Once again a small group within the Missouri General Assembly has targeted the Historic Tax Credit program for modification or elimination. Your input to your senator is critical if we are to preserve this critically important tool for redevelopment of our cities and towns. 

The following is a brief fact sheet/talking points to help you better understand the issue; this was developed by the Missouri Coalition for Historic Preservation and Economic Development and provided by Eric Freidman, a St. Louis REALTOR® who is active in the coalition to protect and expand Historic Tax Credits in Missouri.

Fact Sheet on Historic Tax Credits:

Economic Development – During a devastating housing/financial economy, it is critical that the Historic Tax Credit is allowed to continue generating local jobs and infusing state and local budgets.

• The Missouri Historic Tax Credit has driven down unemployment by creating over 40,000 jobs since its inception in 1998 (as of September 11, 2008) (Rypkema, 2008).

• With a return to the state of over one dollar for each credit dollar issued, the Historic Tax Credit has resulted in $673 million direct and $700 million indirect additional income for Missouri taxpayers (as of September 11, 2008) (Rypkema 2008).-  For every one million dollars of spending on historic rehabilitation, local income increases by $704,000 and 20.2 jobs are created. Those results significantly exceed payback from other types of state investment (e.g. one million dollars of manufacturing output adds an average of $470,000 to local household incomes and creates 13.9 jobs.) (Rypkema, 2008).

• One million dollars of rehabilitation investment results in an $110,000 increase in state taxes and $92,000 in local taxes (Rypkema, 2008).

• Each year, the benefits of the Historic Tax Credit far exceed direct cost, boosting Missouri’s economy by more than one billion dollars per year (Rutgers, 2001).

No Caps – Capping the Historic Tax Credit will halt redevelopment and destroy the program.

• Renovated buildings must be completed and certified prior to the tax credit being issued. If developers/owners are not certain that a credit will be available, they will not make the initial investment. The credit is essential to making the project work.

• Buildings eligible for the Historic Tax Credit are economically obsolete without an available incentive.

• The Historic Tax Credit of Missouri is modeled after that of the Federal government. Both remain successful because they are uncapped and are allowed to function through efficient markets.

Recognition – The Historic Tax Credit is the most effective development credit in the state and serves as a model for success in job creation. As a direct result of the credit, Missouri leads the country in historic preservation.

• Research indicates that, among Missouri’s tax credits, Historic Preservation is most effective from a cost-benefit perspective. Researchers recommended that it be preserved in its original state in order to continue promoting economic development (http://www.taimerica.com/missouri/reports.html).

• The Historic Tax Credit has been so successful that several states, including Iowa, Massachusetts, Tennessee, North Carolina, Wisconsin, and Maryland, have made efforts to imitate the credit.

To fight this measure, you’ll need to contact your state senator. For more information on how to do this via paper or electronic mail, go here.

To spread the word about this issue to others, go the Tell A Friend site.

Most of this post was taken from excerpts of the informational site on this issue provided by the Missouri Association of Realtors. The original wording and source can be found via the above two links.

]]> http://thresholdstl.com/other_topics/legal-issues/historic-tax-credits-missouri/feed 0 http://thresholdstl.com/other_topics/legal-issues/crime-and-police-ambivalence http://thresholdstl.com/other_topics/legal-issues/crime-and-police-ambivalence#comments Tue, 02 Dec 2008 00:55:39 +0000 Matt Kastner http://stlinvestmentrealty.com/other_topics/legal-issues/crime-and-police-ambivalence/

I’ve always considered myself a pretty understanding guy in terms of facing the reality of any situation. In terms of crime and violence I know that the world isn’t a perfect place and all we can do the best we can to fight it. But what do we do when those we entrust, those we pay to help keep us safe don’t do the job? In St. Louis, this often seems to be the case when crime and the local police meet.Perhaps I should frame this statement with the recent occurrence that has brought this to mind. I received a call from one of my clients yesterday with a very sorry tale. His general contractor, someone I know pretty well, was the victim of a pretty violent crime during the night following Thanksgiving.

Apparently two masked men thought this would be a good time to break into his house to rob the place. The thing is, he and his wife were home and these guys knew it. He was woken up with a baseball bat to the head. Obviously he was hurt really badly. I am not sure the extent of his wife’s injuries, but I don’t believe it was anything too severe. Physically at least.

