Aldermanic Committee Recommends Renewing Tax Incentives For McKee Urgent Care | St. Louis Public Radio

Aldermanic Committee Recommends Renewing Tax Incentives For McKee Urgent Care

Oct 2, 2019

An aldermanic committee voted Wednesday to extend deadlines and renew tax incentives for the developers behind Northside Regeneration’s slow-moving urgent care project. 

The vote came after the city's own attorney and its economic development arm pointed out legal and financial concerns.

The new bill would extend a 2017 development agreement that partially reimburses Paul McKee for building a three-bed urgent care on the former Pruitt-Igoe site. The development was eligible for $6.4 million in tax incentives for its first phase, another $1.6 million for its second phase and additional tax incentives. 

But the developer did not meet the deadlines in the original agreement, meaning incentives must be re-approved.

It remains unclear whether the bill can legally be passed as it’s currently written. The city attempted to sever its development agreement with Paul McKee last year, stating little had been done in the larger 1,500-acre project area. But McKee lender Bank of Washington sued the city, and litigation is still ongoing. 

Several aldermen referenced a letter sent by the city’s own attorneys, saying the tax incentives were tied to the terminated agreement. The developer’s attorneys argued that the urgent care agreement isn’t related. 

Committee Chairman Joe Roddy, D-17th Ward, said he wasn’t sure why his committee was being asked to resolve legal questions it’s not qualified to address. He wanted to delay a vote until next week so that officials and developers could solve the more complex legal issues before aldermen consider the bill. 

But 22nd Ward Alderman Jeffrey Boyd pushed for an immediate vote. 

Boyd said he didn’t think that city agencies would work with Northside Urgent Care representatives to pass the bill unless it moved to the Board of Aldermen. 

“I don’t have the confidence that they’re going to do what they really need to do. It’s going to be a slugfest. Because that’s what this thing has been all this time,” he said. “It’s a disservice to people in the African American community.” 

The committee then voted 4-3 to pass the bill. 

“I don’t believe the people who voted for it understood the ramifications of what they just did,” said Otis Williams, St. Louis Development Corporation executive director. 

During the hearing, Williams told the committee that the developer would need to revise the agreement before the city could approve it. 

“The thing I want to be sure that everyone understands here is that, one, we support the project, but two, we think it needs to be financially feasible,” he said. 

Williams provided projections showing the agreement as written could cause large financial losses for St. Louis. 

A lawyer representing the project, Darryl Piggee of Stone, Leyton & Gershman, said that his team hadn’t seen those financial projections and didn’t agree with them. 

“I find it peculiar that we’re on the defensive. Here’s people trying to bring a hospital, and we’re on defense,” Piggee told the committee. “The developer and the investors are poised and ready to go forward.”

The project has proceeded slowly since its proposal in 2014. Under the 2017 agreement, construction should have finished earlier this year. But instead, construction on the site stalled and partial walls collapsed. The city revoked, then reinstated, the urgent care’s building permits. 

In a progress report filed with the state, Northside Regeneration representatives wrote: “Construction efforts are underway. Expected completion in 2nd quarter of 2020. Delay caused by Federal Government's failure to release New Market Tax Credits.”

The bill now moves to the full Board of Aldermen.

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