Friday, September 24, 2010

Congratulations to MVVA Team, Winner of The City + The Arch + The River 2015 Competition!

The selection of the team helmed by Michael Van Valkenburgh Associates as the winner of The City + The Arch + The River 2015 international design competition marks a key milestone in the decades-long effort to revitalize the Arch grounds. For a detailed look at MVVA's plans for reconnecting the City of St. Louis to the Arch grounds and the riverfront, go here and/or watch the video below:

As would be expected (no matter which team won), there is a wide range of opinion as to whether the competition jury selected the best design. Personally, in my first reaction to the release of the designs, I tweeted that I liked MVVA's design the best, primarily because it seemed to me to be the most compatible with City to River's longer-term proposal to replace the downtown highway with a boulevard.  In subsequent weeks, though, I had MVVA considerably further down the list.

Having had several days to dig back into MVVA's design, I have to say that I am really excited with the outcome of the competition. In the relatively near future, among other improvements we can expect to see (subject to design changes):
  • A westward-facing, street-level entrance to a significantly expanded underground museum;
  • Removal of the existing parking garage at the northern end of the Memorial, creating access to walkable portals through the Eads Bridge to Laclede's Landing;
  • New spaces and improvements to enjoy at the northern end of the Memorial, including play areas for children, shaded seating areas, a large earthen amphitheater (better placed, in my opinion, than the theaters proposed for the east side of the river), and a new Gateway Urban Ecology Center;
  • A new, well-designed Cathedral Square next to the Old Cathedral, with an adjacent market pavilion and restaurant;
  • On the east side of the river, a bird sanctuary with treetop-level walkways above restored wetlands;
  • A riverside cobblestone plaza, intended to "accommodate a broader spectrum of markets, concerts, and seasonal attractions";
  • Smarter use of parking to activate the north, south, and west edges of the Memorial, and remote ticketing facilities intended to encourage visitors to explore downtown while waiting for their Arch tours to begin;
  • A seasonal beer garden and ice rink on the currently-underused south end of park, as well as better connections to the Choteau's Landing area;
  • Expanded space on the Eads Bridge for pedestrian and cycling use; and
  • A one-block "lid" over the depressed lanes of (soon-to-be-former) Interstate 70 with "noise mitigation hoods," intended to create a more pleasant pedestrian experience.
If these improvements are actually completed--and all indications are that key governmental and business players intend to ensure that they are--then I think the design competition will largely have fulfilled its mandate to "take one of our country’s first urban park sites, weave it into the city fabric, explore the role of Jefferson National Expansion Memorial as an active part of the downtown and a contributor to economic growth, celebrate the riverfront and mitigate the divisive ‘moat’ of transportation around the site." 

For those who think that the design is merely "safe," I think they have not considered the massive undertaking that is involved in completing the improvements described above, and are missing the bigger picture.  The design does, after all, have to be feasible within the parameters (temporal and otherwise) set by the design competition (without which nothing would be happening at all), and economic reality. 

Of course, what MVVA has proposed is a preliminary design, and there is room for improvement.  Over the next 90 days, the team will work with the National Park Service, the City, and key stakeholders to revise and refine the design.  Comments from the public are welcomed, so if you see something you don't like--or don't see something you do like--then now is the time to voice those opinions.

Interestingly, MVVA even appears to be open to incorporating design components from the other teams in the competition.  I wouldn't anticipate any of the big-ticket, eye candy items (think gondolas) working their way into the final design, but there is certainly room for (for example) better cross-river connections, better activation of Kiener Plaza, and better connections between the Memorial and downtown.

That last point may be the most exciting, as MVVA appears to be interested in designing in a way that is consistent with the broader goal of replacing the downtown highway with a boulevard.  As noted in the team's earlier design narrative, "We have proposed a one-block overpass, rather than an at-grade boulevard, because it is less expensive, easier to achieve by 2015, and would require fewer jurisdictional and regulatory negotiations. But the benefits of removing the highway altogether are clear, and we have purposely created a proposal that is compatible with either solution."  City to River has extended its congratulations to MVVA, and hopes to work closely with the team and other stakeholders in the upcoming months.

On balance, I think St. Louisans should be thrilled with where this competition has led, or that it even occurred at all (it being a monumental achievement in and of itself).  I have probably said it hundreds of times and I will say it again--this is an incredibly exciting time for St. Louis.  Thanks to the organizers of the design competition, and congratulations to MVVA and its team members!

