Loophole allowing Missouri developers to pay less in property taxes

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by Chris Nagus and John O'Sullivan

KMOV.com

Posted on November 15, 2011 at 10:38 PM

Updated Tuesday, Nov 15 at 10:46 PM

(KMOV) --  Property worth more than one million dollars and the taxes are only $10.

Two weeks ago News 4 told you about a tax loophole that allows developers to reclassify their land as farms by simply planting red clover - allowing them to pay a fraction in taxes.
While Chris Nagus was working on that story, he discovered the problem is even bigger than first imagined.

The St. Louis County Assessor Jake Zimmerman says the law needs to change.
"No one should be pretending to be a farm when they're not a farm" Zimmerman told News 4.
 
Zimmerman told us about one portion of a parking lot in Chesterfield, MO that is classified as a farm.
It is a portion of the PF Chang’s parking lot in Chesterfield and the adjoining vacant land.
Zimmerman says the commercial value is $1,029,600.
He says the taxes should be $30,246 but since it's classified as farmland the taxes are $9.92.
 
This loophole comes as no surprise to Tony Grasso who says it's been an issue for years. 
Grasso says his family business owned 80 acres of prime South St. Louis County real estate for decades and it was never a farm, but it was classified as agriculture for tax purposes.
He says they sold it to a developer for almost 10 million dollars and they only paid about 385 dollars in real estate taxes.
 
Zimmerman says there's all kinds of quirks that allow deals most people can't get.
He says the land at Creve Coeur airport should have a commercial value of $282,700 placing their taxes at $7,942 but since it's agriculture it's only $68.
An airport manager told News 4's Chris Nagus it's because Creve Coeur Airport is technically a reliever for Lambert - St. Louis International Airport.
Since it has that designation the land underneath the buildings can be classified as farmland.
 
Zimmerman also says he battled the owners of the old Ford plant site in Hazelwood when they attempted reclassify the land as farmland.
That was the same site that was authorized for up to $5 million in tax credits to clean up toxic waste.
Zimmerman told us "they claimed they hired a farmer to grow crops on this land, you know what we did, we checked with the city of Hazelwood. Turns out you need a permit to have a farm in Hazelwood, they didn't get that, so we were able to get them."
 
The Assessor says the commercial taxes on this property would have only been $1,783 instead of $759,607, if the developers were successful at calling this a farm.
With the current law in place, Zimmerman doesn't expect this to be the last farm battle on his agenda.
"Why should anyone have the opportunity to play these games even when it's legal when we can't fight it, it's time for the legislature to change the law" says Zimmerman.
 
A representative with the redevelopment corporation at the old Ford site told News 4 the tax decision is in on appeal.
The city planner in Hazelwood says farming is permitted in industrial parks, but nobody ever asked him to reclassify the land as farmland and he's not sure what he would decide until he's confronted with the issue.
 
Let us know what you think, is this just a tax loophole for the rich, do you think the county would let you call your backyard a farm?

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