NorthSide development moves quickly, will be considered Friday
By Audrey Spalding
Show-Me Institute
An $8.1 billion development of the city of Saint Louis’ north side moved closer to final approval on Thursday when the Housing, Urban Development, and Zoning (HUDZ) committee voted 13-1 to pass the project forward to the Board of Aldermen.
The project, put forward by developer Paul McKee and NorthSide Regeneration LLC, needs city approval because it calls for $390.6 million in tax increment financing (TIF). The two bills passed by the HUDZ committee establish a redevelopment agreement with the city (available online as an attachment to this PDF document), and approve up to $200 million in TIF monies for the first half of the development.
McKee spoke briefly for the project and stressed the number of construction and permanent jobs it could bring. “We’re excited to put a sign on the north side that says ‘open for business,’” he said.
Only Alderman Terry Kennedy voted against the bills. Prior to voting, Kennedy spoke at length about how he disapproved of the secretive way in which the development company had gone about purchasing land. He was referring to how the company had purchased more than 900 properties in the north side with 12 shell companies designed to hide the fact that a large-scale buy-up was taking place.
“I personally cannot support that approach,” Kennedy said.
The committee hearing, which took about three hours, included a long explanation of the project by Deputy Mayor for Development Barbara Geisman, questions from committee members, and public comment.
Two controversial parts of the proposed development were discussed at length but still left somewhat unresolved. The first, whether the city would back any of the bonds generated from loans taken against the future promise of TIF monies, was not considered at the committee hearing, nor is city backing included in the proposed development agreement.
“There is no city guarantee,” Geisman said. “But again, this issue may be revised at a later date.”
The other point of controversy, the use of eminent domain, was argued back and forth by members of the public and city officials during the public comment portion of the meeting, with Alderman April Ford-Griffin calling fear of eminent domain based on misinformation and myths.
“It’s still in this bill,” said Keith Marquard, an active critic of the proposed development. “It’s a lie to say that it is not.”
Geisman said repeatedly during her presentation that eminent domain was not allowed in the redevelopment agreement, but that if it came down to it, situations could arise in the future “where individual aldermen believe eminent domain is necessary.”
If the project continues to move quickly through the city government approval process, McKee said that the development company will apply for $20 million in state tax credits this year.
Those tax credits, established with the Distressed Areas Land Assemblage (DALA) Tax Credit Act, allow a developer of a large-scale development to collect up to $20 million each year in reimbursement for 50 percent of land acquisition costs (which can include real estate brokerage fees, demolition of vacant buildings, and maintenance costs) and 100 percent of maintenance costs. No other developer has yet applied for the DALA tax credits.
Alderman Antonio French, who was present at the hearing but not a committee member, questioned Paul McKee about how those tax credits would be used.
“Will you use Distressed Area Land Assemblage Tax Credits to redevelop the area or just pay down your debt?” he asked.
Geisman answered the question, first clarifying that DALA tax credits could be used toward redevelopment, according to the state statute. She added that the tax credits could also be used to pay down debt “so that the developer can free up debt capacity to purchase new property.”
On Friday the bills will be read a second time at the Board of Aldermen’s weekly meeting. After a third reading the following week, aldermen could vote to perfect and pass the bills.