After putting him out of commission, the two burglars grabbed everything of value and then took the man, who had been beaten with a bat to the head, to the ATM where they made him withdraw all his money. They followed that up with a threat that he needed to produce more money within a certain time frame or they would come back and kill him and his family.

Three days later he is still in the hospital with a metal plate in his head and an eye he will possibly never see out of again. As horrible as this kind of thing is, it happens everywhere from time to time. You hear about things like this involving strangers, but when its someone you know it hits closer to home.

Being a victim is in of itself a horrendous experience, but the most frustrating part of the story isn’t over. The real fun part that disturbs me more than anything: The police don’t seem to care. This incident took place in the heart of the Benton Park Neighborhood near to Trueman’s Bar and Niche. People have a sense in the area that things are safe and I thought justifiably so. Apparently that’s just luck because the police aren’t doing much to stop crime there. These criminal weren’t just a couple kids having some fun. They were violent criminals and if caught would be put in prison for a long time for what they did. Not worth the effort though, judging by the great detective work so far.

When the police got involved they immediately started out in an adversarial position with the victim. As if he brought this on himself. Since the suspects faces were covered getting an ID would be tough. The only noticeable mark the victims noticed was that one of the guys had a tattoo on his neck that had two “z”s in it. When the police heard this they dismissed it and said it had to be a swastika. “Guys don’t have tattoos like that,” they said. The victim was certain that it was two “z”s like ZZ Top, but the police just shrugged it off.

At this point it is my understanding that the police still haven’t even looked at the surveillance tapes from the ATM. As for suspects, they say it is probably someone the victim knows so he should figure that out for himself. They seemed pretty convinced that it had to be someone on his rehab crew and would not divert from that despite the fact that this crew is comprised of the man’s son and men he has known for over 20 years. Seems like he should recognize them even with masks on. But do the police care? No.

I’m probably coming off a little jaded here, but this is a major issue. And this is certainly not the first tale of this sort I have been told. I appreciate the fact that crimes like this are hard to solve. Real life isn’t like CSI after all. In the end there is only so much that can be done to stop determined criminals. What disturbs me is that the police don’t even make an attempt.

The cops are so jaded themselves that they don’t even try anymore. I don’t know if it is laziness or they just aren’t qualified for the job, but these guys are simply creating an environment where criminals can thrive because nobody tries to stop them.  If they take this attitude in supposedly “good” area like Benton Park, I can’t imagine how they act elsewhere. And people wonder why homicides are up so much this year.

Situations like this just go to show that you are never truly safe. Locks, alarms, lights and possibly a weapon are your only real defense. Don’t count on the men in blue to come and save the day. They’re too busy writing traffic ticks and busting public urinaters at Mardi Gras to worry about solving important crimes that shatter lives. Get well soon Wayne.

This isn’t exactly breaking news, but I thought I should share some info about a St. Louis City Bill (Board Bill 174) that could have a direct affect on City investors. This bill was introduced in July to the Board of Alderman by Alderwoman Triplett and Alderman Kennedy. Here is the summary of the bill as it was presented in July:

An ordinance pertaining to a registration fee for vacant buildings and structures; defining ownership for the purpose of this ordinance; establishing an annual registration fee of fifty dollars ($50) to be charged to the owner of any parcel of residential property improved by a residential structure, or commercial property improved by a structure containing multiple dwelling units, which is vacant and has been vacant for at least 30 days; requiring an authorized agent either maintain an office or live in the City of St. Louis; requiring the owner to secure, post a sign on and maintain the vacant building; requiring the owner to maintain liability insurance; establishing a penalty clause; defining vacant for the purpose of this ordinance deeming registration statements as prima facie proof; initial notification; collected funds; and containing a severability clause.

If you’d like to read the full language of the bill you can read it for yourself here. I have chewed over this proposed legislation quite a bit since I learned of it a few weeks ago, and I can’t decide what to make of it. As a property owner, City resident and someone who works with vacant properties on a daily basis, I understand the frustration with absentee landlords. Some of these people would love ot fix up their properties if they could figure out a way to bring everything together, but more often than not these people are speculators that buy properties and let them rot while they wait for property values to increase.

