By Adam Allington, KWMU
St. Louis, MO – Developer Paul McKee says his controversial northside development project is fiscally solvent, despite the failure of one of his lenders.
Cornbelt Bank and Trust, based in Pittsfield, Illinois was seized by the FDIC in February. McKee's companies had taken out mortgages through Cornbelt totaling nearly $15 million.
Keith Marquard is a CPA and board member of the Northside Community Benefits Alliance, which has been critical of McKee's project.
He says if those loans were in good standing the FDIC would have already sold them to a new lender.
"They don't hold loans, they get rid of everything whenever they take over a bank," says Marquard. "So, saying that there's nothing wrong with this... I don't know why they're not already under somebody else's name?"
In a statement Paul McKee said his operation is solvent and he is working with the FDIC to resolve his outstanding debt with Cornbelt, and the fact that those loans have not been resold does not indicate anything negative about his fiscal solvency.
"It is our understanding that it is likely that the FDIC will find another lender to take its place on the loans, made in connection with the northside regeneration project," says McKee. "There is basically no change and our project is not in jeopardy."
McKee says the interest payments on those loans are rolled into the loans themselves, so his companies are not required to make monthly payments.
The $14.8 million is only a drop in the bucket for the total price tag of the northisde development, which could go as high as $8 billion