Yesterday the Missouri Supreme Court considered an appeal filed by Northside Redevelopment and the City of St. Louis concerning their $390 million TIF agreement that a lower court shot down in 2010. The Missouri Court of Appeals passed the matter to the state’s highest court, agreeing with the trial court without ruling on the appeal.
This is an important matter. It concerns the potentially transformational redevelopment – or continued decline – of 1,500 acres on the city’s North Side and near North Side. That is a large chunk of our city, bordering on downtown, which has received so much public and private investment. It also is a large amount of public subsidy, nearly $300 million, though being a TIF agreement the subsidy is tied to the city benefitting from new taxes as a result of the development.
It also is a controversial matter, because Northside Redevelopment is the vision of Paul McKee Jr., the activist developer best known for the Winghaven development in exurban O’Fallon, the least likely resume credit for someone who proposes to turn around a large swath of North City. McKee bought land in the city anonymously for years through front companies, a common but controversial practice in assembling land for redevelopment from small plots. McKee’s land-banking was detected by independent researcher Michael Allen Jr. before Northside was ready to publicly seek a redevelopment agreement, and the Post-Dispatch ran a dramatic front-page report based on Allen’s research. This made McKee look guilty of some sinister plot and put him on the defensive, where he has remained.
McKee’s situation was worsened by his initial failure to maintain the blighted structures standing on the plots he had purchased, and his status as an outsider who did a poor job initially in building consensus for his project in the area he seeks to redevelop. To this day, McKee has failed to attract minority financial investment in his ambitious project – he claims, because no one has been willing to join him in risking their own money in an area where prosperous redevelopment is so difficult to imagine. Clearly, if this large-scale project does go forward, it must be much more inclusive at every level. McKee needs to go beyond verbal assurances to make sure the objective of including African Americans in the redevelopment of North City is met.
The public perception remains that McKee has taken on a project too large and difficult to accomplish. We believe, as counsel for the city argued in court yesterday, that disbelief in the validity of Northside guided Judge Robert Dierker in his highly creative ruling against it in 2010. Gerard Carmody argued that Dierker, like many others, may be skeptical of whether or not the large-scale project would succeed. “The fact of the matter is, his skepticism has no place in the analysis of whether or not the statutory requirements necessary to go forward with this have been met,” Carmody said in court. We agree.
We also agree that the relative flexibility of the TIF Act makes sense in this case, given the scale of McKee’s undertaking and the amount of infrastructural improvement needed before corporate tenants – like MasterCard, which McKee enticed to a former cornfield in O’Fallon, Mo. – would consider moving to the near North Side. Dierker’s eccentric ruling – based on an “issue” he wrote that he “detected,” rather than a pleading before his court – appealed to those who oppose McKee and doubt that he can succeed. However, we doubt that the Missouri Supreme Court will find this ruling to be on solid legal ground. We think that McKee and the city have a good chance of winning their appeal. If they do, we encourage those who dislike McKee but care about the future of the city to reconsider the critical value of his proposal to bring development and jobs to an area of the city sorely lacking in both.
