Eagle-Eyed Resident Spots $20M Error in Analysis of Controversial U City Project

By on February 5, 2019

From St. Louis Business Journal:  A controversial $190 million University City development could generate around $30 million in tax revenue for the city through 2041.

But a mistake in a cost analysis of the project led the city to believe it would generate much more tax revenue — as much as $53 million — during that time.

That figure is critical for a project that would use that tax revenue to pay down the $70.5 million in bonds being requested by the developer.

University City Manager Gregory Rose acknowledged the error in the report and said the city is still pleased by the amount of revenue the project would generate. But the mistake — spotted by an eagle-eyed citizen — adds a new layer of controversy to a project already criticized over a lack of transparency.

Novus Development is proposing a mixed-use development at Olive Boulevard and Interstate 170 consisting of 358,000 square feet of retail, 240,000 square feet of apartments and 20,000 square feet of Class A office space.

The project is expected to cost $189.4 million and Novus has requested $70.5 million in tax increment financing, or TIF. It also reached a deal with the city to include 50 percent tax abatement and an agreement that all new sales taxes generated by the development would be used toward repaying the TIF bonds, rather than just the 50 percent required by law.

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