Rating Agency Predicts Gains in Sales Taxes from Dual Outlet Malls

Fitch recently upgraded the outlook of bonds associated with the Chesterfield Valley from "stable" to "positive."

Will Chesterfield be able to support two outlet malls at once? Some in the financial markets seem to think so.

Fitch, one of three companies that serves as a rating agency for securities, recently upgraded its outlook from “stable” to “positive” for bonds associated with the Chesterfield Valley Transportation Development District.

The move was in part due to confidence in that the opening of Taubman Prestige Outlets and St. Louis Premium Outlets, both to be located in Chesterfield Valley, would grow sales tax revenues. 

In a press release, the company cited several factors for the decision:

  • Recent sales tax improvement: The Positive Outlook reflects continued progress in expansion of the sales tax base with the planned opening of two sizeable outlet centers on track for later this year.
  • Improving but volatile sales tax collection: Sales tax collections for 2011 and 2012 were up considerably versus prior years, reflective of an improved local economy, but inherently remain subject to cyclical volatility.
  • Accessible location: The district encompasses a five mile commercially attractive retail corridor along Interstate 64 which caters to the affluent St. Louis County region.

The company also believes that there is enough economic activity and concentration of wealth in the area to support such intensive retail. It cites the significant growth of Mercy Healthcare, which is headquarter in Chesterfield, and the relocation of RGA’s headquarters to the city as well.

“These projects will bring a sizable numbers of workers to the area, increasing the population of shoppers within the district,” it stated. 

David Altman January 12, 2013 at 04:58 AM
I thought Chesterfield was worried that paying for added costs city city will incur due to new malls might outweigh the sales taxes it must share with other municipalities: Quote from Chesterfield Mayor Bruce Geiger: “Chesterfield will soon be home to a premium outlet mall that is expected to generate $150 million in annual revenues,” he said in prepared remarks.We have been working with the developer for well over a year and have spent significant time and expense to bring this to fruition. When the outlet mall is operational, approximately $1.6 million of General Fund revenues will be generated. “As a pool city, while all of the sales tax revenues will be generated in Chesterfield, we will receive $100,000. The remaining $1.5 million; the other pool cities will receive $800,000 and St. Louis County Government will receive $700,000. Once the new mall is operational, Chesterfield will be required to provide the necessary police protection, traffic, street maintenance and handle issues 2 million people a year coming to the new mall will create. Source: http://www.newsmagazinenetwork.com/2012120328138/


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