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Majority of properties in McKee project area rated fair or better

This article first appeared in the St. Louis Beacon, Feb. 25, 2010 - A principal in the firm that helped draw up Paul McKee’s $8.1 billion redevelopment plan for north St. Louis says that 75 percent of the buildings in the project area were rated either excellent, fair or good.

Larry Marks of the firm Development Strategies testified for the second day in St. Louis Circuit Court in a lawsuit brought by residents of the affected area. They are trying to block the NorthSide Regeneration project, saying that the city did not act properly in granting McKee $390 million in tax-increment financing or in approving the redevelopment plan.

Before the city could grant the TIF for the project, the entire redevelopment area had to be declared blighted, even though there are pockets of new construction of homes and businesses.

Marks said that buildings in the plan’s 1,500-acre footprint were rated on a five-point scale, from 1 for excellent to 5 for dilapidated. Of those buildings, he said, 37 percent were rated fair and 38 percent were rated either excellent or good. He also said that 45 percent of the redevelopment area is vacant land.

Though the project is broken down into four separate redevelopment areas, and the TIF money has been granted only for the first two phases, A and B, Development Strategies dealt with the area as a whole and did not break its statistics down by phase, Marks said.

Under questioning, Marks acknowledged that the Clemens Mansion at 1849 Cass was one of the properties that was rated as dilapidated. McKee has announced that the long-neglected landmark will be rehabilitated in a project that will turn it into 49 apartments for senior citizens along with a community space that could be used by institutions like the Missouri History Museum and the Missouri Botanical Garden.

Marks said that the McKee plan conforms with an overall city development plan, which Development Strategies also helped put together. Asked about whether displacement costs were taken into account for existing businesses that may have to be demolished, Marks said his firm did not include those possible costs because the current businesses are “the anchor we want to build from.”

Marks also disputed any notion that McKee had asked his firm to conduct its study with an eye toward a finding of blight, which is necessary before the TIF money can be approved. “We go in and see if the criteria are there to meet the requirements of blight,” Marks said.

Judge Robert Dierker, who is hearing the case without a jury, recessed the trial until 11 am. on Wednesday, when Marks will resume his testimony. Alderwoman April Ford-Griffin, whose 5th Ward makes up the bulk of the redevelopment area, is expected to testify next week.

Updated 6:59 p.m. Thurs., 02.25.10 - Two residents in the north St. Louis area where Paul McKee plans an $8.1 billion redevelopment said Thursday that their homes have been adversely affected by the designation of blight that has been given to their neighborhood.

Isaiah Hair Jr. and Cheryl Nelson are two of the plaintiffs who have filed suit to try to stop the McKee plan. They say that the city acted improperly by approving $390 million in tax-increment financing for the plan and did not follow proper procedure in declaring the area blighted. 

Nelson, who lives at 1519 N. 18th Street, testified in St. Louis Circuit Court that her home lost up to 30 percent of its value -- estimated at up to $130,000 -- once the Board of Aldermen adopted the blighting designation that was needed to approve the TIF. Far from being blighted, she said, her neighborhood is close-knit, where neighbors look out for each other.

Hair, who lives at 1601 Hogan Street, acknowledged that homes in the area had taken advantage of tax abatement when they were built, but he said the breaks expired after 10 years and homeowners are now paying their full tax.

He too said the blighting designation had hurt the value of his home and that his area, which has seen a lot of new construction in the last 10-15 years, should never have been part of the redevelopment plan to start with.

Last year, the city granted McKee the TIF and redevelopment rights to the irregularly shaped 1,500-acre site that stretches from the western end of the Gateway Mall, near Union Station, to north of downtown, where a new Mississippi River bridge from Illinois will enter the city.

In testimony Thursday morning, 6th Ward Alderwoman Kacie Starr Triplett said that she considers a designation of blight to be purely a procedural tool to be used for redevelopment, not a means of branding an area as a social or economic liability.

Triplett sparred for much of the morning with lawyers for the plaintiffs over whether the McKee plan conforms to earlier redevelopment plans for the city as a whole, whether the aldermen and the TIF Commission had followed proper procedures and whether the area is truly blighted.

Attorney Eric Vickers noted that the blighting study that the aldermen were presented was commissioned not by the city but by McKee. "Do you think the city should have its own blight study done," he asked, "rather than rely on the developer?"

He also showed Triplett pictures of some newer construction in the redevelopment area and asked her whether she considered those buildings to be blighted.

She noted that in some cases, the area where those homes and businesses were built had already been blighted by earlier redevelopment agreements. She also said that while the blighting designation was necessary for McKee's project to receive tax breaks, "from my perspective as an alderman, the term blight is purely procedural."

Triplett noted that there had been some "incremental investment" in the area but nothing on the scale of what McKee has proposed over the next 25 years.

Vickers noted that $1.1 billion of the cost of the project was going for new streets, sewers and other infrastructure, but only $340 million of the TIF would be dedicated to those parts of the redevelopment. He also pointed out that efforts to attract federal stimulus money to pay part of the infrastructure costs had been unsuccessful.

He wondered where the additional funds would come from, speculating that the city would be left paying the bill. But Triplett replied that "the city is not on the hook for anything. If the project fails, the city has not lost anything except time."

Paul Puricelli, attorney for McKee, pointed out that the TIF money is reimbursement funds, so McKee can only get it after he has spent some of his own money on the development.

Alderman Freeman Bosley Sr. of the 3rd Ward was questioned about an e-mail he wrote in which he described the McKee proposal as a "pipe dream." He said at one point that the whole redevelopment project is "a roll of the dice," but he also welcomed the possibility that it could succeed and improve the North Side area.

"Whenever anyone come in and makes great promises about how something is going to change," Bosley said, "you never know. A pipe dream means maybe, maybe not. Let's take a chance on it.

"As long as they're talking about making a difference, I'm ready to listen."

He also noted that the city has not given McKee any public funds for the project, adding:

"We don't have any money to give him."