North side development moves forward

By Audrey Spalding
Show-Me Institute

A proposed $8.1 billion development of the city of Saint Louis’ north side will take another step forward this week. Two board bills are scheduled to be introduced at the city’s Board of Aldermen meeting on Friday.

The first, #218, is a draft ordinance to approve the proposed development, and to enter into a development agreement with NorthSide Regeneration, LLC, the company behind the project. The second, #219, is a draft ordinance to approve tax increment financing (TIF) for two of the four designated areas of the project. The TIF monies for those two areas, if approved, would come to a total of $200 million, just over half of the $390.6 million that NorthSide Regeneration is asking the city to approve for the entire project.

Whether the city will back any bonds issued on future TIF monies is unclear.

The Board of Aldermen can’t vote on these bills right away; the bills may be assigned to a committee, and must be read at least two  more times at subsequent board meetings before being put up for vote. The vote may not happen for weeks, or even months, although the draft redevelopment agreement lists Dec. 2009 as its expected approval date.

Attached to the bills is a 102-page draft redevelopment agreement between NorthSide Regeneration and the city. The draft agreement is similar to the previous versions of NorthSide’s TIF application. There is also some new language in the draft agreement concerning how the city and development company can terminate the agreement, the transfer of properties from the city to the developer, and conflicts of interest.

According to the draft agreement, NorthSide Regeneration can terminate its agreement with the city as long as no TIF obligations are outstanding, while the city can do so if the development company either fails adhere to its development schedule, violates the agreement, becomes bankrupt, fails to pay TIF application fees and administrative costs, or abandons the development.

If the draft agreement is approved as is, a large number of properties will be given from the city to the development company. Currently, the city and city-based agencies own about 1,400 vacant properties in the development area.

Most of those properties are held by three agencies tasked with acquiring foreclosed or abandoned properties, and then either selling those properties or holding them in anticipation of a large-scale development.

Another portion of the agreement explicitly states that public officials involved in the process of negotiating or approving the development cannot have personal or corporate stakes in the development.

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