Newspaper article St Louis Post-Dispatch (MO)

State Issues $10.5 Million More in Tax Credits for McKee

Newspaper article St Louis Post-Dispatch (MO)

State Issues $10.5 Million More in Tax Credits for McKee

Article excerpt

Just like 2011, and the year before, and the year before that, developer Paul McKee closed out 2012 by receiving a big chunk of tax credits from the state of Missouri.

In two awards over the last 10 days of the year, McKee's NorthSide Regeneration received $10.5 million in credits tied to the cost of assembling land across 2 square miles of north St. Louis.

That brings the state's tab for the long-stalled NorthSide project to more than $40 million, a figure that could soon rise if McKee receives another credit for other purchases he made last year.

The developer declined to comment Wednesday, citing an ongoing lawsuit over the project that's being mulled by the Missouri Supreme Court. But since being created in 2007, the Distressed Areas Land Assemblage tax credits have been a crucial part of financing for McKee, and only for McKee.

They pay back purchase, maintenance and interest costs on buying land in poor urban areas of at least 75 acres. McKee's NorthSide project is the only development in the state that's big enough to qualify.

But progress on NorthSide has been slow.

The economy has crunched lending for commercial real estate, and the project's $390 million tax increment financing package has been bogged down in lawsuits for two-and-a-half years. A handful of small pieces have moved forward and McKee recently unveiled plans for a few dozen new homes. But the "transformation" that the veteran developer first pitched to wary residents nearly four years ago still seems a long way off.

The Missouri Supreme Court could have a big say in where it goes from here. Judges heard arguments on the TIF suit in November and are expected to rule soon.

McKee has said a green light from the Supreme Court would jump- start NorthSide, allowing him to fund road and sewer work and bring in new businesses. A red light, though, could prove costly. As a condition of awarding the credits each of the last three years, the Department of Economic Development has said it will demand repayment if NorthSide's redevelopment plan falls through. Since the credits are already sold and the proceeds sunk into the project, it's unclear where McKee might come up with the $20 million. …

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