Developer predicts STAR bonds will pass this year; job estimates rely on software

Steve Korris Apr. 9, 2010, 1:59am

COLLINSVILLE - Developers of the proposed University Town Center (UTC) in Glen Carbon released a study Thursday that predicts 12,700 construction jobs would be created over the course of 14 years.

UTC consultant Richard Ward of Zimmer Real Estate Services in St. Louis puffed up the numbers in a press conference at the electrical workers union hall in Collinsville.

A handout shows he reached the construction jobs figure by multiplying 464 average construction jobs per year by 14 years, for 6,500, and adding 6,200 in "related indirect jobs."

He also predicted about 11,700 permanent jobs on site at completion.

The developers' study states that IMPLAN provided estimates.

IMPLAN, a Minnesota business, however, is a company that provides software for economic development.

The software produced a prediction that on completion of the UTC project in 2025, the region would realize a net gain of 5,770 full time jobs.

A handout shows the net gain of permanent jobs inflated from 5,770 to 6,600 by counting part time jobs, with an additional 5,160 indirect jobs.

Ward and developer Bruce Holland aimed to build support for sales tax and revenue (STAR) bonds legislation that would capture most of the project's retail sales taxes for repayment of the bonds.

Holland said he expects pending STAR bonds legislation to be revised, rather than be re-introduced as a new bill.

Currently, two separate bills unrelated to revenue host STAR bonds amendments. In the Senate, STAR bonds language amends the Mental Health and Developmental Disabilities Administrative Act in SB2093. In the House, the legislation amends the State Facilities Closure Act in HB2376.

"We're going to get it done this year," Holland said.

A reporter at the UTC press conference asked Holland about opposition from mayors and the withdrawal of State Rep. Thomas Holbrook (D-Belleville) as a sponsor of the bill.

Holland said when the study gets out, it will show the truth.

Holland said State Sen. James Clayborne (D-Belleville) has been a staunch supporter.

The Southwest Illinois Council of Mayors opposes the legislation and has been successful in getting most of the area's state legislators to drop their support for the plan.

The group, comprised of more than 40 area mayors, says it supports development and job creation, but not through the proposed "unprecedented" public funding of private development.

Mayors stood with Holbrook, State Rep. Jay Hoffman (D-Collinsville) and State Sen. William Haine (D-Alton) and other public officials at a press conference in March where the legislators announced they were backing away from the bill. Clayborne did not attend and did not return a reporter's call regarding his position.

"The use of public tax funds for the purpose of acquiring property that will be owned by a private developer, the use of public funds for site development, and unprecedented use of public funds for private property development is simply unacceptable," the council wrote in a statement in response to the UTC study.

Earlier in the year, the mayors hired PGAV Urban Consulting in St. Louis to conduct an economic impact study. It was released in March and offered dire predictions for the region surrounding the proposed development. The study estimated that communities surrounding the project could lose more than $400 million in annual retail sales.

PGAV Vice President John Brancaglione, who conducted the research, refuted UTC's job estimates.

"As our analysis points out, UTC's job creation effect is significantly less than UTC purports when other factors are considered, including the likelihood that many of the retail and construction jobs created at UTC would simply replace jobs lost at other locations or replace jobs that would have been created elsewhere," Brancaglione said in a statement.

Brancaglione also stated that the new development plan is "considerably different" than what was unveiled earlier, and when the mayors commissioned their study.

"By continuously changing their plan, UTC is making it impossible for legislators, mayors of Metro East communities, and the public to understand the impact of their project (to) justify special legislation to support the project," he stated.

The Illinois Department of Revenue also has blasted the project, stating in a fiscal note that UTC would cannibalize other retailers and cost the state at least $15 million a year in lost taxes.

A reporter asked if the Department of Revenue made an error in its review.

"At the request of the governor we met with them, and we believe they are looking at it much differently now," Holland said.

UTC's report

Ward said residents of Madison and St. Clair counties spend $5.6 billion on retail purchases, but they spend $800 million of it in other places.

"Sales are leaking from this market," he said.

"Right now, almost no one is coming to shop in the Metro East, the two counties, that doesn't live here."

He said the project, which would be built at the intersection of I-270 and Route 162, would bring visitors from Missouri and from 200 miles around.

He said Lego Land, a possible anchor tenant, was looking at the project and furniture store Ikea was possible.

Holland said Lego Land was interested if the legislation passed.

A reporter asked if Lego Land went to Florida instead.

"They are still in the game, very much so," Holland said.

He called Lego Land a powerful magnet for children.

"They will come from hundreds of miles around to be in this facility, no question about it," he said.

The study, by Development Strategies of St. Louis, describes many features for the first time.

It calls for 1,142 residential units.

It calls for 400,000 square feet of office space, equal to the biggest office center in the two counties, at Fairview Heights.

It calls for four hotels with 820 rooms, a fifth of the current total in the two counties.

Dave Toenjes of the bricklayers said construction at Conoco Phillips in Wood River and Prairie State Energy in Lively Grove were blessings but added, "Not all the crafts get that work."

He asked the governor to sign the bill and help folks get back to work.

Ken Noll, owner of the Garden Kingdom on the project site, said mayors oppose it, but all communities stand to benefit from millions of new visitors.

"People will be driving hundreds of miles to visit our community," he said.

How much will developers get?

The development group includes John Costello, son of U.S. Rep. Jerry Costello, so a reporter asked how much the congressman's son would make off the project.

"We really haven't looked at that," Holland said.

He said his nephews Chad Holland and Ryan Holland, also in the development group, have been friends of John Costello for years.

"They have done business together for years," he said.

"They came out here and looked at this ground before I was ever involved," he said.

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