最新杏吧原创

ST. LOUIS 鈥�聽It has been a messy divorce.

At City Hall, officials had lost faith that Paul McKee could finance the projects he promised, and聽allegations of state tax credit fraud, which surfaced last spring, were the final straw.

From McKee鈥檚 perspective, Mayor Lyda Krewson鈥檚 administration was pushing him out just as the land assemblage he began in north 最新杏吧原创 15 years ago was about to bear fruit with聽the $1.75 billion National Geospatial-Intelligence Agency facility聽鈥� a project even a top city official conceded would not have materialized without McKee鈥檚 making the initial pitch.

The city made the breakup official in June, scrapping the 2009 agreement that gave McKee鈥檚 NorthSide Regeneration control over 1,500 acres of north 最新杏吧原创 and rights to hundreds of millions of dollars in potential development subsidies.

And yet, Paul McKee is not gone.

The developer still owns more than 1,600 properties 鈥� more than 200 acres 鈥� surrounding the site of the future NGA campus. A lawsuit Bank of Washington filed after the city terminated McKee鈥檚 development rights, accusing the city of not adhering to a subsequent agreement giving him more time to begin projects, is pending.

Even if the city prevails in that lawsuit, NorthSide Regeneration, Bank of Washington and their team of lawyers from Stone, Leyton & Gershman will still hold considerable sway over the future of the neglected neighborhoods just north of downtown 最新杏吧原创.

Except for the vacant Pruitt-Igoe site, which McKee owns, there are almost no large, contiguous parcels in the area surrounding the NGA. That means people who want to develop big projects near the NGA will almost certainly have to work with McKee and the bank.

Meanwhile, most of the properties NorthSide owns continue to decay, dragging down the value and living conditions of the area even as the NGA holds the potential for a resurgence.

Few of those structures are salvageable, a far cry from the 152 rehabs McKee promised in a 2013 plan submitted to the city. More than 200 of NorthSide鈥檚 properties have been condemned by the city; many, unsecured and abandoned, have simply crumbled. The historic Clemens House, which McKee once promised to renovate and turn into senior apartments,聽burned in the summer of 2017.

McKee, in response, points to signs of new investment: the $19.6 million Zoom gas station and GreenLeaf Market grocery on North Tucker Boulevard, as well as a partnership with a builder constructing several energy-efficient houses in the 最新杏吧原创 Place neighborhood. The gas station opened in October; the grocery opens next month.

鈥淚 do think that NorthSide has already produced remarkable results 鈥榖eyond GreenLeaf鈥� by bringing NGA to north 最新杏吧原创,鈥� McKee said in a statement to the Post-Dispatch. 鈥淚 can鈥檛 help but express some frustration that this extraordinary success seems to get lost in the discussion.鈥�

He said that the lawsuit limited what he could say but that he looked forward 鈥渢o a future where the city鈥檚 litigation does not interfere with redevelopment of this long suffering area.鈥�

Bank of Washington CEO L.B. Eckelkamp Jr. said he鈥檇 鈥渓ove to see the fences mended鈥� between City Hall, his bank and NorthSide but maintained that the city improperly ended the development agreement.

Going forward, he said, the bank is open to lending to other projects in the area depending on the proposal. 鈥淭here鈥檚 nothing that prevents us from lending more.鈥�

There are few examples of large-scale investment in the city鈥檚 beleaguered north side, and McKee鈥檚 defenders say he鈥檚 been unfairly attacked for being the outlier who has actually tried to tackle such a difficult endeavor.

But a top 最新杏吧原创 development official said that as new information came out in聽a 2018 eminent domain trial聽that gave city attorneys access to some of NorthSide鈥檚 private records, it became clear that the developer did not have the money to make his dream a reality.

There had been signs for years: Requests for more development incentives. A lender pulling out of the grocery store deal. A stalled logistics park in Hazelwood. A failed bank that lent to McKee. No progress on a housing development despite interest from a national developer and a union investment fund.

