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Koster sues to recover tax credits awarded to Cupples 9 project

(photo courtesy of the Landmarks Association of St. Louis)

Attorney General Chris Koster has sued a well-known St. Louis developer and his former business partner in an effort to recover tax credits that Koster says were fraudulently obtained.

In the suit filed today in Cole County, Koster alleges that in 2010 and 2011, the state Department of Economic Development awarded developers Kevin McGowan and Nathaniel Walsh nearly $2.4 million in brownfield credits to clean up lead paint at the Cupples 9 building in downtown St. Louis.

The suit alleges that after the property at 900 Spruce St. was sold via foreclosure in spring 2011, the new owners, - The Komen Group - discovered that lead paint remained. Koster says in a press release that investigations by the Department of Natural Resources and an independent third contractor found unacceptable levels of lead.

Koster says the state cannot simply cancel the tax credits because McGowan and Walsh had already sold them to a third party.

Officials with the Komen Group did not return calls for comment. McGowan said he had not seen a copy of the suit, but called it "impossible" that trusted third parties did not complete the remediation work.

McGowan and Walsh were also the previous owners of Cupples 7. The bank took the deteriorating building back from the developers sometime last month, and the city's development agency on Aug. 28 again sought redevelopment proposals.

Follow Rachel Lippmann on Twitter: @rlippmann

Rachel is the justice correspondent at St. Louis Public Radio.