Inclusive Economic Growth Incentives Plan, City of St. Louis Announces New Framework for How Developers May Obtain Project Subsidies

The City of St. Louis’ development agency, the St. Louis Development Corporation, recently announced a new framework it will use in awarding project subsidies to developers. The new framework, which is aimed at creating a clearer process for the public and the development community, will start being used over the coming months and is expected to be fully implemented in January 2023. The three types of development projects covered under this framework are residential, commercial, and mixed use.

The new framework requires developers to adhere to the following step by step process in order to apply for project subsides:

  1. Submit an application to the St. Louis Development Corporation (“SLDC”).
  2. Have the project scored using the Community Benefits Scorecard.
  3. Have the project evaluated by a rate of return analysis to determine the potential return with and without assistance.
  4. Have the project reviewed to determine the impact on taxing jurisdictions and the projected net benefit resulting from the development occurring.
  5. SLDC evaluation of the developer that includes looking at the developer’s previous projects, compliance with past development agreements, and the developer’s outstanding tax liabilities.
  6. Negotiation with SLDC staff to identify opportunities for additional community benefits and other modifications that will allow the project to receive an improved score.
  7. Possibility of developer having to participate in a neighborhood engagement process to ensure input from the community based on the score earned from Community Benefits Scorecard and scale of the project.
  8. Enter a development agreement based on the scale of the project and score earned on the Community Benefits Scorecard, which may include provisions such as clawbacks, minority business subcontracting requirements, and other community investment requirements.
  9. Provide regular reports and documentation for ongoing compliance through the lifecycle of the incentives.

What is the Community Benefits Scorecard?

A vital part of this new framework is the use of the “Community Benefits Scorecard” to score a developer’s project. The scorecard states the minimum score a project must earn in order to be eligible for a development subsidy and also sets the maximum subsidy amount a project can receive based on the score earned.

For all projects not seeking Tax Increment Finance (“TIF”) incentives, a minimum score of 30 is required to be eligible for some type of subsidy, and a score of 51 and over allows for the possibility of earning the highest possible subsidy amount. The minimum and maximum amount of subsidy that can be awarded for each type of project is as follows:

  • Residential projects scoring between 30-50 points are eligible to receive up to a 10 year tax abatement term at 80% of the assessed value of incremental improvements, plus 10 years at 50%. Residential projects scoring 51 points or higher are eligible to receive up to a 10 year tax abatement term at 90% of the assessed value of incremental improvements, plus 15 years at 50%.
  • Commercial or mixed use projects scoring between 30-50 points are eligible to receive up to a 10 year tax abatement term at 80% of the assessed value of incremental improvements, plus 5 years at 50%. Commercial or mixed use projects scoring 51 points or higher are eligible to receive up to a 10 year tax abatement term at 90% of the assessed value of incremental improvements, plus 10 years at 50%.

If a project is seeking TIF incentives, the scorecard will only determine eligibility for incentives and not the amount of incentives. TIF projects must obtain a score of 51 points or higher to be eligible for incentives.

Scorecard Scoring Categories

Developers wanting to maximize their chances of obtaining a development subsidy will want to earn the highest possible score for their project. In order to do so, developers should be familiar with the scorecard before submitting an application to the SLDC for their project.

It is important for developers to realize that the type of scorecard used to score a project changes based on whether the project is commercial, residential, or mixed use. Specifically, developers should know that the maximum amount of points a project can earn and the scoring categories on the scorecard differ based on the type of project. Commercial projects can earn a maximum of 102 points from 15 scoring categories, residential projects can earn a maximum of 127 points from 11 scoring categories, and mixed used projects can earn a total of 152 points from 16 scoring categories.

Below are the scoring card categories for commercial, residential, or mixed used projects.