Thursday, September 23, 2010

Dear Tax Credit Review Commission: Please Do No Harm

On Tuesday, I attended a portion of the meeting of the Missouri Tax Credit Review Commission at the Old Post Office.  The Commission, appointed by Governor Nixon, is charged with "review[ing] the state's 61 tax credit programs and mak[ing] recommendations for greater efficacy and enhanced return on investment."  Due to time constraints (mine, not the Commission's), I was unable to give the testimony I had prepared for the meeting.  Luckily, the Commission is accepting testimony by mail and e-mail (see this post for information on how to contact the Commission). 

Here are the comments that I have delivered to the Commission:

Missouri Court of Appeals, Eastern District
En Banc Courtroom
One Post Office Square
As I’m sure the members of the Commission know, Missouri has what is widely hailed as the best, most effective historic tax credit ("HTC") program in the entire nation. Missouri's program has been dubbed a "national model" for economic development by the Wall Street Journal. Respected preservationist and real estate consultant Donovan Rypkema has stated that "the Show Me State has shown the rest of the country how to attract private capital into our historic buildings." The credits have long been recognized as a key economic driver of the state’s economy.

According to a March 2010 evaluation of the program by the Missouri Growth Association, economic impacts of the program include $670 million in new sales/use and income taxes for state and local governments, $2.9 billion in leveraged private investment, significant property tax collections, $75 million in earnings tax revenue in St. Louis City and Kansas City, and significant job impacts. The MGA concluded that the program "pays for itself in economic impacts to the state."

Governor Nixon's own executive branch--if not the governor himself--recognizes these benefits.  Until very recently, the Missouri Department of Natural Resources' website continued to call historic preservation "a major source of new jobs and additional revenue for municipalities, counties, and the state itself," with the economic benefits of the credits "extend[ing] far beyond the initial investment in buildings and communities."

The job-creating impacts of historic preservation in Missouri also are significant. The 2010 MGA report concluded that the HTC program is associated with 43,150 new or retained jobs with an average salary of $42,732. The program is believed to be indirectly responsible for tens of thousands of more jobs.  Annual job growth associated with HTC projects is higher than expected, with higher than expected increases in "high-paying sustainable jobs." In this economic climate, it is critical that we act very carefully in changing any program that has such a clear history of creating jobs.

An analysis of the benefits of the Missouri historic tax credits is not complete without taking into account the corresponding benefits of federal tax credits. As detailed in the 2010 "First Annual Report on the Economic Impact of the Federal Historic Tax Credit," Missouri ranks #1 in federal tax credit-aided historic rehabilitation, with $419 million of such rehabilitation in fiscal year 2008. I won’t go into all of the numbers (which you have surely seen before), but the national impacts of that one year of activity (in terms of jobs, income, and generated taxes) were immense. The in-state retention rate of those benefits was 76%. The benefits accruing to Missouri residents from the federal program—in other words, dollars that are invested in our own communities as opposed to being paid to the federal government or invested elsewhere—are a direct result of Missouri's own superlative program.

The HTC program has been a critically important component of the ongoing rejuvenation of the City of St. Louis, and downtown in particular. In downtown alone, more than 100 historic buildings were redeveloped in the last decade, with 4,400 new residential units coming online and 5,000 new downtown residents, making downtown "the fastest growing community in the St. Louis region." By the end of this year, over $5 billion dollars will have been invested in the redevelopment of downtown in the last decade, much of which could not have occurred without the HTCs used to help finance the high-cost rehabilitation of the City's historic buildings. There are numerous projects in St. Louis that very likely would not have occurred without historic tax credits, including the critical Washington Avenue corridor.

So, on a local level, Mayor Slay and others have rightly opposed changes to the HTC program that are likely to hinder continued urban development. Of course, HTCs benefit not only just large projects in downtown St. Louis.  Neighborhoods all over the city, and other communities all over the state, benefit from the program. As noted by one commentator, most historic tax credit projects in Missouri are undertaken not by large-scale redevelopers, “but rather [by] small homeowners and developers. . . . the independent 'mom and pop[s]' in communities across the state." With tens of thousands of eligible properties across the state, the benefits to smaller communites will only continue to increase over time.

A critical point to appreciate is that a mature, efficient market for HTCs is what allows Missouri's program to be so successful. As you know, Missouri HTCs are transferable to tax-paying corporations and individuals, allowing developers to obtain up-front cash for projects by selling the anticipated credits for a discount (typically $0.90 to $0.95 on the dollar). Purchasers know that the credits will be issued as long as apolitical, objective criteria are met, creating the certainty necessary for the tax credit market to thrive.