鈥淲hat we want to see is, and be able to talk to, are developers who can actually get the work done,鈥� Otis Williams, director of the 最新杏吧原创 Development Corp., said in an interview last month. 鈥淲e realized there just wasn鈥檛 the amount of wherewithal 鈥� I call it wherewithal 鈥� financial capability there for the development to move ahead.鈥�

鈥楪iant vacuum鈥�

In 2009, when the city inked its development deal with McKee, no one else was proposing anything on that scale for north 最新杏吧原创. The city gave him a shot. The state gave him $43 million in tax credits through a special program his lawyers helped write.

It鈥檚 hard to know how much NorthSide and the bank have invested in total. In a 2013 letter to state officials, McKee said he had advanced $20 million of his own funds into buying land for NorthSide and guaranteed another $45 million from lenders.

Bank of Washington, in a letter to then-Mayor Francis Slay during the 2015 negotiations for the NGA land, said it and McKee had invested 鈥渨ell in excess of $50 million to establish site control鈥� of the NorthSide area. Including debt on the property in the NGA area, an acre should sell for about $261,000, Eckelkamp wrote the city in 2015.

There are other liens encumbering pieces of NorthSide鈥檚 land, too. In 2016, when McKee exercised his $1 million option to buy the 34-acre Pruitt-Igoe site from the city, two private companies 鈥� Jefferson & Cass Capital Investors LLC and Scarboro Services LLC 鈥� entered into financing arrangements with one of his companies. In real estate documents, Howard Smotkin, a lawyer with Stone, Leyton & Gershman, signed on behalf of Scarboro Services and Jefferson & Cass Capital Investors. The companies鈥� only addresses are a post office box and the firm鈥檚 office.

Smotkin said the firm鈥檚 lawyers were not investors in the project but were not authorized to comment about the limited liability companies involved in the transaction.

With debt piled onto the land and Bank of Washington looking to be repaid, the immense power the city granted to McKee by selling him more than 100 acres from its land bank in 2012 can鈥檛 just be taken away by canceling development rights. Williams said 鈥渋t鈥檚 a work in progress鈥� to make sure there was a way to assemble land and work with developers 鈥� including NorthSide 鈥� who had workable development proposals.

鈥淚 think our lesson is that carving out and putting that much territory into one development agreement is probably a mistake,鈥� Williams said. 鈥淭he tools that are used in large developments are good, but we understand now, and what we will do in the future, is have smaller areas and work with developments that are smaller in size, particularly with just a private developer. Where there are institutions and secured financing already in place, we might look at something like that. But with just an ordinary private developer who has visions, I think we would look at a smaller area.鈥�

Because of an underfunded planning department, and a comprehensive plan for 最新杏吧原创 only now being drafted, critics point to the chapter as the epitome of reacting to developer proposals.

鈥淭his is what happens after years of no planning,鈥� said Sarah Coffin, professor of urban planning and development at 最新杏吧原创 University. 鈥淭here鈥檚 this giant vacuum that is open to anyone to step into, especially when there are no guidelines for development.鈥�

At the state level, the Missouri Department of Economic Development has expressed concern at how McKee used some of the $43 million in tax credits he received. The Missouri attorney general鈥檚 office has a pending lawsuit accusing NorthSide of tax credit fraud.

鈥淭he purpose for this was to redevelop it, was to provide an opportunity for redevelopment to occur, and that鈥檚 where the public gains benefit,鈥� Sallie Hemenway, a former DED official, testified at the eminent domain trial in May. 鈥淭he public gains no benefit from an individual private person gaining access to their tax dollars that could otherwise go to other places to just simply put land in his or her own name.鈥�

Michael Allen, an architectural historian聽聽more than 12 years ago that聽McKee was behind the mystery companies buying up property in north 最新杏吧原创, gave credit to Krewson鈥檚 administration for taking the first steps to unwind the development agreement. But there鈥檚 still a long way to go.

