8.jpg

About THF

THF in the News

08.01.2008

New Beginnings

New Beginnings

On Aug. 1, 2009, Chesterfield, Mo., will mark the 16th anniversary of the Great Flood of 1993, an event that left Chesterfield Valley, a district the city envisioned as a potential engine for future economic growth, under 10 feet of water. To recover from the flood, a public-private partnership used tax increment financing (TIF) to restore the developmental viability of the valley to its pre-flood level. Exceeding officials' original projections of economic potential, by the end of 2007, the TIF was retired 10 years ahead of schedule.

Chesterfield Valley was surrounded by burgeoning suburbs to the east, north and south in St. Louis County and to the west in St. Charles County. Less than a year after the flood, Chesterfield began its restoration process, establishing a $75 million TIF district to fund infrastructure improvements, including buttressing the Monarch Levee, which was breached during the flood. The TIF captured 50 percent of the new sales and utility tax revenues and 100 percent of the new property tax revenue generated by development in the district. It had a projected expiration of 2017.

The TIF's success could be attributed to several factors:

  • Finding a well-financed developer partner. The city contracted with a developer to determine the future use of the site and its potential risks.
  • Committing to spend all TIF proceeds on public infrastructure improvements and not site improvements, which were paid for by private investment. City officials worked with the Monarch-Chesterfield Levee District to improve the levee and adopted a reconstruction plan that included a new overpass, road and drainage improvements, and water and sewer line extensions.
  • Securing support from each of the jurisdictions in the district before establishing the TIF and updating each throughout the process. When the revenues began to exceed projections, the city agreed to pass excess income to the jurisdictions even before the TIF was closed.
  • Increasing the Chesterfield Valley area's identity, value and attractiveness as a business and retail center by branding the area and targeting nearby population centers and business owners.
  • Modifying the development plan to include more high-density commercial office space for daytime workers and sustain a large amount of retail, and encouraging office developments to increase the number of residents working and shopping in the area.

City officials and developers shaped a massive, mixed-use, retail-oriented property that would link the nearby suburbs. The $275 million Chesterfield Commons, which prompted the development of the Chesterfield Valley area, is a 380-acre development with 2 million square feet of retail space and 2.58 million square feet of commercial space.

Its success accelerated the TIF's retirement. More than 12,000 people now are employed in Chesterfield Valley, which contains a total of 6.4 million square feet of constructed space. The development houses 860 active businesses, compared to 240 before the flood. It has an assessed property value of $176 million compared to $18.5 million before the flood. By deploying creative economic development tools, the city was able to breathe new life into its future.