DANFORTH PUSHES TAX CHANGES – 9 Apr 1988 P-D

A deteriorating four-family flat in the Shaw neighborhood was just what U.S. Sen. John C. Danforth, R-Mo., came to St. Louis to see Friday.

Touring the area with some neighborhood and city boosters, Danforth touted his proposal in the Senate to restore some tax incentives for restoring older buildings and for setting up housing for the poor. The incentives were eliminated by the Tax Reform Act of 1986.

The building that Danforth saw Friday is a vacant brick flat at 3836 Shaw Avenue; it was built in 1905 and illustrates what Danforth wants to change.

A development group had financing and was set to renovate the building for apartments when the tax revision bill was enacted, taking away tax shelters and benefits that developers had used for years, said Brian Murphy, director of the city’s Community Development Agency.

”Under the new laws, the financing just would not work, and they were not able to do the project,” Murphy said.

Dana Hines, president of the Shaw Neighborhood Improvement Association, said the story had been repeated throughout the South Side neighborhood. She ticked off statistics to back up her concern.

Since 1981, about $14 million has been spent to renovate 250 housing units in Shaw. In 1986, the year before the Tax Reform Act took effect, about 60 units were renovated; last year, 18 units were done. And the developer of those 18 units got federal block grant money, Murphy said.

Danforth said the tax overhaul – which he voted against – had caused severe problems in St. Louis, once a national leader in historic preservation.

He said housing renovation had declined nearly 50 percent in St. Louis – to 480 units last year from 928 units in 1986. He called the trend, on a national scale, a ”scandal” in light of the number of people who are homeless.

Tax revision made renovation less lucrative for developers by lengthening depreciation schedules, reducing the amount of tax credits and changing the treatment of losses. Investors and developers are now banned from deducting certain renovation costs, tax credits and project losses from their income.

Danforth’s proposal has the support of several national historic preservation groups; a companion measure has been introduced in the House. But he said no major changes in the tax code would be made probably for at least a year.

The proposal, introduced Feb. 25, would:

Allow some tax credits for renovation costs and low-income housing to be deducted from income.

Increase a cap on the amount of tax credits allowed individual investors for certain types of housing projects to at least $20,000 from $7,000.

Loosen restrictions that bar non-profit groups from joining with private investors in financing housing projects.

Carolyn Toft, executive director of the Landmarks Association of St. Louis Inc., said of Danforth’s proposal: ”I think it’s dandy, and that it’s critical that we rehab the rehab tax credits.”

COURT IS ASKED TO VOID PLAN FOR SOUTH GRAND – 31 Mar 1988 P-D

A business executive on South Grand Avenue has asked the St. Louis Circuit Court throw out a redevelopment plan on grounds that a key contract was signed more than 14 months late.

The issue concerns the Grand-Shaw Redevelopment Corp., which proposes renovation and some new construction along the west side of Grand near Shenandoah Avenue. The plan helped prompt the attempt to recall Alderman John Koch, D-8th Ward, in 1984.

The lawyer for Gary Sandstedt, a businessman who has refused to sell his building at 2241 Grand to the redeveloper, filed a motion Monday in St. Louis Circuit Court asking that the whole plan be thrown out. Sandstedt filed suit in August 1987 challenging the developer’s attempt to take his property through condemnation.

Sandstedt was a leader in the recall drive against Koch, who survived it by a margin of 402 votes. He is the only alderman in the board’s 74-year history to face a recall election.

The July 28, 1986, city ordinance setting up the redevelopment required that the city and the developer, Constance Schwartz, sign the enabling contract within 90 days. But it was not signed until Jan. 11, 1988, or more than 14 months late.

Schwartz’s lawyers filed a copy of the contract with the court on Jan. 15. Before the court hearing on the condemnation on Jan. 6 before Circuit Judge Thomas F. McGuire, her lawyers had filed with the court a ”proposed contract” that was unsigned.

What happened with the contract is itself a subject of controversy. When the Board of Aldermen acted last Friday to adopt the Grand-Shaw redevelopment plan for the second time, Koch told reporters that he had had to resubmit the ordinance because the original contract had been ”lost.”

