For Jim Sansone, it’s a simple fact: The 350,000-square-foot retail project Plaza on the Boulevard in Jennings, Mo., would not exist were it not for development subsidies.
And Plaza on the Boulevard is far from the only project across the country that has relied on the tax breaks that come with Tax Increment Financing (TIF)and other incentives from local governments.
This is why Sansone, principal with St. Louis-based Sansone Group, doesn’t understand why such government-provided development subsidies and incentives receive such bad press.
“These subsidies are a necessary and excellent tool that has provided communities with development opportunities that would not exist if it wasn’t for TIF districts and other programs,” Sansone said. “The need for these tools certainly hasn’t lessened. We need new development to help us out of this difficult economy.”
Critics say that governments misuse such tools as TIF districts. Only development-challenged areas are supposed to be declared TIF districts; the tax breaks are a way to encourage developers to build in underserved communities. Critics, though, say that cities often declare perfectly healthy and vibrant sections of their municipalities as TIF districts as enticements to developers.
Sansone doesn’t deny that some development subsidies are misused. But he says that such cases are rare. The media focus on these infrequent cases while largely ignoring the good that TIF districts and other development incentives bring to communities, Sansone said.
As an example, Sansone points to Plaza on the Boulevard in Jennings.
The project, developed in 2006 by Sansone Group, sat in land that Jennings had designated as a TIF district. It rose, too, in a community improvement district, receiving additional financial benefits because of this.
Sansone says that project has since been a boon to the area. Anchored by Target and Schnucks Supermarket, two powerful tenants, the retail center also includes such national chains as Burger King, Sonic, Foot Locker, Fifth Third Bank and Wendy’s.
And, Sansone says, it represents a significant improvement from what formerly sat on that piece of land.
“The city granted us the development tools that allowed us to develop and keep leased an excellent project serving the community,” Sansone told Midwest Real Estate News. “Formerly, that space had a dilapidated old shopping center. The only suggested uses for that land were warehouse-related. We proposed a retail project. With the proper assistance from the city, we were able to deliver what today is a fully leased retail development serving the community.”
Sansone says that he’d love for the press to stop bashing TIFs and other development subsidies.
The country today needs every tool at its disposal to help build its way out of a still-sluggish economy, he said.
“The more we can do to encurage growth and development, the better for all,” Sansone said. “That helps spur the economy. This is not the time to cut back on anything that helps make new developments possible.”
