The St. Louis TIF Commission voted to release an estimated $190 million in tax increment financing (TIF) for the second half of developer Paul McKee’s northside redevelopment project on Wednesday.
After hearing two hours of critical public comment on the northside redevelopment project last month, six commissioners voted in favor and one abstained.
In 2009, the commission approved the northside’s $391-million TIF but only for the first two areas. Soon after, several residents sued the City of St. Louis and McKee, challenging the northside TIF and redevelopment plan. The $8-billion northside project was tied up in court until April 2013, when the Missouri Supreme Court ruled in McKee’s favor.
The TIF Commissioners asked McKee several questions about how he plans to engage the community in the planning process, which was a major concern expressed at the meeting last month.
McKee said the redevelopment will have a “master association,” which will involve all business owners and residents living in the development area’s approximately 1,500 acres.
“Northside has over 9,800 existing residences and businesses already living and working in the area,” he said “They too must have a voice.”
A TIF is a tool for developing blighted areas, which involves capturing a certain amount of revenue from taxes when property value and sales goes up — rather than actually raising property or sales taxes.
David Newburger, chairman of the TIF Commission, asked McKee to clarify that none of the City of St. Louis’ general revenue is going towards the project.
“I’ve never gotten a dime from the city, nor have I asked for a dime from the city,” McKee said. “A TIF note is established, and we have to spend the money to do infrastructure work. The city will own all of the infrastructure.”
The Northside project is broken up into four areas. The first focuses on 22nd Street as the entry way into the redevelopment from Interstate 64. This area will feature office spaces, retail and restaurants along 22nd Street and the residential condos and more commercial north of Olive Street.
The second area focuses around the new Mississippi River Bridge and I-70 interchange.
The last areas, C and D, are largely the neighborhoods. The third area is the crossroads of North Jefferson and Cass Avenues, the site of the former Pruitt-Igoe housing project. It’s intended to be the heart of the redevelopment area. The fourth area is the intersection of N. Jefferson Avenue, Parnell Street and North Market Street.
After the Supreme Court ruling, McKee told the commissioners that the “lights went back on” in the Northside, and businesses started seeking him out again.
“The idea here is jobs,” he said. “I don’t feel industrial and office people thought it was going to happen.”
He said he now has two major industrial companies – creating about 250 jobs – who want to potentially be part of the third and fourth areas, or areas C and D. As for residential development, the Northside Regeneration held a competition and selected five homebuilders for the project.
“We have been working with that group of five residential developers for about a year and a half now,” he said. “Phase one of the residential is in area C, so we have to prepare the sidewalks and clean the sites up to be able to deliver developed lots to these residential developers. None of that can proceed until you release that TIF.”
McKee reiterated that he does not have the right to eminent domain, and he has been able to purchase 75 percent of what he needs through negotiations.
“We’ve bought over 3,000 parcels, and that’s all been through negotiations with the owners,” he said. “We believe we can get more acreage, but that’s going to happen over time.”
In the past, the City of St. Louis has backed TIF projects that have failed, sticking the city with the bill – including St. Louis Centre and St. Louis Marketplace. Newburger asked who was liable for the TIF if the project doesn’t generate an increment in tax revenue.
“This lady and I,” he said, pointing to wife, Midge.
The next step for the project is getting approval from the Board of Aldermen for an amendment to the TIF bill. It will most likely be heard in the Housing, Urban Development, and Zoning committee next week. If all goes as planned, McKee said the northside should see new streets, sewers, houses and roads with in the next year.