EMERSON PARK
EAST ST. LOUIS, ILLINOIS
[ Emerson Park ]
Overcoming many obstacles, the City of East St. Louis and Emerson Park Development Corporation (EPDC) have partnered with McCormack Baron & Associates, the State of Illinois, the Danforth Foundation and others to begin a major transformation of the Emerson Park Neighborhood by developing the new residential community of Parsons Place. In order to begin the project, a final $2.5 million in contributions is required.
This initiative began in late 1997 when the BiState Development Corporation announced the eastward expansion of the mass transit MetroLink system including two new stations in East St. Louis. The Emerson Park Development Corporation was instrumental in locating one of the new stations in their neighborhood at 15th Street and Baugh Avenue. It will serve commuter traffic coming from Madison County and beyond with an 800 car parking capacity. The new Parsons Place Community is planned at 18th Street and Baugh Avenue. New housing will be built on both sides of the MetroLink rail line.
Emerson Park provides a unique opportunity for the redevelopment of a community that in 1960s was named an All American City. East St. Louis has experienced severe population loss and disinvestment over the last 30 years. The Emerson Park Development Corporation (EPDC) is a 501(c)3 neighborhood development organization active since the mid-80’s. In recent years they have participated in the construction of four (4) new single family homes, the rehab of seven (7) existing single family homes, the revitalization of Cannaday Park, clean up of over 100 lots filled with illegally dumped trash, hiring of two full-time professional staff and, as previously mentioned, worked diligently to locate a MetroLink Station in their neighborhood.
In conjunction with the development of Parsons Place, EPDC plans include the construction of 50 new single family homes for sale to moderate and middle income families, the revitalization of Parsons Field, the early training facility of Jackie Joyner Kersee, and the development of a new public elementary school. Emerson Park has recently been selected as one of nine Sustainable Neighborhoods, a regional effort of the St. Louis 2004 program. This designation has resulted in a $1 million investment by the Danforth Foundation in Parsons Place.
The Lessie Bates Davis Settlement House operates in Emerson Park providing day care, job training, family counseling and other community support services. EPDC has been awarded a HUD grant to sponsor a Youth Build program for this community and East St. Louis residents in general.
The new Jackie Joyner Kersee Youth Center is nearing completion. It is located just five blocks from Parsons Place and will provide another family resource for the residents of this community. It is projected that up to 3,000 commuters a day will visit Emerson Park with the opening of the 15th Street MetroLink Station in 2001. Emerson Park will be ready with attractive new housing opportunities and land assemblage completed for the development of retail centers to support the new housing and commuter traffic while providing additional opportunities for jobs and training for residents.
The following material more fully describes the Parsons Place project:
Parsons Place is a 174 unit proposed multi-family rental apartment development to be located in the City of East St. Louis. Supported by the Mayor and the City Council, this important project has been embraced by the regional efforts of St. Louis 2004 and represents a key initiative in the redevelopment of this distressed community. The positive momentum is the result of the following incentives and collaborations:
Corporate Donations (community loan) 2,500,000
Total Development Sources$24,600,000
Total Development Costs $24,600,000
Background
The Emerson Park Development Corporation (EPDC) is a non-profit Community Development Corporation involved in community and economic development activities that include, but are not limited to:
The Emerson Park Development Corporation was incorporated on May 24, 1989 for charitable purposes including the social, physical and economic development of the Emerson Park neighborhood of East St. Louis, Illinois. The organization was approved for 501(c)3 status in October 1995.
Emerson Park Development Corporation was established by a group of neighborhood men, women and youth led by Ms. Ceola Davis of the Lessie Bates Davis Neighborhood House in 1985. The original goal of EPDC was to enhance the quality of life in the 55 blocks comprising Emerson Park by uniting residents around the issues of unemployment, affordable housing construction and rehabilitation, environmental deterioration and crime prevention in the neighborhood. The organization's first effort was to organize the residents to count missing manhole covers and inoperable streetlights. The residents organized around this effort and were successful in lobbying City Hall to get the manholes covered and the streetlights restored. Neighborhood clean-up campaigns are an on-going process. Currently, there are two paid staff members. EPDC has successfully developed partnerships with both public and private entities in the region and in doing so has rehabilitated 6 owner occupied homes, assisted 14 families in securing funds for rehabilitation and constructed 7 new single family homes for low-income families. EPDC is now partnering with McCormack Baron & Associates, Regional Housing and Community Development Alliance and the City of East St. Louis to develop Parsons Place, a 174-unit multi-family, mixed income rental development with the assistance of a $2.23 million tax credit allocation from the Illinois Housing Development Authority.
The EPDC is a membership organization with an elected board of neighborhood residents. Currently, Mr. Richard M. Suttle, Sr. serves as President, Mr. Henry Peete is Vice President, Ms. Peggy Hume is Secretary, and Mrs. Cathy Tucker is Treasurer. Their bylaws articulate a commitment to a representative board of Emerson Park residents. Future plans include expanding the EPDC Board to thirteen residents and incorporating representatives from local and regional community development organizations. The geographic boundaries of the neighborhood (service area) are Interstate 64 to the south, Interstate 55-70 to the west, and the Alton and Southern Railroad on the east and north. See attached site maps.
Program Goals
Currently, EPDC has two primary program focus areas:
1. Housing development including, but not limited to: acquisition/rehab/sale, design/build/ sale to low to moderate-income homebuyers, mixed income/multi-family rental.
2. Construction Training and Education Program for low and very low income 18-24 year old young adults who are largely dependent on public support.
