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St. Charles Approves Changes to Streets of St. Charles Plan

Smaller project is expected to generate about $4.5 million less in taxes, which are used to pay off bonds backed by city.

The Streets of St. Charles project may have fewer residential units and a smaller total square footage going forward.

The approved a request from Cullinan Properties to amend the development plan for the mixed-use project, reducing the minimum number of residential units from 520 to 400.

In addition, total square footage minimum would reduce to 718,000 from current low of 1.1 million.

The council approved the request on a 8-1 vote. Councilman Tom Besselman, Ward-2 voted no and Councilman Michael Weller, Ward-5, was absent.

Councilman Dave Beckering, Ward-8, voted in favor of the amendment, although he originally raised questions about how much potential revenue the project might lose out on if the size of the project is reduced.

Cullinan submitted a lengthy packet of information answering that and other questions.

Director of Administration Michael Spurgeon said under the old plan, the entire development was expected to generate $59 million in sales and property tax revenue, and under the amended agreement the project is estimated to bring in about $4.5 million less than that. 

Spurgeon said in the future, he wants to meet with the developer to ensure the city is comfortable that the project will make enough revenue to pay off Neighborhood Improvement Development bonds.

The city issued NID bonds in 2009 after Cullinan was unable to sell community improvement district bonds. Property and sales tax revenues generated by the project are used to pay off those bonds. If the project were to fail, the city may have to pay some of those bonds.

Councilman Michael Klinghammer, Ward-7, said there's still a cushion in between how much the project is expected to generate and how much is needed to pay off the NID.

"How much taxes is it really going to generate?" Klinghammer said. "It's all based on estimates and looking at the market and seeing what's working right now and what's not. It is important that we continue to look at it."

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