In a dramatic development, the sponsor of an Illinois House bill that would have created the financing for a mega-development in Glen Carbon withdrew his support Monday for the project.
State Rep. Tom Holbrook, D-Belleville, said he was not proceeding with a bill he is sponsoring in the Illinois House to that would create "STAR" bonds in Illinois. He joined fellow state lawmakers Rep. Jay Hoffman, D-Collinsville, Sen. Bill Haine, D-Alton, and Sen. Kyle McCarter, R-Lebanon, during a press conference at Fairview Heights City Hall.
STAR bonds would divert sales tax revenue to attract large-scale developments to Illinois and pave the way for the 650-acre, $1 billion University Town Center development led by Holland Construction Services.
At the press conference, Holbrook read a letter he sent Sunday to members of the Southwestern Illinois Council of Mayors as well as local state legislators and said, "At this time, I will not proceed with any STAR bond legislation for the metro-east."
In doing so, Holbrook joined a long list of local and county officials who opposed the project, fearing the loss of retail business and sales tax revenue in their towns would be catastrophic.
Holbrook said that since the bill and proposed development in Glen Carbon were both unveiled a year ago, the development's plans have been revised in response to concerns raised by his colleagues from surrounding communities. He said he will not be moving the bill through committee for further discussion, virtually killing the bill.
"Once again, I commit to no proceeding with any STAR bonds legislation for the metro-east unless a majority of my constituents are in support of it," he said.
The University Town Center development group, which is led by Bruce Holland and includes chief development officer Ryan Lowe, partners Chad Holland, Ryan Holland and John Costello, the son of U.S. Rep. Jerry Costello, D-Belleville, agreed to give the mayors group 60 days to review and conduct an independent economic impact study, which was released last week.
The research study conducted by St. Louis-based urban consulting firm Peckham Guton Albers & Viets Inc. found that metro-east communities could lose a total of $6.8 million in sales tax revenue -- anywhere from $25,000 to $1.6 million apiece annually from the 650-acre development.
"STAR bonds will cause huge losses in sales tax revenue, and they'll lead to the downward spiral of development in our counties," St. Clair County Board Chairman Mark Kern said. "I have no doubt that the developer of this development will continue to try to paint a rosy picture, a rosy scenario, of how STAR bonds will create jobs. But we know that most of those jobs already exist in our communities and will simply be moved to the STAR bond area, leaving empty buildings and empty city and county coffers behind."
Kern was joined in opposition to the project by Belleville Mayor Mark Eckert, East St. Louis Mayor Alvin Parks Jr., O'Fallon Mayor Gary Graham, Smithton Mayor Ray Klein, Collinsville Mayor John Miller, Granite City Mayor Ed Hagnauer, Pontoon Beach Mayor Jim Denham, Madison Mayor John Hamm, Maryville Mayor Larry Gulledge, Troy Mayor Tom Caraker,St. Jacob Mayor Ray Muniz, Hamel Mayor Ron Mulach, Godfrey Mayor Michael McCormick and Columbia Mayor Kevin Hutchinson, who is president of the mayor's council.
In response, Holland issued a statement Monday afternoon, saying that he and his team are "as committed to creating jobs and growing the metro-east economy today as we were one year ago."
"We firmly believe a destination development will be the economic catalyst our region needs and will significantly and positively impact the communities around it," Holland said. "In fact, a study commissioned by opponents of the project concedes that University Town Center will result in a net increase in permanent jobs of more than 8,000. Opposition to this project without even fully assessing current plans for University Town Center is premature."
Gov. Pat Quinn issued an amendatory veto on the initial bill in August after it cleared both the Illinois House and Senate.
Haine, who said he has been calling the issue "Star Wars," said he and other lawmakers cannot justify such a tax subsidy that would divert state sales taxes for a shopping mall in the midst of a monumental drop in state revenues and budget shortfalls.
"I can't do it," Haine said. "It creates winners, but also ladies and gentlemen, it creates losers. At this juncture in Illinois' history, I don't want to create any losers. We have too many losers now, and I don't want to create any more. That's why I'm a 'No' vote."
Hoffman said that although he and Haine voted in support of the initial bill, both of them have since learned that annual losses to St. Clair and Madison counties could be as high as $1.2 million a year. He also said assessed valuations of property in surrounding communities would decrease, which would decrease the property tax revenue for local communities.
The University Town Center development is in Haine's Senate district and Hoffman's House district.
"I believe we made the wrong decision, and we made the decision before we had these facts before us, before the state was facing this dire time of economic turmoil," Hoffman said. "But, I can tell you from now into the future, I will not be voting for this bill. I will not be supporting this bill, and if it is called for a vote, I will be voting 'No.'"
McCarter added: "We have to prioritize what's really important during this very difficult recession. I think we are making the right choice to say 'No' to STAR bonds today."
Holland said he and his partners hope to meet with each mayor to discuss the results of his team's own economic study as well as the mayors council's research. He also said that the governor's office has requested to meet with the developers to discuss their latest plans.
"We know input from local officials makes the legislation and development stronger," he said. "We hope to benefit from this collaboration as we continue forward."