  1. Residential Scoring Card Categories
  • Capital Investment: up to 7 points can be awarded based on the total amount invested by the developer.
    • 1-2 Million = 1 point
    • 2-5 Million = 2 points
    • 5-7 Million = 3 points
    • 7-30 Million = 4 points
    • 30-50 Million= 5 points
    • 50-80 Million = 6 points
    • Over 80 Million= 7 points
  • Public Infrastructure Improvements: up to 10 points can be awarded if the project makes additional investments in public infrastructure such as sidewalks, streetscape improvements, public lighting, and transit amenities that are consistent with existing neighborhood plans and objectives. Points are based on the value of the public infrastructure.
    • $10,000- $20,000= 1 point
    • $20,000 - $50,000= 4 points
    • $50,000 - $100,000 = 7 points
    • Over $100,000 = 10 points
  • Walkability: up to 5 points can be awarded for a project’s proximity to amenities within walking distance. SLDC will use Walkscore.com to evaluate projects for this category, but it is anticipated that new methods will be developed in the future which will focus on a project’s proximity to key locations like schools, grocery stores, parks, and more.
    • 0-49 = 0 points
    • 50-69 = 3 points
    • 70-100 = 5 points
  • Transit Access: up to 7 points can be awarded to projects located within ¼ mile and ½ mile of a public transit stop.
    • ¼ mile to ½ mile = 4 points
    • ¼ mile or less = 7 points
  • Geography: up to 30 points can be awarded to projects located in areas of high need and opportunity that have experienced historic disinvestment. SLDC will utilize a separate mapping tool, such as the Economic Justice Index or similar approved plan, to identify specific geographic areas of the community that are priorities for investment. Each geographic area will have a different point value based on the need for investment.
    • EJI-5 = 0 points
    • EJI-4 = 5 points
    • EJI-3 = 10 points
    • EJI-2 = 20 points
    • EJI-1 = 30 points
  • Minority or Women Owned Business: 5 points will be awarded to applicants that are certified as a minority owned business or women business enterprise.
  • Infill Development: 3 points will be awarded to projects that include development of undeveloped land or the redevelopment of an existing building that will create higher density in terms of total commercial or residential square footage. To qualify, a parcel must already have access to sewer and water infrastructure.
  • Environmental Remediation: 3 points will be awarded to projects located on sites that represent a threat to public health and require additional financial assistance to cover cleanup costs. SLDC staff will evaluate projects on a case-by-case basis.
  • Historic Preservation: 2 points will be awarded to projects that include the restoration or preservation of a registered historic site.
  • Outside Funding: 3 points will be awarded to projects that include outside funding from state, federal, and nonprofit grant programs.
  • Affordable Housing: up to 50 points can be awarded to projects that include affordable housing units based on the percentage of total units that are considered affordable and the cost of those units.

2. Commercial Scoring Card Categories

  • Capital Investment: up to 7 points can be awarded based on the total amount invested by the developer.
    • 1-2 Million = 1 point
    • 2-5 Million = 2 points
    • 5-7 Million = 3 points
    • 7-30 Million = 4 points
    • 30-50 Million= 5 points
    • 50-80 Million = 6 points
    • Over 80 Million= 7 points
  • Public Infrastructure Improvements: up to 8 points can be awarded if the project makes additional investments in public infrastructure such as sidewalks, streetscape improvements, public lighting, and transit amenities that are consistent with existing neighborhood plans and objectives. Points are based on the value of the public infrastructure.
    • $10,000- $20,000= 1 point
    • $20,000 - $50,000= 3 points
    • $50,000 - $100,000 = 5 points
    • Over $100,000 = 8 points
  • Total Jobs Created: up to 9 points can be awarded based on the total number of permanent jobs that will be created on-site once the proposed project is completed.
    • 1-5 jobs = 5 points
    • 6-20 jobs = 6 points
    • 21-40 jobs = 7 points
    • 41-60 jobs = 8 points
    • 61+ jobs = 9 points
  • Quality Jobs: 3 points will be awarded to projects that pay at least 80% of its permanent employees a living wage rate of $14.39 per hour plus at least $4.60 per hour in health benefits, or $18.99 per hour if health benefits are not offered. Living wage and benefit standards will be updated regularly based on the city’s living wage policies and goals.
  • Target Industry: 3 points will be awarded to projects for businesses that are identified as "target industries" by the City of St. Louis.
    • Target industries currently include: geospatial, financial technology, agricultural technology, biotechnology, logistics & transportation, healthcare, information technology, and advanced manufacturing.
  • Walkability: up to 3 points can be awarded for a project’s proximity to amenities within walking distance. SLDC will use Walkscore.com to evaluate projects for this category, but it is anticipated that new methods will be developed in the future which will focus on a project’s proximity to key locations like schools, grocery stores, parks, and more.
    • 0-49 = 0 points
    • 50-69 = 1 point
    • 70-100 = 3 points
  • Transit Access: up to 5 points can be awarded for projects located within ¼ mile and ½ mile of a public transit stop.
    • ¼ mile to ½ mile = 3 points
    • ¼ mile or less = 5 points
  • Geography: up to 30 points can be awarded to projects located in areas of high need and opportunity that have experienced historic disinvestment. SLDC will utilize a separate mapping tool, such as the Economic Justice Index or similar approved plan, to identify specific geographic areas of the community that are priorities for investment. Each geographic area will have a different point value based on the need for investment.
    • EJI-5 = 0 points
    • EJI-4 = 5 points
    • EJI-3 = 10 points
    • EJI-2 = 20 points
    • EJI-1 = 30 points
  • Minority or Women Owned Business: 5 points will be awarded to applicants that are certified as a minority owned business or women business enterprise.
  • Infill Development: 5 points will be awarded to projects that include development of undeveloped land or the redevelopment of an existing building that will create higher density in terms of total commercial or residential square footage. To qualify, a parcel must already have access to sewer and water infrastructure.
  • Existing Vacant Building Renovation: 5 points will be awarded to projects that utilize previously vacant buildings.
  • Façade Improvements: 5 points will be awarded to projects that include significant improvements to the façade of an existing commercial building.
  • Environmental Remediation: 5 points will be awarded to projects on sites that represent a threat to public health and require additional financial assistance to cover cleanup costs. SLDC staff will evaluate projects on a case-by-case basis.
  • Historic Preservation: 2 points will be awarded to projects that include the restoration or preservation of a registered historic site.
  • Outside Funding: 3 points will be awarded to projects that include outside funding from state, federal, and nonprofit grant programs.