The Commission, the Governor, and the General Assembly need to carefully consider the extent to which changes to the program might affect this market. Measures such as lowered caps--and, even worse, subjecting the issuance of HTCs to appropriations--not only will cause direct negative impacts to rehabilitation efforts, but are likely have unintended and devastating effects on the entire program.

Indeed, significant damage already has occurred. This is partly the result of the “expanded review process” recently announced by the Department of Economic Development, that has resulted in developers having no clear sense of when or if final tax credit approvals will be obtained. This vague process, coupled with new program caps and other changes implemented recently and the governor's pursuit of further limits on historic tax credits, have created the uncertainty and confusion in the tax credit marketplace feared by supporters of the program. In a July 20th front page article, the Post-Dispatch reported that only $13.4 million in HTCs were authorized in the first half of 2010, down from $87.7 million in the first half of 2009. The number of applications fell by over 60% in the same period, with half of those "still awaiting approval."

That Post-Dispatch article is instructive on another point. The reporter noted that "a dozen local bankers, developers and others who work with historic tax credits" would not speak publicly "for fear of alienating the powerful state Department of Economic Development." Assume, now, that the HTC program is made subject to a political (or otherwise subjective) appropriations process. How can a market for tax credits--one that, in prior years, was held up as a national model and a key driver of the Missouri economy--function efficiently in that environment? Not surprisingly, it can't. As one prominent St. Louis architectural firm noted with respect to HTCs, “uncertainty = deal over."  And who is most likely to be hurt by new restrictions on the program?  Not the “fat cat developers” so disdained by some opponents of the program, but by the smaller, politically unconnected businesses across the state.

Hopefully the slowdown in restoring our state's historic assets is a temporary setback. Whether the harm done to the program will be made permanent is largely dependent on the recommendations given to the Governor by this Commission.

I understand that there are both benefits and costs to consider here. There is no question that the use of Missouri tax credits, including HTCs, has greatly increased over the last decade. I understand and appreciate the grave economic and budgetary times that many states, including Missouri, are going through. It is only sensible to evaluate the efficiency and return on investment not only of HTCs, but other tax credits and state programs.

But all tax credits and state programs are not equal. One way to distinguish the HTC program from at least some other programs is that it has been proven to work to the benefit of the state as a whole. The program has a long-term track record of achieving extremely beneficial results for the state in creating jobs, increasing tax revenues, and breathing new life into our historic communities and buildings. The Governor and state legislators should think long and hard about altering an extremely successful program which is the envy of many other states.

Consider also that tax credit-aided historic rehabilitation is consistent with a growing nationwide movement toward urban infill, conservation, and restoring the historic architecture of communities.  Particularly for younger generations (whom hold the keys to our state's future), there exists an ever-increasing demand for walkable, smart-growth communities, and disdain for abandoning the neighborhoods of our past in favor of continued sprawl (as opposed to real metropolitan growth).  I believe that, in coming years, these values will grow in importance to the businesses and workers that our state must be able to attract and retain to stay competitive in the national and global economies.

Rehabilitating our state's urban cores and historic communities is, then, an investment in Missouri's future--an investment that has been proven to be returned to the state many times over.  We simply cannot risk hobbling our HTC program at exactly the wrong time, particularly when other states (including neighbors Kansas and Iowa) are making positive changes to their own HTC programs.  To the extent Missouri's HTC program becomes less attractive to tax credit purchasers, Missouri's economy will lose investments to other states that would have been made in our own communities. And to the extent Missouri's cities fail to become the type of cities that an increasingly mobile workforce wants to live and work in, the state as a whole will suffer.

I would like to express one thing directly to the educators on the Commission. As I'm sure you do, I believe that the most important work of our state government is to ensure the education of our children. If I truly believed that a dollar given as HTCs was a dollar going into a “fat cat developer’s” pocket at the expense of a child, I would have no problem saying that, despite its benefits, the program is not worth the cost.

I simply don’t believe that that is true. I would encourage the commission to look past the “zero sum game” characterizations of the program used by the Governor and the Department of Economic Development. This is not an either-or situation. In order for development interests to "win," it is not necessary for educational (or, for that matter, rural) interests to "lose." As noted in the MGA report, "the value of credits issued are far less than the volume of private investments that otherwise would not have been created." These investments lead to additional economic benefits for the state, including tax revenues (used for education, among other things) that would not have existed but for the development activity. 