I get the whole effort of trying to have good contact information for these people. What I don’t get is why they need to create a new law to do it. When a property changes hands in St. Louis, the new owner has to fill out a for with their registered tax address.  If they aren’t living in the newly purchased property it stands to reason that the properties actual address is not the tax address. Search through the tax records in the City, however, and you will find countless properties with the incorrect contact addresses. And its not just properties that have been on the books for a long time. This happens all the time right now. I have even seen buildings purchased by my own clients that don’t get registered correctly. Even when they fill out their correct address on their closing documents.

It seems to me that before the City starts talking about creating new laws and levying new fees, they should implement the rules that are already on the books. I’m not against the law per say, I just don’t think it would take care of the problem. What do you think?

It’s been about six months since I last took a look at this project, so I figured I needed to post an update. From appearances, the future home of the studio for Shock City Music Works appears to be nearly complete.

I haven’t been able to look inside, but the exterior seems just about done. And its looking great. A welcome addition to the Benton Park neighborhood at 2200 Gravois.  No word on the when they will be open for business, but you can get a good view of what the interior of the building will look like on the Shock City Studios website.

Other than the music studio, the Polar Wave Ice & Fuel building will also be home to other businesses. Grubb & Ellis/Gundaker Commercial are currently trying to lease 12,000 sq ft of office and retail space in the building. No word yet on possible tenants.

UPDATE – I finally got a chance to tour the inside of the building. For pics and impressions, click here.

[Show as slideshow]

If you’ve been living in a cave for the last year, you might be surprised to know that foreclosures are happening at a record pace in St. Louis and around the country. Obviously, this can make for some pretty great buys in the real estate market, but a lot of people and companies are hurting because of this trend. All levels of government have been talking about doing something to stop the bleeding for months, but nothing has been done. Until this past Wednesday that is.

On Wednesday, President Bush signed a housing rescue bill into law. I won’t go into too much detail on the specifics, but you can find write ups on the situation on CNN and Yahoo. Here’s a brief outline from CNN of what the new law will do:

• A larger role for the Federal Housing Administration
• A stronger regulator for the GSEs
• A permanent increase in “conforming loan” limits
• A new home-buyer credit
• A ban on down-payment assistance from sellers
• A new affordable housing trust fund
• Grants to states to buy foreclosed properties

This is not a polictical blog, but I feel that I have to share my thoughts on this situation. The bill was about 700 pages long, so I’m guessing it was a bit bloated. I have read up on this new law quite a bit and I’m sure it will be of at least some help to market. But that’s not really the thing that concerns me. What concerns me is that this is being billed as a “housing rescue” when it is clearly a “housing bailout.”

We’re a capitalist country. When companies and people make bad investments they pay the price. Fannie May and Freddie Mac might be backed by the government, but they are publicly traded companies. They’re both Fortune 500 companies for god’s sake. So why should the general public have to pay for a bailout because they backed loans they shouldn’t have. They made a bad business choice and their shareholders should be the ones taking a beating, not us.

As for the normal everyday citizens that are going to be helped by this bill, I feel much the same. I don’t want to see anyone on the street, but why are we subsidizing stupidity? We’re basically going to give these people tens of thousands of dollars because they bought a house that was more that they could afford. In what way do these people deserve this money? If they get foreclosed on and their banks take a big loss, that is the banks fault. The owner can always rent. That might sound harsh, but the alternative is even more so.

White House spokesman Tony Fratto’s line about this bill particularly urks me: “The Federal Housing Administration will begin to implement new policies intended to keep more deserving American families in their homes.” So who is going to be deciding who is “more deserving?” This is a grey area where government just doesn’t belong.

If any readers see my comments as cynical and uncompassionate, think of the world we live in. When was the last time the government got something right? Hurricane Katrina, Iraq, Afganistan, scandals… I could go on and on. We live in a word of cause and effect, and if those who made poor business choices don’t feel the effects of their actions, I fear for the precedent that will set. In the end, all this is going to do is make us more dependant on government generosity. This isn’t a matter of Democrat or Republican ideas. Liberal or conservative. Its right and wrong. And this is just wrong.

