An eminent domain bill meant to secure the land needed for the headquarters of a federal spy agency cleared a committee of the St. Louis Board of Aldermen on Wednesday.
Officials say the move is necessary to protect the city against a lawsuit that seeks to take back some of the land in the 97-acre planned location of the National Geospatial-Intelligence Agency’s $1.75 billion facility.
The LCRA Holdings Corporation, a nonprofit associated with St. Louis’ Land Clearance for Redevelopment Authority spent millions to acquire the land from various owners. That included using eminent domain against 43 property owners who did not want to sell to the city. LCRA Holdings also purchased about 360 properties from developer Paul McKee, who had the exclusive rights to redevelop the property in the site.
In June, the city of St. Louis found McKee in default of a 2014 redevelopment agreement for two square miles of north St. Louis, which included the NGA site. In July, the Bank of Washington, which financed the deal between McKee and LCRA Holdings for the NGA land, sued, saying that the city had actually been the one to break the agreement and therefore, it could take back McKee’s former properties.
The city filed its own lawsuit, known as a quiet title case, asking a judge to rule that the holding company owns the land outright. A St. Louis circuit court judge allowed the case to go forward Monday, and has set it for trial on Oct. 3. But the federal government asked the city to start the condemnation process, which would also guarantee that no one else can claim the 97-acre site.
“We think quiet title is the answer,” said Otis Williams, the executive director of the St. Louis Development Corporation, which oversees the LCRA and the holding company. “It is the federal government that thinks condemnation may be the better route.”
Williams said he expects the condemnation process to be quick, “because this is an action between friendly parties.” But the Bank of Washington could seek to raise some of the same arguments from its lawsuit against the city. An attorney for the bank did not return a call for comment.
The city will have to pay the holding company fair market value for the land, but Williams said none of it will come from the city’s general fund.
“LCRA is the entity with the most assets, so we’ll use those assets to be able to borrow and negotiate with financial institutions. So that’s what we’ll do,” Williams said.
The full Board of Aldermen could pass the bill as soon as Sept. 21, although the end of the month is more likely. The sponsor, Brandon Bosley, D-3rd Ward, said he hopes to have unanimous support at that step as well.
“It’s just important that the city does what’s necessary so we can give [the federal government] the reassurances they need to move forward on their end with the project,” he said.
The city plans to turn the land over to the federal government in mid-November.
Follow Rachel on Twitter: @rlippmann