St. Louis to Hand Paul McKee, NorthSide, 162 Acres of the City, Sell 34-Acre Pruitt-Igoe Site for $1M

Mark Twain once wrote, “The first time I ever saw St. Louis, I could have bought it for six million dollars, and it was the mistake of my life that I did not do it.” Paul McKee appears set to not make the same mistake. First, he purchased hundreds of parcels of land across a wide swath of north St. Louis City, at first with no one noticing. There was, N & G Ventures LC, Noble Development Company LLC, VHS Partners LLC, PATH Enterprise Company LLC, Allston Alliance LC, Sheridan Place LC, Dodier Investors LLC, MLK 3000 LLC, Larmer LC, Union Martin LLC and of course Blairmont. That’s the name that stuck when Michael Allen of the Preservation Research Office first pegged the purchases to McKee. Once the process became public, the purchases slowed, but continued. At Sheriff’s sales and through private transactions, his holdings grew strategically. In the meantime, allegations regarding brick theft and fires, usually stopping just short of implying complicity on McKee’s part, appeared.

All along, those hoping for a better city and reinvestment in North St. Louis put their faith, if not their enthusiasm, in what would become the NorthSide Regeneration project. By 2011, McKee owned nearly 1,000 parcels. Recently, with the city’s blessing, McKee acquired the 17-acre Bottle District site just north of the Edward Jones Dome. As far back as 2009, it was anticipated that the more than 1,200 city-owned parcels in the redevelopment area were likely to become part of this redevelopment effort as well. It appears that this is now set to happen. The Post-Dispatch’s Tim Logan reports that the city’s “top development officials” and Mayor Slay are supporting the move. Included in the sale would be the 34-acre Pruitt-Igoe housing project site. The price? $100,000 for a two-year option and a final total price of $1M to purchase. The approval process begins Monday. Effectively, no one other than McKee has the opportunity to purchase the land in question. NorthSide spans the JeffVanderLou, St. Louis Place and Carr Square neighborhoods.

There have been plenty of concerns expressed by the public along the way and a couple court cases, but no effective, coordinated opposition. In fact, opposition has been so disjointed that when 5th Ward Alderman April Ford-Griffin stepped down in October 2011 to take a position as director of the city’s Civil Rights Enforcement Agency, no consensus candidate emerged that would offer opposition to McKee’s NorthSide. The city’s 5th Ward encompasses a majority of NorthSide, including Pruitt-Igoe, the landing of the new Mississippi River Bridge and St. Louis Place. Tammika Hubbard, an insider’s insider, won the special election. Hubbard’s mother Penny is a state rep, and her brother Rodney Jr. is a former state representative. Her father, Rodney, is chairman of the ward’s Democratic Central Committee, but also serves as executive director of the Carr Square Tenant Corporation, which runs the Carr Square housing development and owns a 2.5 percent stake of NorthSide Regeneration LLC. Tax credits received by NorthSide have been transferred to the Carr Square Tenant Corporation. They also own the crumbling Carr School, which McKee has stated he would like to develop.

This alone doesn’t illustrate anything necessarily nefarious, but fully highlights how city politics have been aligned to facilitate McKee’s vision at every turn. The only roadblock has been a court case, still pending, challenging the City’s ability to award Tax Increment Financing to a project area, and not a specific, targeted, shovel-ready project. It’s a smart bet that no matter the outcome, the City will find ways to financially support NorthSide. If people believed that the city had gone all-in with McKee to this point, his holdings will soon more than double, totaling more than 2,000 individual parcels and nearly half of the designated 1,500 acre development area. He told the Post-Dispatch that the combined holdings will allow him to present a wide range of options to potential businesses and developers.

{left: thumbnail from P-D map of McKee property, right: satellite view of same map area}

And yet exactly zero development plans have been made public. The Pruitt-Igoe site is not a straight sale, but a two-year option at $100,000. A final purchase price would be $1M. Who wouldn’t want the exclusive option to market 34 acres in the city, align state, federal and city tax credits with nearly zero risk? Once again, the city is choosing to place an incredible amount of faith in Paul McKee. For its part, St. Louis makes the argument that it also risks nothing as the land is currently a liability. Of course, privately owned land without a development plan presents its own liability to the city, and residents. In the wake of the news, Mayor Slay Tweeted “Selling 1,200 tax delinquent parcels for a large development actually proves the strategy of land banking.” The pending sale, however, does not prove that the process of land banking has been fair or worthwhile and until development occurs on a large portion of the land, the strategy will only have proven that after three decades, the city has found someone else to mow the yard.

The sale would reduce the number of city-owned parcels by more than 10% and represent the largest single sale of city land in history. The sale is being sold as a victory by City Hall, whether or not development occurs. The city would receive $3.2M for the land and the Post-Dispact article states that according to Rodney Crim, executive director of the St. Louis Development Corp., the city would receive at least $100,000 in new tax revenue even without development. “Whenever possible, we want land in the hands of the private sector,” Mayor Slay’s Chief of Staff, Jeff Rainford told the Post-Dispatch. “As long as the city’s holding the ground, nothing’s going to happen on it. Our bias is trying to get this land out the door.” By any measure, market demand for the parcels acquired by McKee has been nearly non-existent.

Together, McKee and the City of St. Louis have already accomplished something that while maybe not admirable, is impressive. Assembling standard lots of 25 ft. x 130 ft. is a widely recognized challenge in historic cities. St. Louis has now done this better than any other American city. It’s not hyberbole to state that NorthSide is the most signifcant story of land banking, and hoped for urban renewal in America, by far. Of course, St. Louis has never been afraid of the Big Idea. The city does continue to shy away from public process. Where else can a city aid a developer in purchasing more than 800 parcels and then cut a deal to sell another 1,200 without public deliberation? Aldermanic support sometimes serves as a stand-in here, with clear shortcomings. The story of this incomparable development has not been well told to this point. It should receive attention now.

For the record, Rainford stated, “We’re not giving him these properties. We’re not selling them at a discount. He is buying them for what we think these properties are worth.” And yet, $3.2M for 162 acres of land within sight of downtown St. Louis is a fire sale. As Logan notes, the city established a land bank in 1971, decades before Detroit and Cleveland would make it fashionable on the pages of the New York Times. The land bank is what has made the accumulation of land, and this sale, possible. Whether such a concentrated land banking effort ultimately proves productive remains an open question, and if so, how do we measure the opportunity cost of more than 40 years of (at the very least) benign neglect and disinvestment?

The city has owned the Pruitt-Igoe site, and other parcels, for decades. McKee has cited the down economy for slow development and has been up front that due to the size of the project, it will take decades to complete. In a city that loves land clearance and immense civic projects, NorthSide far outstrips past efforts (the Gateway Mall, civic buildings, the Gateway Arch, Mill Creek Valley, Pruitt-Igoe, etc.) in size, scope and cost. Whether successful or not, the story of NorthSide will write a new chapter in urban history. It’s possible that NorthSide is the best development opportunity offered in more than half a century for an area clearly decimated before McKee ever took an interest. Clearly the City of St. Louis thinks so. The rest of us will have to wait for decades to see if it’s right.

{nextSTL recently posted the above NorthSide “retail opportunities” marketing map}

LRA - St. Louis
{map by Show-Me Institute showing offers to purchase city-owned LRA property}

LRA - St. Louis
{map by Show-Me Institute showing offers rejected by the LRA, several dozen are within NorthSide}

*this story was updated 2/13 to reflect new information regarding the Pruitt-Igoe site option and sale price