by NorthSide Regeneration LLC to the State of Missouri. On New Year’s Eve, the state’s Department of Economic Development (DED) approved the inconsistency-riddled application, granting $20 million in taxpayer funds to the LLC.
Internal documents from the DED disclosed last week reveal that a state agency moving full-speed ahead to grant “the maximum allowed issuance ($20M) before the end of ,” while failing verify the applicant’s purchase price claims. Indeed, the DED’s outreach to a St. Louis–based independent private consultant consisted solely of a request to verify the number of parcels per acre in the area submitted for tax credit reimbursement.
In its typical bureaucratic fashion, the DED pressed ahead in its approvals without asking even the most basic question: What exactly is the state paying for, here?
Thanks to Audrey’s reporting, we can answer the question that our state’s bureaucrats failed to ask. Consider the following:
2829 Saint Louis Avenue, pictured above in June 2010, is a one-story, red brick, flat-roofed home with side entry, wood porch, and full basement. A raised limestone water table extends horizontally across the one-bay primary facade below a centered rectangular window opening, while a narrow band of white terra cotta projects outward from the brick wall above the window opening and below a band of white terra cotta coping. The west facade appears to be a former party wall, revealing a parapet that steps downward to the rear of the regular, 25-foot-by-130-foot lot. Presently in poor condition, the modest 908-square-foot home still retains remarkable stability — a product of its solid 1880s construction.
According to the city of St. Louis Assessor’s Office, the home has a total assessed valuation of $1,370.00, of which $360.00 is assessed land. During the past three years, its property tax bills were as follows: $119.06 (2009), $122.45 (2008), and $122.68 (2007). At present, the City of St. Louis lists the property’s appraised value at $7,200.
Prior to its acquisition by N&G Ventures LC in late 2005, the building appears to have served as a modest residence. Since its acquisition, the building’s condition has likely deteriorated, as evidenced by a collapsed rear wall and disintegrating side wood porch.
The above image places 2829 St. Louis Avenue in the context of its contemporary St. Louis streetscape. I could not resist adding a few annotations, courtesy of information contained both within the approved DALATC application and the St. Louis city Assessor’s Office.
I would venture to guess that most residents of St. Louis city would scratch their heads and dig a little deeper if confronted by such an outrageous claim.
Now, the DED says that they were not hoodwinked; they did their job.
I still have to ask — what did the DED think that it was paying for, here?