ST. LOUIS 鈥 Developer Lux Living is seeking final approval for a property tax abatement on a 150-unit apartment building under construction on DeBaliviere Avenue, an incentive the city鈥檚 economic development arm has blocked for a year because of Lux鈥檚 dispute with a rival development across the street.
The final resolution granting the property tax break is on the Tuesday agenda of the city鈥檚 Land Clearance for Redevelopment Authority. Several months ago, Lux sued the agency that manages the LCRA, the 最新杏吧原创 Development Corp., and its former director, Otis Williams, accusing them of blocking the tax break by not taking the final vote.
The lawsuit, filed in January by a company managed by Lux principal Victor Alston, has not been previously reported. In it, Alston asks a judge to force the SLDC to perform its 鈥渕inisterial duties鈥 and take the final action to grant the property tax break for the project, which is under construction. The suit also claims SLDC has a duty to issue it a sales tax break on construction materials after Alderman Shameem Clark-Hubbard, 26th Ward, sent a letter to SLDC in support of the incentive, worth about $750,000 according to the lawsuit. The tax break on construction materials is not on Tuesday鈥檚 LCRA agenda.
People are also reading…
Alston, in his lawsuit against SLDC, says his lender would not have extended financing without the 鈥減romise鈥 of the incentives. The suit said project costs increased because it hired minority and women-owned firms as required by the SLDC 鈥渋n anticipation鈥 of receiving the property tax break, worth about $3 million in today鈥檚 dollars. It also says Lux has been unable to pay 鈥減revailing wages,鈥 or a wage floor for city-subsidized projects, because SLDC has not given final approval to the tax breaks.
Williams signaled last spring that his office would not go forward with the tax abatement until Lux settled a dispute with developer Jeff Tegethoff, who is building the 285-unit Expo at Forest Park across DeBaliviere Avenue on land adjacent to a MetroLink station. In 2019, Lux鈥檚 lawyer, Clayton Alderman Ira Berkowitz, reincorporated a long-dormant property owners association that claimed to hold review rights over the competing apartment development and declined to support the project.
The developer says attorneys for Tegethoff鈥檚 project, David Richardson and other lawyers at Husch Blackwell, 鈥減ersuaded Williams and SLDC to not process owner鈥檚 sales tax exemption and redevelopment agreement until the (association) withdraws its objection to the other project.鈥
The SLDC has asked the judge to dismiss the lawsuit. In its pleadings, it says it has discretion over tax incentive requests.
A spokesman for SLDC said that the agency couldn鈥檛 comment on pending litigation but that the LCRA board plans to table the resolution on Lux鈥檚 project at the Tuesday meeting. Lux鈥檚 attorney for its case against SLDC, Joe Jacobson of Jacobson Press, declined to comment. A hearing is scheduled for July 19.
Williams retired a week ago. There had been no public movement at the development agency on the project for months until recent days, when it was placed on Tuesday鈥檚 LCRA agenda.
鈥楢 neighborhood issue鈥
Despite concern from Alderman Heather Navarro that the city shouldn鈥檛 subsidize a developer trying to undermine a competitor, the Board of Aldermen passed a bill last summer granting a 10-year property tax abatement on 80% of the value of new construction for the Lux apartment building at 310 DeBaliviere Avenue.
Soon after the vote, Lux sued Tegethoff鈥檚 development company, saying the property owners association that Berkowitz reincorporated, the Commercial DeBaliviere Place Association, had not approved the project.
Lux principals Alston and Sid Chakraverty claimed that their concern with Tegethoff鈥檚 project, which the city also endorsed with $14 million in tax increment financing, was that it didn鈥檛 provide enough parking for the neighborhood. The project was billed as a 鈥渢ransit-oriented鈥 development adjacent to a MetroLink station.
Tegethoff鈥檚 firm countersued, accusing Lux and Berkowitz of trying to 鈥渞esurrect鈥 the old property owners association after nearly 30 years of inactivity 鈥渇or the apparent purpose of enforcing a long-dead architectural control provision to deny their approval鈥 of Tegethoff鈥檚 project.
鈥淭he asserted parking concern is simply a pretext to delay or prevent the (Tegethoff) redevelopment and provide a competitive advantage to Alston and Chakraverty鈥檚 competing development,鈥 the countersuit says.
Tegethoff and his attorney, JoAnn Sandifer of Husch Blackwell, declined to comment.
Alston and Berkowitz did not respond to requests for comment. In an interview last year, Alston denied that he was trying to slow a competitor.
鈥淚 really don鈥檛 see this as a developer issue,鈥 he said then. 鈥淚 see this as a neighborhood issue.鈥
Earlier this month, 最新杏吧原创 Circuit Court Judge Joan Moriarty granted a motion from Tegethoff鈥檚 attorneys for sanctions against the old property owners association that had been represented by Berkowitz, saying it has ignored discovery motions.
鈥淥ld Association鈥檚 conduct reflects a contumacious and deliberate disregard for the trial court鈥檚 authority,鈥 she wrote in a June 10 order.
Lux Living is among the most active residential developers in the area, recently pitching a new project in the Central West End. Last year, Lux prompted a new clawback policy for SLDC property tax breaks after it sold properties at prices well above the development costs city analysts used to calculate their tax incentives.
