Tax Increment Financing in St. Louis

Tax increment financing (TIF) is one of the primary economic development tools available to local governments in St. Louis, enabling the redevelopment of blighted or underperforming properties by directing future property and sales tax growth toward project costs. This page covers how TIF is defined under Missouri law, the mechanics of how districts are created and funded, the types of projects where TIF is commonly applied in the St. Louis region, and the boundaries that determine when TIF is an appropriate instrument versus when other financing mechanisms apply. The St. Louis Metro Authority home provides broader context on the governance structures within which TIF operates.

Definition and scope

Tax increment financing in Missouri is governed by the Missouri Real Property Tax Increment Allocation Redevelopment Act, codified at Missouri Revised Statutes §§ 99.800–99.865. Under this framework, a municipality designates a defined geographic area as a TIF district after making findings that the area is "blighted," a "conservation area," or an "economic development area" as those terms are defined in the statute. Once designated, the baseline assessed value of property within the district is frozen. Any increase in tax revenue above that frozen baseline — the "increment" — is captured and redirected to retire debt or reimburse costs associated with the redevelopment plan rather than flowing to the general funds of overlapping taxing jurisdictions.

In St. Louis City, TIF authority is administered through the St. Louis Development Corporation (SLDC), which staffs TIF commissions and coordinates the application and review process. St. Louis County municipalities each retain independent TIF authority under state statute. A TIF district in Clayton, Missouri operates under the same Missouri statutory framework but through Clayton's own local government process — it is not administered by St. Louis City.

Scope limitations: This page covers TIF as applied within the City of St. Louis and, by reference, St. louis County municipalities operating under Missouri statute. It does not address Illinois TIF law, which governs projects in Metro East communities such as East St. Louis, Belleville, or Alton — those fall under the Tax Increment Allocation Redevelopment Act, 65 ILCS 5/11-74.4-1 et seq., a distinct statutory regime. Projects in Illinois metro counties are outside the coverage of this page.

How it works

The TIF mechanism operates through a structured sequence of steps defined by Missouri statute:

1. Application and eligibility finding — A developer or municipality submits a redevelopment plan. A TIF commission, composed of representatives from affected taxing districts, holds a public hearing and evaluates whether the area meets statutory blight, conservation, or economic development criteria.
2. Baseline assessment — The county assessor certifies the "equalized assessed valuation" of the district at the time of designation. This certified baseline is frozen for the life of the TIF, which may not exceed 23 years under § 99.847 RSMo.
3. Increment capture — As redevelopment occurs and property values rise, the incremental property tax revenues above the frozen baseline are deposited into a Special Allocation Fund (SAF). Missouri TIF also captures 50% of the increment from economic activity taxes — principally sales taxes — generated within the district.
4. Debt retirement or reimbursement — The SAF pays debt service on TIF bonds or directly reimburses the developer for eligible project costs, which typically include land acquisition, site preparation, infrastructure, and environmental remediation.
5. Reversion — Once TIF bonds are retired or the 23-year cap is reached, the full tax base reverts to all overlapping taxing jurisdictions, including school districts, special districts, and the city or county general fund.

A key distinction exists between pay-as-you-go TIF and TIF bond financing. In pay-as-you-go structures, the developer advances costs and is reimbursed as increment accumulates — carrying more risk but imposing no bonded debt on the municipality. In bond-financed TIF, the municipality or a development authority issues bonds backed by anticipated increment, accelerating project funding but creating a municipal debt obligation if increment projections fall short.

Common scenarios

TIF in St. Louis has been applied across a range of project types that reflect the region's redevelopment priorities:

• Downtown commercial redevelopment — Large mixed-use projects in the St. Louis central business district have used TIF to offset the high costs of rehabilitating historic structures or assembling fragmented parcels. The Ballpark Village development near Busch Stadium involved a TIF district approved by the St. Louis Board of Aldermen, now the St. Louis Board of Aldermen successor body under the city's governance reorganization.
• Neighborhood blight remediation — TIF has been applied to residential-anchored mixed-use projects in neighborhoods with documented vacancy rates and depressed assessed values, where private capital alone is insufficient to cover remediation and infrastructure costs.
• Retail and sales-tax-generating projects — Because Missouri TIF captures 50% of incremental sales tax, municipalities have used it to attract retail anchors or entertainment facilities projected to generate significant economic activity taxes, supplementing property tax increment with a larger revenue stream.
• Industrial and logistics sites — Brownfield properties with environmental contamination have qualified as blighted areas, allowing TIF to fund remediation costs that would otherwise make projects economically infeasible.

Decision boundaries

TIF is not universally appropriate, and Missouri statute establishes both procedural and substantive thresholds that determine its applicability.

The "but for" test is the central eligibility requirement: a project must not be economically feasible without TIF assistance. This finding must be supported by a financial analysis reviewed by the TIF commission. Projects that are financially viable without public subsidy fail this test under § 99.810 RSMo and are ineligible.

TIF competes with and sometimes complements other St. Louis-area development tools. St. Louis Community Improvement Districts and St. Louis Special Taxing Districts address ongoing operational costs like maintenance and security rather than capital redevelopment gaps, making them structurally distinct from TIF. Chapter 353 tax abatement under Missouri's Urban Redevelopment Corporations Law offers property tax abatement without the increment-capture mechanism, which may be preferable when overlapping taxing districts — particularly school districts — oppose diversion of their revenue into a Special Allocation Fund.

School district opposition is a recurring tension in TIF approvals. Because increment is diverted from school district levies for up to 23 years, the St. Louis Public Schools and St. Louis County school districts scrutinize TIF proposals through their commission representatives. Missouri statute requires TIF commission approval before a redevelopment ordinance takes effect, giving affected taxing bodies a formal role — though the final approval authority rests with the municipal legislative body, which is the Board of Aldermen in St. Louis City.

Geographic eligibility also creates a boundary. A TIF district must be contiguous and must meet one of the three statutory area classifications. A parcel in a fully stabilized, high-value neighborhood cannot be designated blighted solely to subsidize a preferred project — the area-wide finding requirement prevents single-parcel TIF designations that lack genuine redevelopment need.

References

• Missouri Revised Statutes §§ 99.800–99.865 — Real Property Tax Increment Allocation Redevelopment Act
• St. Louis Development Corporation (SLDC)
• Missouri Department of Economic Development — Community Development
• Illinois Tax Increment Allocation Redevelopment Act, 65 ILCS 5/11-74.4-1
• City of St. Louis Board of Aldermen — Legislative Records
• Missouri State Auditor — TIF Reports