This article first appeared in the St. Louis Beacon, Feb. 15, 2011 - Opponents of Paul McKee's plans for north St. Louis who persuaded a judge to block the project last year now are trying to prevent him from getting millions of dollars in state tax credits.
At issue is whether state law allows the credits to be issued to McKee's Northside Regeneration project now that Circuit Judge Robert Dierker has said that the city did not follow the law when it approved his project and the tax-increment financing that went along with it.
At a hearing Tuesday morning before Circuit Judge Joan Moriarty, attorney Eric Vickers, who was among those who successfully argued against McKee's project last summer, said that Missouri law requires a valid development plan to be in place before the state can issue tax credits. It has done so twice so far to McKee -- $19.8 million in 2009 and another $8 million in December 2010, as part of the Distressed Areas Land Assemblage Tax Credit program passed specifically with McKee in mind.
Because Dierker's ruling -- which is now being appealed -- voided the city's approval of his development plan and the accompanying TIF, Vickers said "the state had no authority, no power to issue that $8 million in December."
Paul Puricelli, representing McKee, said that the appeal of Dierker's ruling in effect puts his order on hold, so the issuance of the tax credits does follow state law. Besides, he argued, because of the way that the tax-credit program is structured, "there's no damage that arises out of the issuance of tax credits. Nothing."
Moriarty did not rule on Vickers' request for a temporary restraining order, asking both sides to submit further arguments in the case.
After the hearing, Puricelli noted that the way the tax-credit process works, even if McKee sells the credits he has been issued, "the only thing he can do is take the money and put it into the project. It can't go anywhere else. It's not like Mr. McKee can take that money and go buy property in St. Louis County."
But Vickers insisted that because the basic requirement for issuance of tax credits -- an approved project -- had been struck down by the court, the credits should not have been issued. "This should be a slam dunk," he said.
Since Dierker handed down his ruling last summer, McKee's proposed multibillion-dollar redevelopment has been marking time. What was supposed to be the first site where progress would be evident, rehabbing the old Clemens House at 1849 Cass Avenue into apartments for low-income seniors failed to meet a deadline at the end of 2010 and had to surrender $2 million in tax credits previously issued by the Missouri Housing Development Commission. He is now seeking new financing.
That renovation was a small feature in McKee's $8.1 billion, 1,500-acre Northside plan that was projected to include everything from housing to schools to jobs to repairs to upgrades for badly deteriorated infrastructure.
In an effort to regain momentum, McKee worked with members of the Board of Aldermen to win passage last week of a much smaller-scale project: construction of a commercial recycling center and renovation of some properties within the footprint of the original project.
In a statement after aldermanic approval, McKee said that with passage of the plan, he hopes to be able to provide the court with what it needs to win the OK for the full project.
Puricelli, his lawyer, said after Tuesday's court hearing that the latest legislative victory was "an effort to get us back to square one, to deal with the problems that Judge Dierker raised. They just wanted to get the whole thing restarted and lay the groundwork."