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An Open Letter to Chesterfield City Council and Staff:

Is Chesterfield Valley Development a Challenge to Government Integrity?

An Open Letter to Chesterfield City Council and Staff:

I attended the Chesterfield City Council meeting on May 7th with an open mind.   Please take a moment to reflect upon my thoughts:

First, I want to thank each of you, our elected officials and paid staff for your service to our fair city.

Now onto my comment:

I like paying taxes … let me say that again … I like paying taxes; for when I pay taxes, it means that I have either earned money or I am supporting my local schools, police, fire department, public works, and city administration.  All things I like having when I need them.

Your support of this CID will perpetuate a fraud upon the citizens of our country, something I would not want our fair city of Chesterfield to be known for.  Yes, a fraud.  It is fraudulent to call something a tax and then hand it over to enhance the profits of a private business.  If the developer needs an extra 1% of all sales to make a business profitable, then they should be honest with the consumers and reflect that cost in their rental fees and retail prices, and not ask us, the good citizens of our fair City of Chesterfield, to assist them in collecting monies for them while perpetuating a fraud upon their customers.

Like I said, I like paying taxes … and if you approve this measure, you will be participating in a fraudulent deception that is nothing less than immoral and unethical.

Please work with any and all business that want to enhance our fair City of Chesterfield … but also please tell those who want us to act improperly on their behalf that they are not welcome here.

For the record, I am OK with adding more shopping options to the valley.  It just seems that if the developer needs a temporary 1% surcharge on all sales to make their investment work, then they should collect it directly from the merchants and not use us as their agent ... so I still don't understand why they need us to do this for them. 

Thank You for Your Time and Service.

Sincerely,

Harvey

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

KM Kramer May 08, 2012 at 07:28 PM
So, Mr. Ferdman, you think those and only those who shop at the outlet mall paying a 1% tax is too much for the City to agree to, when some 800 to 1,000 NEW jobs will be created, and NEW tax revenue created for the Rockwood School District and for the Fire Department? You say you attended last night's meeting and kept an open mind - obviously you kept your ears shut when they went over what the money would be spent for, for necessary streets, utility lines, and yes art work to enhance the development and the City. Instead of the developer leveraging the 1% sales tax to build the public streets and extend utility lines, would you rather the city issue general obligation bonds, which is how streets, utility lines, and community improvement projects have been built in the past? I was at the meeting - I never heard the developer or any member of the city say the money would go "to enhance the profits of a private business" - who said that, and when in the hearing? Apparently you didn't hear either the part about the average shopper being from out of town, going to the outlet mall once a year, and spending an average of $200, of which the 1% tax equates to $2.00 - just over the cost of a half a gallon of gasoline. You say you don't understand and it is obvious you don't have a clue to financing mechanisms for economic development - I say it is a shame you posted an open letter on a public blog without taking the time to research the subject and try and understand.
Harvey Ferdman May 08, 2012 at 11:15 PM
THIS IS PART 1 OF A 2 PART RESPONSE. Mr. Kramer, Thanks for your interest in our community. I have no objection to the building of an outlet mall in the valley. I agree that the jobs, income, and overall enhancement to the area are all positives. It is the request for our city to be in the middle of what seems to be a strictly commercial transaction between merchants and customers that I am questioning. My “open letter” about last night’s meeting hopefully conveys that I feel that if the cost of doing business at this location is 1% higher, then the prices of the products and services sold there should reflect that 1% directly and it should not be imposed or hidden as a tax. Having an artificially high tax rate at this location has the potential of making our city look like it is taking advantage of those who choose to shop here. I think all would agree that if someone from outside our community notices a higher tax rate at this location, it is reasonable for them to assume that this is the tax rate for the entire valley and City of Chesterfield, thus having the potential to reduce future visits to our fair city. So while many supporters of the CID stated at the meeting that shoppers who don’t like the 1% tax can choose to shop elsewhere, the impact of this is likely to hurt all our businesses, not just the outlet mall. If it is to our city’s advantage to be involved in the financing of this project, then maybe there are better vehicles. SEE PART 2
Harvey Ferdman May 08, 2012 at 11:16 PM
NOTE TO READERS: THIS IS PART 2 OF A 2 PART RESPONSE In the spirit of cooperation, I appreciate that you probably do have more knowledge on financing than I do. So if you would, it would be helpful if you would explain a few things to me: 1. If the developer is a “Grade A” business with a great track record, are they able to get financing for this project without the city’s involvement? 2. If the City of Chesterfield is not assuming any risk, liability, or expense in this transaction (as stated at the meeting), why have we been asked to be involved in the financing of it at all? 3. In my view, having the city collect funds on behalf of a particular business seems odd. The way I see the money flow, it appears that customers are to be charged an extra 1% over the purchase price for goods and services that will flow, at 100%, to the corporation that has invested in making this mall a reality. Why can’t the investor collect the 1% directly from the merchants and tenants who will hopefully be signing leases with them? Thanks Again for Your Interest in Our Community, Harvey
KM Kramer May 09, 2012 at 04:10 PM
Mr. Ferdman, First of all, the city is not "involved" in the financing of the outlet mall, nor is it in the "middle" of an otherwise commercial transaction. Contrary to what you presume, the city does not even collect the sales tax - that is done at the state level and distributed back down to taxing entities. Think of what the city is doing, by holding the public hearing and the council voting on the CID, as exercising it's oversight, similar to what it does in holding public hearings and voting on zoning matters. (Presumably you are not against zoning too). The 1% tax will not hurt other businesses - if anything it may give them a price advantage. The outlet mall will bring far more shoppers and visitors to Chesterfield than a $2 charge on a $200 sale will drive away. To answer your questions, for (1) Chesterfield and we the residents are not involved in the financing, the developer is getting their own; (2) again, we are not involved - the city is exercising oversight; (3) the city is not collecting funds on the behalf of any business, and no there is nothing "odd" about using a CID to finance public improvements, and no, the 1% will not flow to the developer but will go to retire the bonds issued to fund the streets, utilities, ect.. The CID is a fair, economical and cost effective way to leverage funds collected solely on the users of the outlet mall to finance the streets, utilities, ect. that otherwise the city may have issued general obligation bonds for.

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