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Instead of moving dirt, McKee project is marking time

This article first appeared in the St. Louis Beacon, July 9, 2010 - By the time the Board of Aldermen began its summer recess Friday, progress on Paul McKee's $8.1 billion project to revive a large swath of north St. Louis was supposed to be well under way.

Instead, because of Circuit Judge Robert H. Dierker Jr.'s ruling last Friday, the future of the new infrastructure, homes, jobs, parks and other features of his vision is in doubt.

The developer's lawyers plan to ask the judge to take another look at the grounds he used to invalidate ordinances that gave redevelopment rights to McKee, along with $198.6 million in tax-increment financing for the first two phases of the project.

Failing that, they plan to take the issue to appeals court.

To McKee, whose outspoken nature has not been dimmed by the unexpected legal setback, the court wrangling is far from the way he prefers to do business.

"Lawyers never brought jobs to the North Side," McKee said in an interview, voicing his frustrations at the obstacles that Dierker threw in the way of the project.

"Hopefully, once he gets new information, he'll have a chance to rule (in our favor). Obviously we're not going away. You can't believe the outpouring of e-mails and phone calls we're getting, people saying, 'Don't give up.' "

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Dierker's often colorful 51-page ruling came down to the fact that in granting the redevelopment rights and the TIF, the aldermen did not meet the requirements of state law. The problem, he said, came primarily because while the law requires specific projects to be identified, the plans in the McKee proposal were more vague -- a "fatal flaw" in the process, the judge said.

When he files his post-trial motions and makes new arguments, McKee lawyer Paul Puricelli hopes to craft a persuasive case that the flaw's effect is only temporary -- and in fact it is not a flaw at all.

"We believe the statute is written more broadly than Judge Dierker believes," Puricelli said, "and we hope to present some additional evidence to him."

"I think many TIF projects are done this way. It depends on the project. If you are talking about rehabbing a single building, you may have more specific things in there. But when you're talking about something of this scope and this breadth, it is not unusual to have a little more general language."

One of the aldermen whose ward would be most affected by McKee's plans sees the issue the same way.

Marlene Davis, of the 19th Ward, said Friday, "I didn't really see anything different" in the ordinances for the North Side plan than she had seen in previous TIF projects.

She said she had not yet read Dierker's ruling, and she did not plan to comment as the case goes forward in court.

"I don't get into legal stuff because it's not my job," Davis said. "I'll leave that up to the people who sued and the people who did the suing."

Alderwoman April Ford-Griffin, whose 5th Ward includes the bulk of the land in the McKee plan, also said she had not yet read the court decision but planned to do so over the weekend and would comment next week.

While McKee and his side plan their next moves, those who have opposed his plans from the start revel in Dierker's ruling and want the project to take a different direction, if not stop altogether.

Ever since McKee made his plans public last year, a group called the Northside Community Benefits Alliance has been pushing to have him agree to conditions that they say would help protect their interests.

They renewed that call this week, asking that a nonprofit, community-oriented organization, one not based in St. Louis, be given a role in the process. Such a plan would help ensure that whatever proposal finally wins approval would include appropriate architectural standards, jobs for local residents, park space, environmentally sound construction practices and access to mass transit, the alliance said in a statement.

It said a community benefits agreement, or CBA, would "safeguard the needs and wants of all involved," no matter how the plan may evolve.

Keith Marquard, a member of the alliance, said in an interview that he was surprised by Dierker's ruling, even though he thinks it was right. "You don't always get what you want out of the justice system," Marquard said in an interview.

He said the outside monitor is needed because the public officials who have controlled the process so far "seem to be beholden to special interests and aren't interested in the welfare of the whole city or the whole region."

Marquard, who is a certified public accountant, is particularly skeptical of McKee's ability to attract the financing needed to pay for the project -- a skepticism that Dierker voiced in his ruling as well.

"If he wanted to come to the table and make some concessions as far as things like no eminent domain and maybe work with an outside nonprofit that has experience with CBAs, then I think we would be less opposed to him," Marquard said.

"But as somebody who has financial knowledge, I really don't like him as a developer at all. If he turns out to be financially sound and capable, that's great. If he doesn't, which I think is a more likely possibility, why even bother to negotiate with him at all?"

McKee acknowledged that his ability to line up additional bank financing has stalled, in part because of the uncertainty surrounding the tax break approved by the aldermen but thrown out by the judge.

"I don't have anything to take to them," he said of the banks. "Until there is a resolution of the TIF, I won't have any banks available for infrastructure, which is a crying shame."

One of the highest priority projects in the footprint of the project, though it's separate from the first two phases, is the renovation of Clemens House, a historic structure at 1849 Cass Avenue that has been allowed to fall into serious disrepair.

Mayor Francis Slay signed the bills giving McKee the development rights and the TIF at a ceremony at Clemens House last November, highlighting the central role of the $13 million renovation.

But plans to turn the long-neglected landmark into 49 apartments for senior citizens, along with a community space that could be used by institutions like the Missouri History Museum and the Missouri Botanical Garden, also are on hold, said developer Robert Wood, who was chosen to be McKee's partner on the project.

He noted that tax credits in Missouri have been put on hold as part of the state's budget woes, and money from the Missouri Housing Development Commission also is in limbo, mostly because of politics.

Wood said he does not believe Dierker's ruling affects the Clemens House project, because the TIF money at issue in the court case was for other parts of McKee's proposal -- land at the western edge of the Gateway Mall and around the site where the new Mississippi River bridge will land in Missouri north of downtown.

John Fougere, a spokesman for the Missouri Department of Economic Development, said the department is analyzing the effect that Dierker's ruling may have on land assemblage tax credit already granted to McKee. Because the issue may end up in court, he said he could not comment further.

Dale Singer began his career in professional journalism in 1969 by talking his way into a summer vacation replacement job at the now-defunct United Press International bureau in St. Louis; he later joined UPI full-time in 1972. Eight years later, he moved to the Post-Dispatch, where for the next 28-plus years he was a business reporter and editor, a Metro reporter specializing in education, assistant editor of the Editorial Page for 10 years and finally news editor of the newspaper's website. In September of 2008, he joined the staff of the Beacon, where he reported primarily on education. In addition to practicing journalism, Dale has been an adjunct professor at University College at Washington U. He and his wife live in west St. Louis County with their spoiled Bichon, Teddy. They have two adult daughters, who have followed them into the word business as a communications manager and a website editor, and three grandchildren. Dale reported for St. Louis Public Radio from 2013 to 2016.

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