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City allegations could spur investigation into St. Louis developer McKee

Paul McKee on March 28, 2018.
File Photo | Kae Petrin | St. Louis Public Radio

A St. Louis alderwoman is pushing for state and federal law enforcement to investigate St. Louis developer Paul McKee, whose 1,500-acre redevelopment project in north St. Louis has received millions in development incentives.

The investigation would pursue allegations that McKee inflated property values to gain more state tax credits when he purchased buildings, Alderwoman Cara Spencer, D-20th Ward, said. Spencer introduced a resolution Friday calling for the investigation.

“I think these allegations are so serious in nature that an internal investigation is not sufficient to look into this adequately,” she said. “So I’m calling upon our state and federal prosecutors to take a good look at what’s going on here.”

The St. Louis Post-Dispatch reported last week that the accusations arose during a trial in St. Louis Circuit Court on May 9.

Jim Osher has spent years fighting the city’s acquisition via eminent domain of the former Buster Brown shoe factory at Jefferson and Cass avenues. In court, he used a 2011 sale of the property to McKee’s Northside Regeneration company for $3.75 million to demonstrate the building’s value.

But city officials from the Land Clearance for Redevelopment Authority argued in the trial that the property was only worth $573,000. The LCRA’s attorney claimed McKee inflated the purchase price of the property to receive additional tax credits from the state.

An attorney representing McKee's Northside Regeneration company denied to the Post-Dispatch that McKee inflated property values.

Alderwoman Spencer said the claims that the developer inflated property values “point to larger issues” in the city’s dealings with McKee.

The city made agreements with McKee between 2012 and 2014 that intended to hold him accountable for his promises to maintain, rehabilitate and demolish hundreds of buildings in north St. Louis. But Spencer said more of McKee's deals with the city never received any oversight from the Board of Aldermen. She said that gives even more reason to start investigating the developer.

“Perhaps nothing will come out of it,” Spencer said. “But certainly the public has a lot of questions, and we need to address those questions adequately.”

Mayor Lyda Krewson indicated on Twitter last week that the city would investigate the allegations. But Spencer said that an internal investigation would not be sufficient because some city officials may be complicit in the alleged scheme. Krewson has not responded to a request for comment.

McKee said on Thursday that he did not want to comment because he has not seen the resolution.


Follow Kae on Twitter: @kmaepetrin

Kae Petrin covers public transportation and housing as a digital reporter for St. Louis Public Radio.

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