鈥淚n some ways, it鈥檚 better now,鈥� Allen said. 鈥淏ut find three blocks in a row there that he doesn鈥檛 own property on. ... The capacity for the market to absorb McKee鈥檚 land at the price he wants to sell it is low, I think.鈥�

McKee said NorthSide 鈥渉as never been about land speculation, and still is not.鈥� He is 鈥渏ust getting started,鈥� and future projects will be 鈥渆ven more groundbreaking.鈥� But he expects the city will oppose the jobs and investment he proposes, so he declined to provide details.

鈥淣either (NorthSide) nor Bank of Washington is or will be satisfied to sit on their laurels in the hope that those who long ignored north 最新杏吧原创 will now invest,鈥� McKee said in written response to questions. 鈥淲e intend to move our redevelopment forward.鈥�

鈥楤illing him daily鈥�

While it awaits that promised redevelopment, the city has begun liberally using one of the only tools it has to prod landowners into putting their real estate into productive use.

Since last year, the city has billed NorthSide $154,000, mostly for vacant building fees but also for several demolitions, according to information from the Building Commissioner鈥檚 office. Vacant property fees can be added to the real estate鈥檚 tax bill. There鈥檚 thousands more billed for code violations.

鈥淲e鈥檙e billing him daily,鈥� said Deborah Williams, a manager who handles vacant property in the building commissioner鈥檚 office. 鈥淲e鈥檙e not done.鈥�

Until aldermen and Krewson acted to change it last year, an ordinance barred the city from fining properties within a development agreement area for code violations.

Since the end of 2018, the 最新杏吧原创 Building Division has filed six court actions seeking fines from NorthSide Regeneration for code violations on properties it owns. NorthSide has paid most of the fines, usually less than $1,000. Matt Moak, who handles problem properties in the city counselor鈥檚 office, said the city was treating McKee just like any other property owner now.

鈥淲e are now seeing cases starting to come towards us,鈥� Moak said. 鈥淭hey are just starting.鈥�

Whether that prods McKee into moving more quickly remains to be seen.

But in the last nine months, at least one person聽has managed to reach a deal with him.

In July, Dwight Arant purchased five lots from McKee on Montgomery Street for $100,000.

鈥淚 don鈥檛 buy into any of these things about the land value being high that he鈥檚 asking,鈥� Arant said.

Arant鈥檚 NetZero company is building three model homes that he said would be so energy efficient that owners wouldgenerate enough electricity from solar panels to meet all their power needs. The 最新杏吧原创-Kansas City Carpenters Regional Council loaned his NetZero $500,000 in January to begin building the homes. McKee said that it was 鈥渙nly the beginning for the area鈥� and that he had sold the land for less than the industry standard.

McKee is 鈥渁 really hard-nosed negotiator,鈥� Arant said, but he contends that if 鈥測ou went anywhere else and paid what I paid for a lot, you would be getting a steal.鈥� Arant said he had options for 250 more lots to build out housing in the area around the NGA.

鈥淎 little more for the land doesn鈥檛 matter if that鈥檚 what it takes to get a community started,鈥� Arant said. 鈥淭here are no comps (comparable sales). It鈥檚 like the Wild West.鈥�

But others have said they couldn鈥檛 reach deals with McKee.聽, a nonprofit that promotes urban gardening, tried to buy two sites from NorthSide for a new headquarters, its executive director said, but couldn鈥檛 reach an agreement. The Missouri Department of Transportation had to initiate eminent domain action against NorthSide in 2010 to obtain right of way near the foot of the new Stan Musial Veterans Memorial Bridge.

Old North residents, who have worked to stabilize a NorthSide neighborhood with scattered rehabs and block-by-block projects, have long complained that McKee won鈥檛 sell land he owns in their neighborhood despite the fact that it was never included in the NorthSide Regeneration redevelopment area approved by the city.

