ST. LOUIS 鈥 Executives of one of the nation鈥檚 largest affordable housing developers, ensnared in a bitter feud with a powerful 最新杏吧原创 political family, are now saying that the family wanted legal control over some investment decisions at a key north side housing complex renovation.
In a no-holds-barred interview on Wednesday, the top executives of 最新杏吧原创-based McCormack Baron Salazar blasted Rodney Hubbard Sr., the nonprofit Carr Square Tenant Management Corp. that he runs, Hubbard鈥檚 daughter, Alderman Tammika Hubbard, and their attorneys, for trying to insert themselves into decision-making on the project.
Carr Square was also seeking a 7.5% cut of McCormack鈥檚 development fees. But that wasn鈥檛 the holdup, the executives said.
鈥淚t鈥檚 never been about the money,鈥 McCormack President Vincent Bennett said in an interview with the Post-Dispatch editorial board on Wednesday. 鈥淚t鈥檚 never been about the fees. It鈥檚 been about control, and through extension, concerns that (Tammika Hubbard) had about where and how the grant was going to be directed and utilized.鈥
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鈥淚f it was just about the money,鈥 he added, 鈥渨e鈥檇 be done.鈥
The Hubbards鈥 attorneys fired back on Thursday, outright denying the developer鈥檚 story.
Neither the Hubbards nor their attorneys ever sought legal control over project money, said Stone Leyton & Gershman attorney Bill Clendenin, who represents Carr Square. He called McCormack鈥檚 assertions 鈥渁 very troubling mischaracterization of Carr Square鈥檚 position.鈥
The dispute continues to shed light on powerful interests鈥 efforts to profit from the development of the near north side, long a poor area of the city, but whose stock is rising now that the National Geospatial Intelligence Agency鈥檚 western headquarters is under construction there.
The rift between McCormack Baron, which has already begun renovations on the 675-unit low-income Preservation Square community, and the Hubbards spilled into public view late last year, four years after 最新杏吧原创 won the $30 million Choice Neighborhoods grant from the U.S. Department of Housing and Urban Development. Alderman Hubbard sponsored a bill barring construction permits in the project footprint 鈥 though it never received a hearing. She has also refused, McCormack officials say, to introduce bills vacating a city street in Preservation Square and granting property tax abatement to the project, a common development subsidy, particularly for low-income housing.
McCormack is one of the nation鈥檚 largest affordable housing developers, financing its projects mainly with federal grants and tax credits. Its co-founder, Richard Baron, has a long history on the near north side, first representing tenants as a young legal aid lawyer during the rent strike of 1969 and later redeveloping former public housing sites there. He said he actually drew up the original incorporation papers of Carr Square Tenant Management Corp., which was designed to organize public housing tenants following the rent strike.
The HUD grant, combined with tens of millions of dollars worth of state and federal low-income housing tax credits McCormack has won, is supposed to help finance the Preservation Square project as well as pay for social services in the neighborhood. The project began construction last summer and is a top priority of the city, which is administering the HUD grant.
McCormack 40 years ago partnered with Carr Square, before it was controlled by Rodney Hubbard Sr., in the original construction of Preservation Square, then known as O鈥橣allon Place. McCormack officials said they were open to a partnership on the current redevelopment so some money could be put into neighborhood programming.
鈥榃hat are you talking about?鈥
Bennett, McCormack鈥檚 president, said negotiations broke down when Carr鈥檚 attorneys asked for 鈥渧eto and approval rights鈥 over some of the project鈥檚 financial transactions.
鈥淭here were a lot of other controls that were requested by Carr鈥檚 attorneys that, we just said, we鈥檒l never get there,鈥 he said. 鈥淎t every turn, the issues come back to control of the grant, control of the resources, and some understanding or misunderstanding that these are frankly federal funds between HUD and the city.鈥
Clendenin, Carr鈥檚 attorney, provided several drafts of an agreement between the two sides from early 2020 suggesting that some of the dispute revolved around whether Carr Square would be able to approve McCormack鈥檚 future development agreements. The drafts, the last of which was sent in March 2020, indicate that the controls Carr Square sought were over the payment of the sub-development fee to Carr Square 鈥 estimated at $169,000 of the $2.25 million McCormack expected in developer fees on the first phase.
McCormack would get Carr Square鈥檚 cooperation in vacating streets, zoning and tax abatement 鈥 all actions that in 最新杏吧原创, an area鈥檚 alderman informally controls.