Koch said Wednesday that he ”absolutely did not know” that the contract had been resting in the court file since Jan. 15, or more than 1 1/2 months before he resubmitted his bill.

”I’m embarrassed. I was not aware that the contract had been signed,” Koch said.

Koch said that Schwartz had signed it long ago and sent it to City Hall but that it had been lost and had never been signed by city officials. Deputy city counselor Thomas J. Ray said he also understood the original contract had been lost at City Hall.

Schwartz and her lawyers were said to be out of town this week and could not be reached.

But Sandstedt’s lawyer, Robert Babione, said, ”It’s my opinion that they simply forgot to sign it in the first place.”

HOUSING CONTROVERSY ON 39TH STREET – 26 Mar 1988 P-D

The protest that Rev. Larry Rice is waging on behalf of elderly tenants who may be displaced by the 39th Street redevelopment project in the 8th Ward is counterproductive. He offers no fresh approaches to the problem of alternative housing for those who eventually may be displaced, and he calls on Congress to stop spending money on market-rate housing.

This worthy South Side project was put together by members of the Shaw Neighborhood Improvement Association and by a number of volunteers, including Michele Duffe, president of the redevelopment corporation. Their aim is to improve and stabilize the neighborhood, not push people out. The handful of tenants who face displacement will be offered alternative and probably better housing. The plan is to demolish structures in three redevelopment blocks and replace them with apartments and other types of housing.

Rev. Rice argues that federal policies should focus on creating more housing for the poor. Few can argue with that. But his protest gimmicks aren’t the best way to make that happen. A few days ago he took two elderly 39th Street residents to Washington to hand out squash seeds on Capitol Hill, urging Congress to ”squash” the use of federal money for this project.

In fact, redevelopers and the city are supposed to offer alternative housing to the displaced. If they don’t, the minister has a right to be upset. Meanwhile, he could perform a service by making sure that the developer lives up to the terms of its contract.

TWO TALES OF ONE NEIGHBORHOOD – 16 Mar 1988 P-D

In his Feb. 22 letter, Sam Salamah certainly told a self-serving version of the events going on in the Shaw neighborhood regarding the 39th Street redevelopment project.

Let’s start with the fact that Salamah lives on a rural route outside of Fenton, not over his store at 39th Street and Shaw Avenue. Let’s continue with the fact that the pri ces he charges are 40 to 60 percent higher on an item-by-item comparison with the same products sold by National Foods six blocks away. Some service that he provides to the poor and elderly residents of the Shaw neighborhood! Let’s examine the fact that more than 150 real residents of Shaw neighborhood turned up on a workday at City Hall to protest – successfully – the granting of a liquor license to that same Sam Salamah. Then there is Carolyn Toft of Landmarks speaking about the quality of his rehab of the building that houses his store or the Building Division, which has on at least two occasions had to force him to comply with the building codes of the city in that rehab.

As a 12-year resident of Shaw neighborhood, I have observed or participated in six efforts to deal with the problem caused by the chronic deterioration of the commercial properties on 39th Street. The problems have worsened progressively despite the formation of a beautification plan and the Community Development Agency’s efforts. Most recently, a team of consultants was brought in from the Ford Foundation to help the neighborhood deal with the continuing problems. They finally convinced us, based on nationwide experiences with declining commercial districts within urban neighborhoods, that we cannot make 39th Street thrive again. It will most certainly continue to decline and that affects our property values.

My husband and I have a lot longer and greater stake in Shaw Neighborhood than Sam Salamah. I cannot sympathize with an individual who stands to make money from having his building and his business purchased at fair market value. I can sympathize with the owners of apartments and flats who say that noise and trash created by teen-agers hanging out at Sam’s has made it extremely difficult to rent or sell their properties. It occurs to me that Sam would make a good horse trader. Maybe he’s just trying to run up the price we’ll be forced to pay for a business the majority of neighbors find offensive and undesirable.

Personally, I consider him to be ”Bad Neighbor Sam,” and I can hardly wait for the landscaped greenspace that will replace his genuinely unattractive building and his disruption of Shaw’s progress as a neighborhood.

Barcy Fox

St. Louis