鈥淭here鈥檚 been people who鈥檝e been interested in different property and he won鈥檛 relinquish it,鈥� Old North resident Paulette Sankofa said. 鈥淥nce people find out McKee owns it, they just say 鈥楩orget it.鈥欌��

Old North Saint Louis Restoration Group President Jessica Payne said the neighborhood was talking to McKee about putting together a land swap to gain control of some of the buildings he owned in Old North. They even had the city鈥檚 land bank, the Land Reutilization Authority, on board to help come up with properties to give McKee in exchange. She鈥檚 not sure why, but NorthSide representatives stopped communicating suddenly. McKee accused the LRA of torpedoing the agreement.

鈥淭hey were lived in when he bought them,鈥� Payne said of the now vacant, deteriorating houses. 鈥淲e鈥檇 love to see them preserved as he promised he鈥檇 do in the beginning.鈥�

, a nonprofit that works with the homeless north of downtown, has managed to reach a deal with McKee over the years. He owned one of the parcels on the site where Sunshine built its new men鈥檚 shelter.

鈥淚t was more than I paid for all the other parcels,鈥� said Carol Clarkson, Sunshine Ministries director. 鈥淏ut I needed it.鈥�

Years ago, she was looking at another property he owned on North Florissant Avenue. The price he asked seemed well above market, and she didn鈥檛 go through with the deal.

鈥淚 know it鈥檚 inflated,鈥� she said McKee told her. 鈥淏ut I want to make sure I keep my comps up.鈥�

Now, he owns property all around Sunshine Ministries. It鈥檚 making it difficult for the nonprofit to sell a building it no longer needs. Next door to it, a McKee-owned property that has become a refuge for the homeless caught fire last month.

鈥淓verything around me is owned by McKee,鈥� Clarkson said. 鈥淚鈥檓 this little island. ... He does nothing to secure his property to keep my property safe.鈥�

McKee said that nonprofits often had limited resources for real estate transactions and that his land was available for purchase at 鈥渇air market value.鈥�

鈥淚 would be ill-advised to chill interest in north 最新杏吧原创 by demanding inflated prices, and Bank of Washington would not tolerate such a reckless approach,鈥� he said.

最新杏吧原创 Place Community Association President Brian Krueger is still bullish on the area, even with McKee and City Hall at loggerheads. His land鈥檚 value has already jumped, he said.

鈥淚鈥檓 not counting Paul McKee out,鈥� he said. 鈥淒on鈥檛 ever count him out.鈥�

Buyers who can鈥檛 reach a deal with McKee ought to go straight to Eckelkamp, Bank of Washington chief executive, he said.

鈥淚f a developer was serious about wanting a chunk of that land, go to the Bank of Washington, cut Paul out, let them know you鈥檙e a player,鈥� Krueger said. 鈥淚 can鈥檛 think they鈥檙e in the business of saying no.鈥�

鈥楽till talking about him鈥�

Maybe, if McKee had started buying property 10 years earlier 鈥� long before the 2008 financial crisis helped tank the economy 鈥� his dream of turning around an old, struggling section of the city could have become a reality, said Allen, the architectural historian who has followed the saga.

鈥淚t鈥檚 a beautiful dream,鈥� Allen said. 鈥淚t鈥檚 hard not to want that.鈥�

But he doesn鈥檛 think McKee is going to let go.

鈥淭ime has always served McKee pretty well,鈥� Allen said. 鈥淗e still owns the land. We鈥檙e still talking about him. He hasn鈥檛 given up.鈥�

The city says that it鈥檚 open to reaching a resolution on the lawsuits and that it would still work with NorthSide if the developer presented workable projects.

In the meantime, officials are focusing on what they can control: infrastructure improvements along Jefferson and Cass avenues to prepare for the expected influx of 3,000-plus NGA workers.

And that is still more than five years away.

Janelle O鈥橠ea and Andrew Nguyen of the Post-Dispatch contributed to this report.