McKee, NorthSide Win Unanimous $390M TIF Ruling

NewNorth

NorthSide business centers

The SouthSide Regeneration plan may have been an April Fool’s Day prank, but today Paul McKee is again thinking big. His NorthSide $390M Tax Increment Financing package has won a unanimous decision at the Missouri Supreme Court. Passed by the city’s Board of Aldermen in 2009, the TIF, meant to jumpstart the rebuilding of a large swath of north city, has been stalled by a lawsuit ever since. The decision states that judge Dierker erred in his ruling that invalidated the TIF on grounds that it lacked specificity, essentially saying that Dierker ruled on an argument of his own making and not one made by the plaintiffs.

With the win, and the secured financial backing of the city, McKee has everything in place to move forward. What happens next is anyone’s guess. The lawsuit had challenged the ambiguity of the plan and the decision means that McKee does not need to provide more specific project detail to access the TIF. Having been criticized for years for allowing vacant building to burn or fall down, McKee has repeatedly pled for more time and money. The ambitious project is on a scale not seen in the city’s urban core since the building on Pruitt-Igoe in the 1950s.

Urban planning firm Civitas has been engaged with Paul McKee and NorthSide for several years. nextSTL reached Civitas founder Mark Johnson for comment and he confirmed involvement has continued while the project has been on hold. “We worked very intensively on (NorthSide) before the court case came up and then we’ve been continuing to meet with Paul and offer advice from time to time over the last few years,” Johnson told nextSTL. “I would expect that now things will start going again.”

Johnson has been called a “rock star” of landscape architecture and is highly respected for his work redeveloping challenging urban environments. Although important differences exist, the Civitas project most like NorthSide is the redevelopment of Stapleton, the site of a closed 4,500 acre airport. More detail on the early work by Civitas on NorthSide can be seen in the Topos story below.

New North google earth2
{boundaries of NorthSide Redevelopment TIF shown in blue}

Johnson now expects that his work on NorthSide will accelerate, though when reached, he had yet to speak with McKee regarding specific next steps. “This project, and I’ve lead many, many of the meetings and met so many people on the north side, this project is challenging. Anything of this scale is challenging, especially in a neighborhood that has face so many challenges as this one has,” Johnson state.”I really believe that Paul’s vision is rooted in what’s best for the community and is entirely sincere and that it’s taken the kind of boldness that he’s offered and the kind of risk that he’s taken to finally help this neighborhood heal – hopefully with the involvement, the participation and success for every single person in that neighborhood today as well as new people and new jobs that we hope we’ll be able to bring.”

Encompassing approximately 1,500 acres of the city, NorthSide is comprised of more than 2,200 parcels. Half of those were sold to McKee by the city last year, including a $100,000 option on the 34-acre Pruitt-Igoe site. A final sale price on the Pruitt-Igoe site, by far the largest parcel in the development area would be $1M. With the TIF now in hand, McKee can sell bonds to help finance infrastructure projects that he says will result of businesses relocating and commercial development.


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

McKee’s NorthSide development strategy has always focused on aggregating small urban parcels, focusing on potential business and commercial nodes near Interstates and major city arterial streets, then luring businesses. The most marketable of these sites would appear to be surrounding the 21st Street interchange with I-64 and the landing of the new Mississippi River Bridge at I-70 and Tucker Avenue. Recently, the long stalled Bottle District was added to NorthSide. The thought is that if jobs and commercial development arrive, demand for residential units will materialize.

Ahead of the ruling, indications were that McKee was investing in a rebranding of the NorthSide effort. A website recently surfaced linked to McEagle Development: newnorthstl.com. The URL was registered to Red Letter Communications, Inc., a creative design firm in Cape Girardeau, this past November. It’s anticiapted that the “New North” moniker will be used to relaunch McKee’s development.

