A developer’s proposal to set up a community improvement district [CID] that would impose a special assessment on homeowners in a new Lake Saint Louis subdivision to help pay for infrastructure improvements drew a cool initial response from city elected officials.
But while cool, the city’s Board of Aldermen and Mayor Kathy Schweikert said discussions could continue between attorneys for the city and McBride & Son Homes, which is developing the more than 280-unit Wyndstone subdivision near Hwy. K, east of Duello Road.
Several attorneys representing McBride came before the Lake Saint Louis Board of Aldermen at its Sept. 5 work session to discuss the CID. They wanted to get a reading on whether the board wanted to continue the CID discussions. State law allows the property owner – McBride for now – to petition a municipality to establish a CID, which is a nonprofit corporation or separate political subdivision that can be created or the purpose of issuing bonds or levying taxes and applying a special assessment to finance public improvements.
The city approved a planned residential zoning designation and development plans for the subdivision last year after a voluntary annexation of the 102-acre site where it is being developed. The subdivision is one of the largest to be proposed in the city recently and the annexation may help Lake Saint Louis gain access to 38 acres of landlocked park property.
To establish a CID, the board of aldermen must certify the petition, hold a public hearing and adopt an ordinance. The CID can be in place for 20 years.
City Administrator Paul Markworth said McBride would pay the city’s legal fees in establishing the CID. McBride wants to issue a little over $1 million in bonds to reimburse the developer for project costs that could include streets, storm sewers and trees, Markworth said. The bonds would be paid off with a special annual assessment on CID property owners of $300 to $500.
The CID would be overseen by a district board of trustees whom the mayor can nominate and the board can approve. However, Patrick J. Eckelkamp, an attorney with Husch Blackwell Inc., representing McBride, said the city would not have any financial obligations or involvement.
“It’s a way to recoup some infrastructure costs from our own project,” said Katherine Moore, another attorney for McBride. “The city is not a party.”
But Schweikert along with aldermen Gary Turner and Gary Torlina [both Ward 1] and Alderman John Pellerito [Ward 3] questioned the city getting involved with a CID. Markworth said there are no CIDs set up for residential developments in the city.
Turner said the city requires escrow agreements to guarantee that the public improvements in the subdivision are completed. “I don’t know what the CID’s original purpose is, but to me what we’re being asked to do is bail out McBride [because] they didn’t do their estimate right on what it take to build this subdivision,” Turner said.
Turner also was concerned that, if the city does become involved because of its role in establishing a CID, it could become subject to any complaints property owners have about the development despite a separate board of trustees. Setting up a CID also may set a precedent that other developers might pursue, he said.
Eckelkamp said the purpose of the CID also allows for lower home prices because McBride can carry some costs of development for 20 years while being paid back by homeowner. He and Moore said homebuyers would be briefed about the CID assessment during buying discussions. “This is brought in front of them before they sign on the dotted line,” Moore said.
Moore said they don’t see how a CID would negatively affect the city or its taxpayers in anyway. She and Eckelkamp said attorneys could work out concerns as has been done with other McBride developments with CIDs in Jefferson and St. Louis counties. They asked that the talks could continue.
“There [are] no ‘yeas’ or ‘no’ or ‘maybe so,’” Moore said. “We’re asking if we can talk to our CID counsel and city staff and try to move forward with this endeavor.”
The board agreed to continue to talk. “I don’t have an issue with that, I have an issue with the whole issue,” Turner said.
The CID discussion occurred before a group of Heritage of Hawk Ridge subdivision residents questioned, during the board’s Sept. 5 meeting, as to whether contractors on the Wyndstone subdivision were conducting blasting t0 close to their homes. Blasting has rattled walls and development activity involving grading and lot preparation has kicked up dust, they said.
“Our quality of life has really gone down as a result, it’s very sad,” said Dan Shreve, a homeowner. “And then they come up and ask for additional financing through bonds so they can develop more property. They are not being good neighbors. There is no upside as a city to sponsor their bonds, it’s just going to cause us problems and headaches. What it’s going to do for them is finance their project.”