Some mayors not on board with revised STAR bonds proposal

By Ann Knef | Jan 12, 2010

Even though nearby municipalities would share in new property tax revenue generated by the development of a 900-acre retail project in Glen Carbon, some local mayors are still strongly opposed to the controversial University Town Center.

O'Fallon Mayor Gary Graham said a newer version of a sales tax and revenue (STAR) bonds bill is "like putting lipstick on a pig."

While he has not had a chance to review the entire 288 page amended bill released to area officials last Friday, Graham said: "We have never thought it was going to be good. This is not a good deal for the cities."

Troy Mayor Tom Caraker was more blunt. He said the proposed legislation is "despicable" in light of the state's inability to pay its bills.

The state is facing a deficit of nearly $9 billion and is behind in its Medicaid obligations.

A new STAR bonds bill introduced in a committee Monday by State Rep. Tom Holbrook (D-Belleville), would collect sales taxes generated by destination and entertainment tenants at University Town Center and channel 100 percent to developers. No sales tax would be collected from smaller tenants.

The new bill also would redistribute property taxes to offset the loss of sales tax revenues attributable to the STAR bonds district for municipalities and counties within 12 miles of the district.

The original bill passed last summer would have captured at least $15 million a year in state sales tax, of which 100 percent would have gone to UTC developers, which include Bruce Holland of Holland Construction and John Costello, son of U.S. Rep. Jerry Costello (D-Belleville).

Holbrook has not returned calls seeking comment.

Caraker spoke out against the bill last year, saying it would hurt existing businesses and stunt new growth in surrounding communities.

He repeated his criticism of the legislation in a phone interview Tuesday.

He called the re-direction of state sales tax to private developers a misappropriation of funds.

"People are hungry," Caraker said. "People are without medicine. People are losing their houses and losing their jobs."

"People are sick and tired of terrible representation," he said.

Caraker also said he was "livid" at how developers and legislators have pushed the proposal.

"This is a classic example of back door politics," he said.

Caraker said there have been many changes from the original bill.

"There are so many amendments it is difficult to decipher what this bill is saying," Caraker said.

Edwardsville Mayor Gary Niebur, whose community borders Glen Carbon, has not returned phone calls seeking comment.

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