In conclusion, I would simply note that the charge of this Commission is to review each of our state’s tax credit programs and to recommend changes as necessary. With respect to the HTC program, I would suggest that the only change that is necessary is to restore the certainty that previously allowed historic redevelopment efforts to thrive across the state. I would respectfully request that the Commission recommend to the Governor and the General Assembly that the historic tax credit program otherwise remain unmodified.

Thank you for your consideration.

Friday, September 17, 2010

Voice Your Support for the Missouri Historic Tax Credit Program

Over the summer, I posted some updates on efforts to "reform" Missouri's historic tax credit ("HTC") program, as part of Governor Nixon's proposed overhaul of all of the state's tax credits "from scratch."  As I noted then, the uncertainty created in the tax credit market by these efforts, including the Department of Economic Development's intentional slowing of the issuance of HTCs through a new undefined "expanded review process," appears to have had a significantly detrimental effect on the program.  In July, the Post-Dispatch reported a substantial decrease in the HTCs authorized by the DED, from $87.7 million in the first half of 2009 to only $13.4 million in the first half of 2010.

A temporary slow-down in the program is bad enough; enacting changes that permanently damage our successful and nation-leading program would be tragic.  In a recent e-mail, the director of the Missouri Coalition for Historic Preservation and Economic Developmentwhich has been working behind the scenes directly with legislatorsnoted the "strong possibility the recommendation [by the new Missouri Tax Credit Review Commission] to the Governor will be to significantly reduce the cap or alter the program so much that there will be very little predictability and we could see the program die in the future."

For those who are involved in and support the redevelopment of our state's many historic assets through HTCs, now is the time to voice your support for the HTC program and your opposition to changes by the General Assembly that would be likely to hobble the program.  Here are some easy ways to help:

1.  Attend one of the remaining regional meetings of the Missouri Tax Credit Review Commission toin the words of the National Trust for Historic Preservation"voice that more cuts to the existing Historic Tax Credit Program will only reduce state revenues and kill more jobs, and that surrounding states are increasing their historic tax credit caps to create jobs."  Those opposed to HTCs (and other tax credits) such as the Show-Me Institute will be attending these meetings to argue "the costs and negative consequences of tax credit programs in Missouri," so it is important that plenty of people supporting HTCs attend as well.

The regional meetings in Kansas City, St. Joseph, and Joplin have already been held. Two other regional meetings are listed below, with a final meeting in Columbia yet to be scheduled. Public comments will be heard at the meetings below from 4:00 p.m. to 6:00 p.m. and 7:00 p.m. to 9:00 p.m.

Monday, September 20th

John and Betty Glenn Convocation Center
Southeast Missouri State University, River Campus
One University Plaza
Cape Girardeau, MO 63701

Tuesday, September 21st

Missouri Court of Appeals, Eastern District
En Banc Courtroom
One Post Office Square
815 Olive Street
St. Louis, MO 63101

2.  If you cannot attend a regional meeting, you can forward your comments to the Coalition at and they will present them to the Commission for you.

3.  Send an e-mail to all of the commission members expressing your support for the HTC program.  E-mails for all of the members of the Commission can be found here.  Even more simply, the National Trust for Historic Preservation has created an e-mail template for supporters to use.

4Encourage others to voice their support for the HTC program and their objections to any changes that will decrease the availability and certainty of HTCs in the future.

To read the Coalition's press release on the Tax Credit Review Commission and some of the proven benefits of HTCs, continue reading below.

Monday, September 6, 2010

A Week of Festivals

There has been no shortage of "festivals" in St. Louis over the last week.  Perhaps most excitingly, Forest Park hosted the first LouFest Music Festival, featuring two days of music in what is almost certain to become a hugely popular annual event.  On the blues scene, St. Louis Bluesweek celebrated its Bluesweek Festival outside the Peabody Opera House last weekend, and its Blues "Cruise" in Soulard went head-to-head with the Big Muddy Blues Festival this weekend. 

Cultural festivals were celebrated throughout the City as well, starting with last weekend's Festival of Nations in Tower Grove Park.  This weekend, St. Louisans enjoyed the Japanese Festival in the Missouri Botanical Gardens, and the popular (and crowded!) Greek Festival at St. Nicholas Greek Orthodox Church.

Here are a few pictures from some of the festivities:

The first LouFest Music Festival, in Forest Park

Jeff Tweedy puts on a stellar solo performance at LouFest

The market at Festival of Nations, Tower Grove Park

Scottish caber toss at Festival of Nations

Girl poses at Japanese Festival,
Missouri Botanical Gardens

Japanese Drum
Bluesweek Festival, Peabody Opera House

Greek Festival, St. Nicholas Greek Orthodox Church