In 1850, Colonel John O’Fallon led a group of investors in creating the St. Louis Place subdivision just north of St. Louis’ central city. The large plat included a public park, land for housing and sites for churches and businesses. The group had just one issue: the land was outside of the city limits, which would be extended west in 1855.
After five years, St. Louis Place was in the city. That was the only public benefit received by the investors, who sold and developed the parcels of the subdivision on their own. By the 1890s, St. Louis Place was a densely built-up, bustling neighborhood. Its development took forty years and lots of private investment, but the result could be seen in every red brick and ornate wooden door. These details confirmed a big vision set by O’Fallon and company.
Flash forward 163, and St. Louis Place is different. There are many vacant lots, and buildings still disappear from the landscape. The future of the neighborhood is enmeshed in the massive Northside Regeneration redevelopment project proposed by developer Paul J. McKee, Jr. McKee owns hundreds of parcels in and around St. Louis Place and has shown renderings suggesting a vision as big as John O’Fallon’s.
Yet the finances seem different. Now McKee says that he needs the state to extend the Distressed Areas Land Assemblage Tax Credit to make the project work. The state General Assembly created that tax credit in 2007 in order to stimulate development of distressed urban neighborhoods. McKee’s attorney wrote the legislation, and only McKee has received funds authorized under the credit, which is capped at $95 million and sunsets in August.
McKee’s company has received over $40 million in state distressed areas land assemblage tax credits since 2008. Yet its only completed development project had a budget of $2.9 million, and some of that came from other sources. The tax credit requires proceeds to be invested in development of the project areas that receive the money. Where did the money go? Looking at the vacant lots and crumbling buildings, few can answer that question.
We know that $40 million can get a lot done in the city. At the same time that the General Assembly created the Distressed Areas Land Assemblage Tax Credit, the Old North St. Louis neighborhood began work on the Crown Square redevelopment project. That project wrapped up last year. The results are stunning: the reopening of long-closed streets (including 14th Street), rehabilitation of 27 vacant and even dilapidated historic buildings, the opening of 78 new apartments and the creation of several retail spaces now occupied by small businesses.
Crown Square cost roughly $37 million to complete, but no special tax credit underwrote the project. Funding came from existing sources including the state historic rehabilitation tax credit, which is open to use by all taxpayers. Yet Crown Square was a high-risk, highly-leveraged project. Its scope might not compare to McKee’s giant vision, but its impact is similar to John O’Fallon’s old project: steady and measurable development seen in the number of people living and working in the buildings.
For all of the money that Missouri taxpayers have invested in Northside Regeneration, we could have built a second Crown Square. Meanwhile, existing incentives have stimulated job-creating development in the same area that Northside Regeneration promises to fix. Perhaps the General Assembly will take heed. St. Louis is better off without a Distressed Areas Land Assemblage Tax Credit. We need programs that turn visions into tax-generating, job-creating, community-building reality – and this one has failed to do that.