Crystal City Hall was packed Monday night with supporters for the James Hardie Industries manufacturing plant to be built on the former Festus Municipal Airport site in Crystal City.
A public hearing on the Airport Road Redevelopment Area Development Plan for the $400 million Hardie facility was held that night before the start of the regular Crystal City Council meeting, when council members ultimately voted to approve the plan.
Surprisingly, Jefferson R-7 Superintendent David Haug was among the supporters at the public hearing and council meeting. Just days earlier he had asked the Crystal City Council to delay voting on the redevelopment plan and put out a call to action to R-7 residents, asking them to attend the meeting and voice their concerns about the plan, which calls for tax abatements for the Hardie project.
Points of contention
After Crystal City held a Sept. 14 informational town hall meeting, Haug posted a now-private, approximately 18-minute-long video to YouTube and the school’s Twitter feed titled “Urgent 11.5 million dollar tax abatement proposal on Jefferson R-7 students.”
In the video, Haug said he still had too many questions about the project and tax abatement plan and wanted Crystal City to delay the vote until he could learn more about it.
Haug referred to the tax abatement as a “projected loss of 11.5 million dollars for our students.”
Crystal City Administrator Jason Eisenbeis refuted that claim in a Sept. 21 letter to Haug.
“There is no loss of revenue to the R-7 School District,” Eisenbeis said in the letter. “The property is currently producing approximately $42,744.90 annually in tax revenue for all tax districts. Even with the abatement, the proposed redevelopment will produce many multiples of additional revenue for the R-7 School District – therefore, referring to a loss of revenue is misleading.”
Eisenbeis said the James Hardie plant site currently is undeveloped and would bring in an estimated $659,852 in revenue for Jefferson R-7 over the 20-year term of the abatement if left undeveloped.
However, if the Hardie plant is built there, even with the tax abatement, the property would produce $10,057,516 in revenue, an additional $9,397,664, for the school district over the 20-year period.
Eisenbeis also reiterated multiple times that the tax abatement would only be for real estate taxes, while personal property tax would remain fully taxed. The 1.25 million-square-foot facility would be filled with high-value equipment and products and likely would have a hefty personal property tax bill, with estimates at around $12 million over 20 years.
In addition to receiving the projected $10 million in real estate taxes, along with its share from the projected $12 million in personal property taxes, the Jefferson R-7 district also will be the largest recipient of PILOT (Payments In Lieu of Taxes) among all the impacted taxing districts, including Crystal City, Jefferson County, Jefferson R-7, Jefferson College, the Festus Special Road District, the Joachim-Plattin Ambulance District, the Jefferson County Health Center, the Jefferson County Community Mental Health Board, Developmental Disability Advocates and the state of Missouri. The amount of the PILOT payments has not yet been disclosed.
As part of the city’s abatement incentive offer, Hardie also agreed to pay an annual charitable contribution to the Crystal City School District or a foundation set up for the benefit of the Crystal City School District. The charitable contribution is a contractual obligation separate from the Chapter 353 abatement and the PILOTs to go to taxing districts.
In Haug’s Sept. 14 letter, he said he was worried the plant could cause an influx of residents and their school-age children to the R-7 district, which he feared the district could not handle, even with the infusion of tax dollars from the Hardie development.
Eisenbeis said Hardie representatives expect most of the 238 new jobs to be filled by current local residents.
“Hardie said 75 percent of their workforce is hired off the street, so where those folks come from, I think it’ll be regional. They could be as far as Cape Girardeau and as far as North St. Louis,” Eisenbeis said. “We’re hopeful they’re Jefferson County residents. Crystal City expects that.”
“When you have an average pay of $34 an hour, you’ll have people commuting in,” Crystal City Mayor Mike Osher added.
Not going through with the tax abatement wasn’t an option if the city wanted the Hardie project to move forward.
Not only was it part of the incentive package for Hardie to come to Crystal City – a package the state, county, city, and Port Authority worked out – but also eligibility for the Business Use Incentives for Large-Scale Development (BUILD) program depended on it.
According to the Missouri Economic Development Department’s website, to be eligible for BUILD, the project requires “Cooperative Effort” from local government: “The political subdivisions benefiting from the project or other local entities must commit significant local incentives relative to their economic benefit compared to the state. Such incentives may include tax abatement, discounted utility fees or others, to the extent allowed by law.”
In Crystal City’s case, tax abatement was the agreed-upon Cooperative Effort.
Resolution found
In a follow-up video Haug posted on Monday, just hours before the Crystal City Council meeting, he said he had changed his stance and was on board with the proposed tax abatement.
“I believe our concerns have been heard and we’ve been able to view a larger view of the project with specific numbers that have been shared with me. The James Hardie project will be an asset to the R-7 School District,” he said. “As a representative of the Jefferson R-7 School District, I will not speak at tonight’s hearing with any more questions or concerns. I believe that process has been worked through. I think there’s a great start and I have nothing left on the table to address at this time.”
Haug said the city and county had met with him and showed him additional information about expected personal property taxes as well as upcoming road construction projects in the area near the school.
“I was impressed with the thoughtfulness of the county to address the roads they need to make James Hardie’s project work, but also the thoughtfulness of the impact of our school district and specifically our students,” he said.
Haug also spoke briefly at the City Council meeting, sharing his support for the project to move forward.
Others who spoke in support of the tax abatement included County Executive Dennis Gannon, Crystal City Board of Education member Linda Schilly, Jefferson County Port Authority executive director Jim McNichols, District 5 County Council Member Scott Seek, as well as a representative from Crown Plastics (a plastic fabrication company also located on Airport Road), and several residents.
In addition, Jefferson College President Dena McCaffrey wrote a letter of support.
Osher said he was pleased to see the positive response from the crowd.
“I think our meeting went very well. It was very professional from both sides. Everybody who spoke was welcomed. The Council listened. It was a good rapport and I look forward to more successful meetings in the future.”
Following the public hearing, the Crystal City Council voted 7-0 in favor of an ordinance that designated certain tracts of land in the proposed development area as blighted; approved the Airport Road Redevelopment Area Development plan; approved a redevelopment agreement in connection with the development plan; and authorized the city of enter into a redevelopment agreement and take certain other actions in connection with the development. Ward 4 Councilmember Winkelman was absent at the time of the vote.
