Developer Paul McKee Jr. and Alderwoman Tammika Hubbard

Developer Paul McKee Jr.’s hospital project in North St. Louis caused yet another stir at the Board of Estimate & Apportionment meeting on Wednesday, February 19.

The developer — who is currently embroiled in litigation with the City of St. Louis for defaulting on his NorthSide Regeneration development agreement — asked the Board of E&A for an extension on its deadline to NorthSide has sufficient financial backing for the hospital.

The original deadline for the project was on December 31, and McKee’s team asked for the deadline to be pushed back to August 20.

St. Louis Comptroller Darlene Green was the only member of E&A who opposed the amendment to the agreement, arguing that it was a substantial change that should go back to the Board of Aldermen.

“Comptroller Green is concerned that they have not even been able to answer how they will finance construction,” according to a statement to The American. “Moreover, Wednesday’s amendment at E&A did not include any remedies for nonperformance by the developer.”

McKee proposes to build the $20.5 million project at the site of the former Pruitt-Igoe housing project, and it’s set to receive $8 million in public funding from the city.

He proposes to call the three-bedroom hospital and freestanding emergency department the “Homer G. Phillips Hospital,” which doctor and nurse alumni of the historic African-American hospital have adamantly opposed.

At the meeting, city officials argued that the amendment was better for the city because it means the project financing has to close on August 20. President of the Board of Aldermen Lewis Reed said that he wanted to approve the change because North City needs a medical facility, and he does not want to delay the project.

However, project leaders have not been able to confirm that the facility will be able to accept Medicaid or Medicare — despite the hospital being located in the middle of one of the most impoverished and medically underserved areas in the region.

Freestanding emergency departments — which is what project leaders have called the proposed facility — are not recognized by the federal government and cannot accept Medicaid and Medicare. In fact, studies have found that freestanding emergency rooms end up costing patients more than standard emergency room fees.

At the meeting, Reed and Mayor Lyda Krewson, the other two members of E&A, voted to approve the extension, while Green abstained. Afterwards, The St. Louis American asked Otis Williams, executive director of the St. Louis Development Corporation, about the issue with Medicaid and Medicare. Williams said he was unaware of it.

“We will take a look and see whether or not they would be able to deliver the services that they promised,” Williams said. “If they aren’t, then we would obviously bring it back. But at this point they still have an uphill battle to get financing.”

Krewson was not as alarmed as Williams.

“I think it would certainly be better if they accept Medicaid or Medicare,” Krewson said. “I think that that is not one of the provisions that’s in the board bill.”

Alderwoman Cara Spencer, who is also a mayoral candidate, said Krewson’s answer was unacceptable as the leader of this city.

“As mayor, I would not even entertain the situation. Period,” Spencer said. “We would put an end to it. We cannot be subsidizing medical facilities who do not care for the most vulnerable people in our city.”

Spencer also thought it was “ridiculous” that the Board of E&A would not send the agreement back for the Board of Aldermen’s approval.

“This is a significant change to the agreement,” she said. “And we are in open litigation with the developer.”

McKee’s proposed hospital will be located within his NorthSide Regeneration development footprint, which was originally awarded a $390 million TIF in 2009.

In June 2018, city officials attempted to end the development agreement for the NorthSide Regeneration project. The default notice that the city issued to McKee stated, “After a decade, the promised redevelopment has not come, nor is there any indication that it will.”

In Spencer’s ward in South St. Louis, St. Alexius Hospital recently filed for bankruptcy. This is the second time in two years that St. Alexius has been under the ownership of a company in bankruptcy proceedings.

“The stress that the dysfunction has placed on this community cannot be calculated,” Spencer said. “When we are building and subsidizing a hospital, we should be absolutely certain we wouldn’t be dealing with someone who has a questionable track record and combative relations.”

St. Alexius’ nursing program is among the more accessible programs for people of “modest means,” she said.

“Getting a nursing degree can be inaccessible to people and especially in an area that desperately needs access to health care,” Spencer said.

However, with the hospital ownership in flux, this has highly impacted the nursing program and opportunities as well.

“Considering that Paul McKee has had his own issues of default,” she said, “putting that financial record at the helm of a hospital can have a disastrous impact for the people who need it.”

Joe Dulle, attorney for NorthSide, told the Board of E&A members that not passing the amendment would greatly hurt the project’s progress. 

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