This is a piece of trash. Intimidating isn’t it. Well don’t worry. If the St. Louis Board of Alderman has it’s way you won’t have to see this stuff anymore. According to an article recently published in the South Side Journal (Business owners want trash bill canned), Alderman Steve Conway, D-8th Ward, has sponsored a bill requiring convenience stores and carryout restaurants to pick up all trash originating from their place of business within a 300 foot radius at least once a day.

I’ve always liked Steve Conway, but this is the worst idea I have ever heard. The most alarming part is that he isn’t alone. The paper makes it sound like the alderman are gung-ho about the bill and are all clambering over getting on as a cosponsor. These businesses come in and improve our neighborhoods despite an already oppressive atmosphere caused by the earnings tax and umpteen other ordinances. Our officials should be trying to help these business owners not hurt them.

Consider the logistics of cleaning up an area 300 feet around your place of business. I don’t care if it is only cleaning up the trash coming from your place of business, it is insane. That is the equivalent of an entire football field in each direction. Who is going to clean this area? Many of these businesses are barely staying alive and the extra manpower needed to to address this could bring them down. These aren’t corporate giants here, they are mom and pop shops and franchises. Times are tough and they shouldn’t be held responsible for litter violations of their patrons.

Perhaps there is a problem in our city. Maybe its the aldermanic system that needs to be cleaned up and not businesses. I encourage all readers to contact their local alderman and express their displeasure over this situation. If you don’t know who your alderman is you can search for your alderman on the City’s website.

So what do you all think of this proposed legislation?

“Now that spring is here, some home improvement scammers are working their way into the City. There have been two reported incidents in the last two weeks. In both instances, the crime happened in the middle of the week, mid-morning, in the 2nd District on our City’s south side, but as always, you should be vigilant any time you are at home.

The perpetrators tend to target the elderly, and pose as lot surveyors, city workers, tree trimmers, or water and electric company workers. The conmen choose a house, and take two or three men to do the “job.” The first member of the crew will attempt to get the resident out of the house, often asking the resident to show him to some spot on the property. The second and third will enter the house, one distracting any other residents who may be in there, and one checking for money or other valuables. They usually leave the residence within five to seven minutes.

A percentage of Gypsies have been known to operate in a large organized crime network which commits acts similar to these. The group travels with the seasons, and because homeowners begin to do seasonal repair work around this time, spring is particularly profitable for them and other scam artists to focus on home improvement fraud. As with any other time of the year, though, we advise you to be careful of anyone who comes onto your property without either an invitation or appointment.”

For Additional Information

Fraud Assistance Hotline: (314) 612-1412
Office Phone: (314) 622-4941
Fax: (314) 622-3369
Web: www.circuitattorney.org

“Under the proposal, panhandling would be allowed only during daylight hours. It would be banned at all hours at bus or MetroLink stops, around ATMs or an entrance to a bank, within 30 feet of a public doorway or at any sidewalk cafe, school or crosswalk.” Sounds like a good start.

The only thing left to do is get Mayor Slay’s signature on the bill. Seeing as he has already said that he would sign it on his blog, I think its safe to say that its a done deal.

You can read the whole article hear: article

Contracts seem to have gone from being legally binding agreements to mere pieces of paper. Have no contingencies left and decide you don’t like the deal anymore just days before closing? Just walk away from the contract. Pass your inspection contingency and decide a week later that you want to bail by fraudulently claiming that you can’t get financing? Just walk away from the contract. Decide that you want to sell your property to someone after you already have it under with someone else? Just walk away from the contract. Nobody seems to pay attention to these things anymore. Deadlines come and go and agents, lenders, buyers and sellers take no notice.

There was a time when businessmen, shady as many of them were, had a strong enough sense of follow-through that a mere handshake agreement was sufficient. Nowadays, I can have a legally binding agreement put down in writing only to have one of the parties spit on it as if it were meaningless. I don’t know if this is a sign of the world we live in today or something isolated to the world of real estate.

I am probably making the situation sound worse than it really is, but I often find myself quite frustrated during transactions. I often think we have come to this state due to the influx of unqualified or uninterested buyers that popped into the market over the last few years during the era of 100% financing and questionable appraisals. Hopefully with those days gone this trend will begin to dissipate. Hopefully.

