{801 Howard Street – sold for $2 in 2003, now valued at $2.3M}
Here’s the basic story (via the Post-Dispatch): the Land Reutilization Authority (LRA) sells a vacant, blighted lot adjacent to I-70 in North St. Louis to a storage company for $2. That was 2003, a decade after a new Mississippi River bridge was proposed and two years after a basic agreement on placement of the bridge was unveiled. The plan showed that this parcel would be needed for the Missouri bridge landing. Two years later in 2005 as plans for the bridge were solidifying, the sale was finally completed. Funding for the bridge remained uncertain. In early 2008 financing for the bridge was finalized, the owner of the property then proceeded to build several storage facility buildings and is offered $1.7M for the property. The offer is declined and a “fair value” of $2.3M is arbitrated. MODOT is currently protesting this amount in court.
Is this story indicative of systematic corruption? Political favoritism? Lack of bureaucratic cooperation? Simple neglect? Or maybe just a costly outcome to a difficult situation?
LRA took possession of the property from Bill and Marsha Newman in 2002. I know nothing about the Newman’s other than that they are listed as property owners from at least 1997 to some time in 2002. Again, the transfer of the land to LRA occurred after the placement of the bridge was unveiled. There may be more to this part of the story. If anyone can find additional information about this transfer please let me know.
Before the final sale of the property to Archview Storage, Inc. LRA staff recommended that the deal be canceled due to the clear need for the land. In retrospect, all involved seem to acknowledge this the sale was a poor decision, but maintain that until financing was secure the new bridge was anything but certain. In my opinion this is a reasonable position as large, complex projects can take a decade or more to be realized and sometimes never progress beyond a pretty rendering.
The Post-Dispatch story clearly alludes to deliberate LRA commissioner complicity in selling the property to Archview for what could be anticipated to be a huge payoff. The story details campaign contributions to Mayor Slay and other connections. But this storyline has a couple holes. If everyone knew that this was to be the site of the new bridge as far back as 2001 and maybe before, how did the property fall to the LRA at a tax sale? Why didn’t an investor purchase the land. It appears that the future use wasn’t particularly clear in 2001.
If the project manager for MODOT’s claim that “the decision on where to link the bridge to Interstate 70, through the Howard Street site, was firm by 2001 and never changed,” why didn’t MODOT purchase the land for $2.50 in 2001? Why didn’t they contest the original sales agreement or the final agreement in 2005? Why wait until late 2008 to attempt to purchase the property? Is MODOT limited by law from acquiring property in advance of development?
And Archview isn’t a speculative investor in the pure sense. The owners have land nearby in North St. Louis and have a legitimate business with a legitimate use for the land. That said, it also appears clear that significant improvement continued well after it did become clear that MODOT would need to acquire the land. This can be seen as little other than an attempt to maximize the acquisition cost. Such an act is certainly opportunistic, but not illegal.
This story needs to be better understood. What’s your take on the events of this story?