Carr Square in return wanted to be able to approve any new agreements proposed by McCormack that would prohibit the payment of the sub-development fee. It also wanted language removed that subjected Carr Square鈥檚 payment to approval by HUD and the city.
Clendenin said that provision 鈥渨as defensive in nature.鈥 Carr Square didn鈥檛 want McCormack Baron to divert fees due to Carr Square through sub-development agreements.
Another issue: Carr Square wanted its portion of the development fee 鈥渦p front,鈥 said Baron, the company鈥檚 chairman.
鈥淎nd we said, 鈥榃hat are you talking about?鈥欌 Baron said. 鈥溾橸ou鈥檒l get your funds when we get our funds.鈥 We basically said, 鈥楲isten guys, this is the way the world works. You understand this very well.鈥 Stone Leyton & Gershman has done all kinds of tax credit jobs.鈥
But Clendenin said Carr Square had been burned by McCormack before. Receiving the fees up front, he said, gave Carr the 鈥渂est chance at actually receiving the development fee.鈥
Nor could the two sides agree on whether Carr Square even still had an ownership interest in the Preservation Square property. McCormack maintains that Carr Square鈥檚 interest was reduced in past refinancings of the property. Carr Square repeatedly insisted that its ownership interest should be purchased 鈥 though a dollar figure still needed to be negotiated, according to the drafts.
While negotiations were ongoing, Clendenin said McCormack 鈥渨as actively trying to eliminate Carr Square鈥檚 ownership interest in Preservation Square.鈥
When financing for the project ultimately closed last summer, the property was transferred to a company controlled by the city鈥檚 economic development arm 鈥 the 最新杏吧原创 Development Corporation. SLDC says the structure was only designed to lower McCormack鈥檚 federal income tax burden.
Carr School
Among the Hubbards鈥 biggest complaints are that plans never moved forward to rehab Carr School, two blocks south of Preservation Square, and turn it into a community center. McCormack said that鈥檚 because the structure is in such poor shape that HUD later decided that Choice grant funds couldn鈥檛 be put toward it.
Baron and Bennett maintained that they wanted to develop a community center and tried to find another way. Carr School is owned by Carr Square. The ground surrounding it is owned by NorthSide Regeneration, the Paul McKee-led effort to compile property in north 最新杏吧原创, in which Carr Square is partner. Plans to renovate the school had to involve NorthSide. Baron and Bennett said they met several times to discuss alternatives with McKee, Rodney Hubbard and Steve Stone, NorthSide鈥檚 attorney and a partner in Stone Leyton & Gershman.
鈥淭ammika Hubbard never sat in a single meeting we had about the community center,鈥 Baron said. 鈥淣ever. Not one. Would not talk to us. I asked Rodney repeatedly, why isn鈥檛 Tammika at the table? This is her ward. Isn鈥檛 she interested in this community center?鈥
Tammika Hubbard confirmed via email she didn鈥檛 attend those meetings. But she said she didn鈥檛 believe McCormack was acting in good faith to find another development plan for the community center. McCormack, she said, 鈥渢ricked鈥 her and her constituents about the school.
McCormack has worked on multiple HUD Choice grants across the country, she said. 鈥淭hey knew the rules,鈥 she wrote. 鈥淢BS brought renovation of the school to the table for a state-of-the-art community center. Then almost four years later they said that it was not allowable.鈥
Baron said Carr School talks broke down after Stone Leyton attorneys continued to push for legal rights over the private development agreements required to bring on tax credit investors. He wasn鈥檛 about to let an outside party insert itself into the project like that, he said.
鈥淓very time we got down to having an agreement, the lawyers for Carr Square kept adding specific requirements on our part giving them control over this or that and made it so impossible to try and work this out that finally I just decided it wasn鈥檛 worth the time,鈥 Baron said.
Regardless, Baron and Bennett say they鈥檙e still interested in helping to develop a community center in the area. They鈥檙e currently looking at the Elkay building next to Carr School, now owned by nonprofit Justine Petersen.
Bottom line, said the McCormack executives: The Hubbards and their lawyers can鈥檛 stop the Preservation Square project.
If they think they鈥檝e been cheated, Bennett suggested, they could always sue.
鈥淥bviously they have other recourse they could always have sought, legal or other,鈥 he said. 鈥淭hat鈥檚 not been sought.鈥