Or maybe if more people would sue buyers or sellers that violate contracts we could curb this issue. Perhaps people are becoming emboldened due to the fact that it is very unlikely that they will face any repercussions from breaking a contract. I’m not advocating that everyone in the real estate world become sue-happy, but it’s a perfectly acceptable recourse in certain situations.

These issues probably play a role in the lack of respect shown to contracts, but in the end there is probably something less tangible at work. We all just need to remember that a contract is a contract is contract. Once you sign on the dotted line, you can’t just change your mind and walk away if there are no loopholes or contingencies. There is an endless amount of money to be made in this business if we all just learn to keep our heads. A well-written document protects the interests of all parties to our mutual benefit, but only if we can all have enough integrity to show these documents the respect they deserve.

According to Federal Fair Housing Law, the State of Missouri and the City of St. Louis, the following classes are protected from discrimination:

So what does this mean for you? That you better not even ask personal questions of prospective tenants that relate to these classes. Credit scores, employment history and criminal records are fine to use as determining factors, but the categories above are not. Despite what many property owners seem to think, these laws apply to everyone. Even private owners.

Your personal feelings towards these laws or these people are irrelevant in this situation. The fact is that if you discriminate or treat one group of prospective tenants differently than another, you are opening yourself up to a lawsuit. There are plenty of nonprofit organizations that provide free legal assistance in such cases of discrimination. If you can’t force yourself to keep within the limits of these laws, you’re probably in the wrong business. Watch what you say, watch what you do. You’ll be better off for it.

*If you want to take a look at the current Landlord-Tent Law Handbook, you can check it out HERE.

In the landlord world, eviction is a four-letter word. The process is so despised because current Missouri eviction law clearly favors the tenant. Even the deadbeat ones. There are so many problems with current laws that finding
a starting point for reform has been a little tricky. Despite this hurdle, the wheels are finally in motion heading in the direction of change.

Over the last few years, one of the biggest issues landlords have faced is what to do with a tenant’s personal belongings during an eviction. Current laws are unclear about this situation and that has worried many a landlord. That’s where the new Landlord-Tenant Liability law comes into play.

The bill (HB 504), as summarized on the Missouri House of Representatives website, “exempts landlords from liability for any damage to personal property resulting from the enforcement of a judgment granting possession of the property.Landlords are given the absolute right to dispose of the personal property in any manner they consider reasonable.”

This bill has just made it out of committee in the State House. It passed unanimously, but a greater battle still looms ahead. The bill still needs to pass the muster of the entire body of the State House and Senate. No date has been set for further debate, but the House website lists the “proposed effective date” for the bill as 08/28/2007. This would indicate that movement on the subject can be expected in the near future.

This bill would do a lot to even the playing field between landlords and tenants in St. Louis and the entire state of Missouri. Ensuring it’s passage should be a high priority on any investor’s checklist. You can help improve the bill’s chances by contacting your State Senator and Congressman and voicing your support. There are various interest groups pushing to kill the bill or add crippling amendments and your letters can make a big impact.

Lookup your representatives here:
www.senate.mo.gov/llokup/leg_lookup.aspx

For more information on the bill or to checkup on its status visit:
www.house.mop.gov/bills071/bills/hb504.htm

*UPDATE – This bill ended up failing to pass during the last session. Not do to lack of support, but due to lack of time. It has been picked up again for the current session and already has traction. So its still vital that everyone throw their support behind this one. Check back soon for and update on the status and more information.

Being new to the investment world, I don’t know a whole lot about the inspection process. In an attempt to learn more, as well as see what resources are currently available on the subject, I assumed the role of a prospective rental property buyer and paid a visit to the St. Louis City Inspections Department in City Hall, Room 407.

Upon my arrival, the receptionist politely asked if she could help. I told her that I found several rental properties I was interested in purchasing, but wanted to get a general idea of the codes and regulations inspectors would be looking at so that I might identify problems and calculate their costs. I explained that I was trying to minimize my headaches, by being proactive about addressing violations.

She asked if I had the exact addresses so she could look to see if there were any current violations. I told her that while it might give me part of what I was looking for, I really needed a resource that would allow me to cover all my bases, not just for specific properties.