The markets being targeted are predominantly low to moderate-income families both for rental housing and home ownership. All of the rehab clients have been low to very low income families. The neighborhood is keenly aware, however, that it must attract middle income families. The goal is to recreate the neighborhood to what it was when East St. Louis was an All American City in the 1960s. It is hoped that the development of Parsons Place will begin the process of bringing middle income people back into the city. The population served at the present time is 98% African American with an average annual household income of approximately $9,600. Emerson Park has approximately 850 residents, 40% are under age 18. (This information is based on a recent neighborhood organization census.)
The goal of the EPDC is to recreate this neighborhood by assisting current homeowners in bringing their property into compliance with City code and developing new infill housing for low and moderate income families while improving public infrastructure and support services. EPDC regularly purchases land in the neighborhood and sells property to middle income families who wish to build in the neighborhood. One of the most important goals of the EPDC is to market the neighborhood well. The location is unique. In 2001, a MetroLink (light rail) station will open in Emerson Park with the largest parking capacity on the MetroLink line. This light rail station will connect East St. Louis residents to Lambert International Airport in St. Louis and Belleville Area College in Belleville, Illinois. The City of East St. Louis has approved $100 million of development in the City during 1999. Parsons Place, a 174 unit mixed income development, represents $24 million of the projected $100 million.
Accomplishments
A summary of accomplishments to date include:
EPDC Board Membership
All board members are Emerson Park residents. Due to recent growth and the goals of the organization, expanding the board to include bankers, attorneys, politicians, business people, benefactors, etc. is important to its future success. This process is underway. Residents are involved in the day to day operations and are all voting members of the organization.
Emerson Park Development Corporation works very closely with the Regional Housing and Community Development Alliance, the University of Illinois and CORO to assure residents develop into strong leaders of the community.
The City of East St. Louis Enterprise Zone was approved in 1996. The Illinois Enterprise Zone Act (Act) provides that a municipality or county may designate one or more community based organizations to be a designated zone organization (DZO). The Emerson Park Development Corporation (EPDC) was so authorized by ordinance of the City Council of East St. Louis in July, 1999. The Illinois Department of Commerce and Community Affairs (DCCA) approved the DZO application on August 25, 1999.
Under the Act, a DZO exists primarily for the benefit of zone residents and businesses and performs any of the services or functions set forth in Section 8 of the Act. The EPDC may now solicit and receive cash contributions for DCCA approved projects to improve the quality of life in the Enterprise Zone. Parsons Place the first phase of a planned multi-phase affordable rental housing development has been submitted to DCCA. Contributions are being solicited pending final project approval by DCCA.
EPDC is soliciting corporate contributions of approximately $2,500,000 to support the development of 174 affordable rental apartments with a total development cost of over $20,000,000 and public infrastructure and site preparation costs of $3,500,000. As an approved DZO, contributions to Emerson Park are eligible for the standard federal deduction and a double state income tax deduction. EPDC will loan the contributed funds to Parsons Place, L.P., a limited partnership formed to own this housing development. The loan will be secured by a non-interest bearing cash flow note. EPDC will receive the cash flow payments over the life of the project for reinvestment in the Emerson Park neighborhood.
The following examples represent an analysis of the federal and state income tax deduction benefits available at several contribution amounts. The DZO contributions, assuming a 34% federal tax rate, result in a 55-56% overall tax benefit.
|
ILLINOIS ENTERPRISE ZONE PROGRAM |
|
$500,000 CONTRIBUTION ANALYSIS |
|
Without |
With |
||
|
Contribution |
Contribution |
Tax Benefit |
|
|
Federal taxable income before |
|||
|
Charitable contribution |
$5,000,000 |
$5,000,000 |
|
|
Charitable contribution to DZO |
- |
500,000 |
|
|
Federal taxable income |
5,000,000 |
4,500,000 |
|
|
Federal tax (34% tax rate assumed) |
1,700,000 |
1,530,000 |
$170,000.00 |
|
Illinois Base Income |
$5,000,000 |
$4,500,000 |
|
|
DZO Contribution (500,000 x 2) |
- |
1,000,000 |
|
|
Net Illinois Income |
5,000,000 |
3,500,000 |
|
|
Illinois Net Replacement Tax |
124,688 |
86,625 |
|
|
Illinois Net Income Tax |
239,400 |
166,320 |
|
|
Total Illinois Tax |
$364,088 |
$252,945 |
$111,143 |
|
Total Tax Benefit |
$281,286 |
Net after tax cost of $500,000 donation $218,714
Note: In order to receive the Illinois double tax deduction, the contribution
must be made by a Subchapter C Corporation.
|
ILLINOIS ENTERPRISE ZONE PROGRAM |
|
$100,000 CONTRIBUTION ANALYSIS |
|
Without |
With |
||
|
Contribution |
Contribution |
Tax Benefit |
|
|
Federal taxable income before |
|||
|
charitable contribution |
$ 400,000 |
$ 400,000 |
|
|
Charitable contribution to DZO |
- |
100,000 |
|
|
Federal taxable income |
400,000 |
300,000 |
|
|
Federal tax (34% tax rate assumed) |
136,000 |
102,000 |
$34,000 |
|
Illinois Base Income |
$ 400,000 |
$ 300,000 |
|
|
DZO Contribution (100,000 x 2) |
- |
200,000 |
|
|
Net Illinois Income |
400,000 |
100,000 |
|
|
Illinois Net Replacement Tax |
9,975 |
2,475 |
|
|
Illinois Net Income Tax |
19,152 |
4,752 |
|
|
Total Illinois Tax |
$ 29,127 |
$ 7,227 |
$21,900 |
|
Total Tax Benefit |
$ 55,900 |
Net after tax cost of $100,000 donation $ 44,100
Note: In order to receive the Illinois double tax deduction, the contribution must be made by a Subchapter C Corporation.