NewNorth


{the largest site marketed above is just west of the Pruitt-Igoe site (forested area in this image)}


{the $390M TIF legislation was signed by Mayor Francis Slay at the Clemens Mansion where McKee pledged a full renovation of the historic home – it has since deteriorated significantly}

Click here to read more NorthSide coverage from nextSTL

Paul McKee, NorthSide Regeneration LLC – MO Supreme Court Decision

NorthSide Retail Marketing Map

  • Scott Ogilvie

    The ruling is interesting because a lot of people were looking to see how it might affect other large, vague redevelopment projects using TIF’s. Does the initial plan require specificity or not? The ruling really doesn’t say – just that specificity was not properly before the court because it wasn’t part of the plaintiff’s initial filing and was something Dierker partially inserted into his ruling. It was something that was argued at length before the appeals court by the plaintiff, but because the appeals court simply affirmed Dierker’s ruling without writing their own, the Supreme Court took the view that the issue couldn’t be properly adjudicated. So its neither the affirmation of vagueness of the McKee TIF nor a ruling for specificity. It’s basically a one-off. But we’re on to the next phase.

    • Roger Mexico

      Has it yet been decided/negotiated what fraction of the McKee TIF bonds will be guaranteed by the city? Rather than the 390 million figure, this to me seems like a critical question.

  • Kyle Steffen

    The thing that stands out to me is the idea that commercial development is coming first, and residential second? I thought that most retailers want some kind of built-in consumer base before anything. I’m not saying that nobody lives in this area, but the land banking by McKee has significantly lowered the potential for a higher population. This makes me worry about the type of commercial developments he is going for.

    • Alex Ihnen

      I think McKee would offer a more nuanced vision than I expressed, but the theme has always been jobs, jobs, jobs. First lure jobs, new business to the area and then other development will follow. It won’t be all one then the other – commercial and residential development could come together.

  • jhoff1257

    I’m also torn regarding which side to cheer for. As another post said development is always good. I just have a sneaking suspicion that this is going cause the demolition of even more historic building stock and replace it with some siding covered suburban styled crap. I hope it doesn’t but I’m just not sure what to think, especially having spent a lot of time in WingHaven, that is NOT what I want to see here.

    • Roger Mexico

      For many blocks of St. Louis Place (within McKee footprint) you wouldn’t have to knock anything down… maybe 1 or 2 remaining structures per block. House by house redevelopment can conceivably work in Old North STL but not in much of STL Place. So I’d rather see McKee work on his highest priority commercial (22nd street area) and see if he can interest anyone in more residential. Maybe convince Habitat for Humanity to continue their developments (around 100 houses thus far) that are already in McKee footprint. Perhaps another private developer concentrating in the same area.

  • Presbyterian

    If I’m reading it correctly, these are the two key sentences in the court’s decision: “Northside asserts that the trial court erred in ruling that the ordinances lacked a redevelopment project because plaintiffs and intervenors did not properly raise the issue. Northside is correct.”

    It makes for a simple verdict. The trial judge had played the role of plaintiff, making a case for the plaintiffs in his ruling that they had failed properly to make themselves. A judge has no authority to do that.

    Now — after three unfortunate years of deterioration — we can see what McKee can do.

  • Justin Striebel

    I’m still confused on who I should be rooting for in this matter. Obviously the idea of development is a good thing, but I imagine there was a lawsuit for a reason.

    A side question is this: if the bottle district belongs to McKee, does that rule out the possibility of the Rams being given land to build a stadium there?

    • Alex Ihnen

      I’m sure McKee would happily sell the land to Stan.

      • Justin Striebel

        I’m sure he would, but at what price? Part of the reason that idea had legs was that the city doesn’t have tons of money to chip in, but they could have land to give. Not that this is the kiss of death. Stan will either invest a good chunk of his own money, or he won’t. Just wouldn’t follow the blueprint I thought it might.

        • Alex Ihnen

          Which is why that plan seems very implausible to me. If Kroenke wanted to build there, one might imagine he’d put a bug in someone’s ear and not allow the city to sell it McKee. If Kroenke buys it now, McKee will simply be a couple million dollar middle-man. Stranger things have happened and perhaps keeping his cards close to his chest was more important to a few million. Who knows.

  • T-Leb

    The whole story reminds me of the plot of RoboCop 2 :: Omni Consumer Products (OCP)’s current plans also come into focus: they attempt to have Detroit default on its debt, so that OCP can foreclose on the entire city, take over the city government, demolish the old city, and put up a planned community development, Delta City, in its place.