She appeared baffled. The widely distributed Landlord handbook, InfoRent, was out of stock, but they had a brochure that might be of some help in my quest for knowledge. It was a Missouri Landlord-Tenant Law booklet. Not exactly what I had hoped for. Asking if there was any other office I might visit with helpful information, I was told to try “next door” in Room 406, the Housing Conservancy Office, or at 418, the Neighborhood Stabilization Team. She also stated that if I had specific questions I could make an appointment to talk to one of the inspectors. I noted that if I couldn’t even get guidelines for inspection expectations, it surely would be difficult to ask pointed questions.

Next door at the Conservancy I waited at the front of an entry area unfolding into a large office area. After a few moments of staring at the housing and community preservation brochure, a woman leaned backed from her desk and asked if she could help. Repeating my previous request, I was quickly informed that the brochure I was holding was all the available literature they had. So it was across the beautiful atrium to room 418, and the Neighborhood Stabilization Team office.

This group’s mission is to: “To empower constituents to sustain a quality environment within their neighborhood through assistance, education, intervention and organization.” Sounded like a place that may provide some much needed assistance in proper property management. Unfortunately, all the young receptionist could provide was a typical 8.5” x 11” piece of paper with the general concepts surrounding the Team and its officers. She told me, as I had been told before, to look at the InfoRent booklet, but she added that it was available online.

She pointed to a link listed at the bottom of the page. I skimmed the document, and noted the bulleted item outlining “problems” the Team addresses listed “physical violation of health, safety, and/or property maintenance codes.” This seemed as good a lead as any, and I asked if they had any documentation on the codes/regulations that governed these problem issues. I was told that all their information could be found on the website, and was given a brief tutorial on how to find their page through the City’s homepage.

I thanked her for her time and left City Hall after almost an hour of searching with only a Landlord-Tenant law booklet, an outline of the responsibilities of a Neighborhood Stabilization Officer and a Housing Conservation brochure to show for my time.

The latter came closest to answering my query with a small section at the bottom of its interior middle tri-fold. It read:

“More commonly cited items include:

• Smoke Detectors
• Overcrowding
• Unsanitary Conditions
• Doors and Locks
• Falling or Cracked Plaster
• Defective Electrical or Plumbing Systems”

That’s all well and good, but what specs need to be followed when addressing these issues? How can I be expected to fix something if nobody can tell me what I need to fix?

The City’s inspection process seems to reward neither initiative nor forward thinking. The overworked inspectors, and the property owners that deal with them, would both greatly benefit from a readily accessible and comprehensive information source outlining the responsibilities and expectations of each, and from one to the other. Not so dissimilar from the Landlord-Tenant guide I received in their department, just a bit more on target.

There is a plague afflicting the St. Louis area. This onslaught is indiscriminate in choosing victims. Businesses, residences, apartments, even churches are not safe from the salivating jaws of this beast. Keep on the lookout for the copper thief.

Everyone seems to agree that the surge in copper prices from $.50 a pound to over $3.00 has caused a major surge in copper theft. Whether by stealth, trickery or reckless abandon, copper thieves have been ransacking our area. Copper pipes, electrical wiring and old gutters are especially vulnerable targets.

Many residents blame the continual climb in theft on an inept police force or dismissive neighbors. But there is no way you can pin this on them. It would be impossible to have eyes on every potential theft target at all times. There isn’t enough manpower. Even if there was, in a city with so many rehabs going on at any given time, thieves posing as contractors can too easily gain hassle-free access to vulnerable areas.

Preventative measures are not the key to solving this issue. If we really want to stop the thieves, we need to cut off their buyers: scrap yards. These businesses serve a necessary and functional purpose, but more has to be done to prevent this theft. Perhaps scrap buyers should only pay sellers by check and keep drivers license records of all sellers? Perhaps scrap yards who knowingly buy from thieves should face stiffer fines. Regardless of the path to be taken, there must be action.

Protect yourself. Take a stand. Call your local alderman (search for your alderman) and scrap yards today and demand that they fix this problem. We need to be fostering a hospitable environment for developers and residents not robbing them blind.

Notable scrap yards in close proximity:

- Ace Scrap Metals, 5900 Manchester, St. Louis
- Top Metal Buyers, 808 Walnut, East St. Louis
- Cash’s Scrap Metal, 300 E. Nagel, St. Louis

*Check out my previous blog entry, “Stopping Copper Thieves: What can you do?” for tips on protecting yourself.