What’s Old Is New Again? “New Building” in Aerotropolis Legislation May Not Actually Mean “New Building”
We’ve talked at length about Emerald Automotive and how it would not have to use an airplane or export a widget to receive Aerotropolis tax credits, but would businesses like Emerald Automotive even have to construct a “new building” to get the public’s money?
A close reading of the Aerotropolis legislation reveals that the “new building” requirement for Emerald Automotive-type warehouses is ultimately a “new occupancy permit” requirement, since a “new building” is defined in the bill as:
a new structure or building for which a certificate of occupancy was issued on or after July 1, 2011 for commercial activity, including fixtures and equipment;
There is no definition of what constitutes a “new structure,” and if read by properly omitting the “new structure or” section, the definition of a “new building” could literally be construed as “a new building is a new building,” or even “a new building is a building.” This legislative ambiguity sows the seeds for real shenanigans if the bill were ever signed into law. Is a “new building” one year old? Five years old? Ten years old? More? Does the applicant for the tax credit have to be the first tenant of the building?
The only unambiguous requirement, then, is the requirement of a “certificate of occupancy,” which is a permit mandated for businesses in both new and old buildings. In fact, in Saint Louis City a commercial occupancy permit is valid until:
- The business changes;
- The business owner changes; or
- The property’s use changes.
If one of these elements changes, a business owner has to apply for a new occupancy permit. Does that make the structure a new building? Of course not. Therein lies the problem. Why did the author of the Aerotropolis legislation make the “new building” requirement so ambiguous that businesses moving into existing buildings could meet the tax credit’s “new building” requirement?
The building trades in Saint Louis may think the Aerotropolis legislation means that $300 million in tax credits will be going toward new construction projects in the region. There are ample reasons to believe that’s not the case.
And one more thing: We’ve talked about the ever-changing jobs estimates for Aerotropolis made by the proposal’s supporters. How do you create “18,468 construction jobs” — almost two-thirds of all the jobs promised — with legislation that doesn’t require new construction (and thus new construction jobs) for tax credits to be issued on a “new building”?