City officials balked at an offer to pay $116 million to acquire Northside Regeneration properties in north St. Louis from the lender behind the project, according to a letter obtained by St. Louis Public Radio.
The letter was obtained a day after St. Louis officials announced they plan to use eminent domain on properties near the National Geospatial-Intelligence Agency, the majority of which are owned by Paul McKee’s Northside Regeneration, in an effort to spur new development in the area.
The city’s Land Clearance for Redevelopment Authority plans to file a condemnation petition with the courts to acquire 89 blighted parcels in the Jeff-Vander-Lou neighborhood after years of negotiations with Northside Regeneration and the Bank of Washington.
The letter, penned on Thursday, from interim St. Louis Development Corporation President Otis Williams to the Bank of Washington CEO L.B. Eckelkamp Jr., lays out a large divide between what the city was willing to pay for the properties and the Bank of Washington’s valuation.
On Thursday, Williams pointed to that divide as the reason for the city’s turn to eminent domain and said the city is willing to return to the negotiation table if the parcels are priced at fair market value.
“Your suggestions that the city should pay over $116 million to acquire NSR’s properties is so extreme that no amount of negotiation would be realistic,” Williams wrote to Eckelkamp. “We owe it to the long-suffering residents of North St. Louis to begin redevelopment efforts to abate the continuing decay that has been exacerbated by NSR’s failures.”
Williams writes he wants to “correct several material misstatements and omissions” from a previous letter for “the public record and for any meaningful path forward.”
The Bank of Washington did not immediately respond to a request for comment. Additionally, SLDC spokesperson Deion Broxton said Williams had no comment beyond what is in the letter.
The city’s move to turn to eminent domain comes after years of promises of redevelopment and investment in the neighborhoods surrounding the new $1.75 billion NGA campus, which officially opened in September.
McKee’s Northside Regeneration received exclusive redevelopment rights for roughly 1,500 acres of property in north St. Louis. The project aimed to bring new housing, offices and green space to the struggling area of the city.
On top of that, the city committed $360 million in TIF funds to help with the redevelopment of the area and awarded the project $43 million in tax credits.
The letter is one of many exchanged between SLDC and the Bank of Washington. In the Jan. 15 letter, Williams lays out the gulf between what the city is willing to pay for the parcels and what the bank is offering.
Williams points to the valuation of some Northside Regeneration-owned parcels in north St. Louis exceeding the values of properties in Clayton and Frontenac, a wealthy St. Louis County suburb.
“The fact remains that the real obstacle to development has always been NSR’s refusal to sell the properties at fair market value,” he writes. “NSR has demanded prices that exceed credible appraisals.”
Williams writes that the city repeatedly invited Northside Regeneration and the bank to substantiate their pricing with comparable sales, but states that none has been produced.
He writes that a previous letter referred to the city’s unwillingness to accept the bank and NSR’s valuation of the land as “flimsy.”
In the letter Thursday, he states the city has no plans to reinstate the Redevelopment Agreement, restore incentives, or stop its condemnation efforts on the parcels in north city. He writes that if NSR can find legitimate developers willing to purchase the properties at “defensible market values” and undertake “actual redevelopment,” it should do so, but notes that the city will continue its efforts to use eminent domain in the meantime.
“The City will continue pursuing acquisition at fair market value consistent with Missouri law and in furtherance of the long-overdue revitalization of North St. Louis,” Williams writes.
