Wentzville Wanted a Rec Center. It Offered $23M in Tax Money to Kroenke Associates to Get It.
Date Posted: September 16, 2019
Posted In: Projects,
From St. Louis Post Dispatch: For this fast-growing suburb on the edge of the St. Louis metropolitan area, the deal was a win-win: a public-private partnership that will allow the city to finance a $38 million recreation center that its residents have long wanted.
But the private development company in that partnership is connected to a man reviled by most St. Louisans: Stan Kroenke, the man who moved the Rams to Los Angeles. And the way his companies are using a special taxing district law to help finance his associates’ new retail development — imposing a sales tax not only on shoppers at his properties, but also on customers at competing businesses — is raising eyebrows.
“I’ve never seen this happen in my life,” said David Cook, president of the United Food and Commercial Workers Local 655, which represents workers at the nearby Schnucks and Dierbergs grocery stores that would be included in the special taxing district. “At the end of the day, the criminal part here is you’re going to force employers to tax their customers to build their competition.”
The deal, blessed by the Wentzville Board of Aldermen in a series of meetings this spring and summer, would levy a 1% sales tax on shoppers through a community improvement district, or CID, along Wentzville Parkway. That tax, split 60% to the city and 40% to the developer, would support an estimated $38 million in debt issued to build a new recreation center on undeveloped farmland between William Dierberg Drive and Wentzville Parkway.
The portion of the sales tax pledged to the developer would underwrite bonds to pay $23 million worth of site work for Wentzville Bend Development LLC, a company connected to Kroenke lawyers Alan Bornstein and Jeffrey Otto of the Dentons law firm. A company listed in the development agreement with Wentzville, UTW Realty LLC, has had Bornstein, Kroenke and Otto as partners, according to a 2015 lawsuit from former Kroenke partner Michael Staenberg.
Reached by phone, Otto declined to comment. Bornstein did not respond to an email.
Wentzville Bend plans to develop half of the 60-acre parcel of undeveloped farmland into 130,000 square feet of retail, a 29,000-square-foot grocery store, four fast-food restaurants, a tire store, medical offices, a bank and hundreds of parking spaces. The city would develop the other half as a recreation center.
While city officials say they have only dealt with Bornstein and Otto, they concede Kroenke is probably an investor in the project.