3. Mixed Use Scoring Card Categories

  • Capital Investment: up to 7 points can be awarded based on the total amount invested by the developer.
    • 1-2 Million = 1 point
    • 2-5 Million = 2 points
    • 5-7 Million = 3 points
    • 7-30 Million = 4 points
    • 30-50 Million= 5 points
    • 50-80 Million = 6 points
    • Over 80 Million= 7 points
  • Public Infrastructure Improvements: up to 8 points can be awarded if the project makes additional investments in public infrastructure such as sidewalks, streetscape improvements, public lighting, and transit amenities that are consistent with existing neighborhood plans and objectives. Points are based on the value of the public infrastructure.
    • $10,000- $20,000= 1 point
    • $20,000 - $50,000= 3 points
    • $50,000 - $100,000 = 5 points
    • Over $100,000 = 8 points
  • Total Jobs Created: up to 9 points can be awarded based on the total number of permanent jobs that will be created on-site once the proposed project is completed.
    • 1-5 jobs = 5 points
    • 6-20 jobs = 6 points
    • 21-40 jobs = 7 points
    • 41-60 jobs = 8 points
    • 61+ jobs = 9 points
  • Quality Jobs: 3 points will be awarded to projects that pay at least 80% of its permanent employees a living wage rate of $14.39 per hour plus at least $4.60 per hour in health benefits, or $18.99 per hour if health benefits are not offered. Living wage and benefit standards will be updated regularly based on the city’s living wage policies and goals.
  • Target Industry: 3 points will be awarded to projects for businesses that are identified as "target industries" by the City of St. Louis.
    • Target industries currently include: geospatial, financial technology, agricultural technology, biotechnology, logistics & transportation, healthcare, information technology, and advanced manufacturing.
  • Walkability: up to 3 points can be awarded for a project’s proximity to amenities within walking distance. SLDC will use Walkscore.com to evaluate projects for this category, but it is anticipated that new methods will be developed in the future which will focus on a project’s proximity to key locations like schools, grocery stores, parks, and more.
    • 0-49 = 0 points
    • 50-69 = 1 point
    • 70-100 = 3 points
  • Transit Access: up to 5 points can be awarded for projects located within ¼ mile and ½ mile of a public transit stop.
    • ¼ mile to ½ mile = 3 points
    • ¼ mile or less = 5 points
  • Geography: up to 30 points can be awarded to projects located in areas of high need and opportunity that have experienced historic disinvestment. SLDC will utilize a separate mapping tool, such as the Economic Justice Index or similar approved plan, to identify specific geographic areas of the community that are priorities for investment. Each geographic area will have a different point value based on the need for investment.
    • EJI-5 = 0 points
    • EJI-4 = 5 points
    • EJI-3 = 10 points
    • EJI-2 = 20 points
    • EJI-1 = 30 points
  • Minority or Women Owned Business: 5 points will be awarded to applicants that are certified as a minority owned business or women business enterprise.
  • Infill Development: 5 points will be awarded to projects that include development of undeveloped land or the redevelopment of an existing building that will create higher density in terms of total commercial or residential square footage. To qualify, a parcel must already have access to sewer and water infrastructure.
  • Existing Vacant Building Renovation: 5 points will be awarded to projects that utilize previously vacant buildings.
  • Façade Improvements: 5 points will be awarded to projects that include significant improvements to the façade of an existing commercial building.
  • Environmental Remediation: 5 points will be awarded to projects on sites that represent a threat to public health and require additional financial assistance to cover cleanup costs. SLDC staff will evaluate projects on a case-by-case basis.
  • Historic Preservation: 2 points will be awarded to projects that include the restoration or preservation of a registered historic site.
  • Outside Funding: 3 points will be awarded to projects that include outside funding from state, federal, and nonprofit grant programs.
  • Affordable Housing: up to 50 points can be awarded to projects that include affordable housing units based on the percentage of total units that are considered affordable and the cost of those units.

The Government Solutions and Real Estate Practice Group at Lewis Rice frequently works with various developers throughout the region. For more information regarding this new framework, please contact a Lewis Rice attorney.