City to Terminate Agreement with Northside Regeneration, LLC

Claims developer in default of Redevelopment Agreement.

June 12, 2018 | 2 min reading time

St. Louis, MO- Today, the City of St. Louis served notice to Northside Regeneration that it has failed to fulfill numerous commitments to the City and is therefore in default.

In 2009, the City agreed to designate about 1,500 acres of land as the “Northside Regeneration Redevelopment Area”, which encompasses over two square miles. Furthermore, the City agreed to grant Northside exclusive development rights over the Area and also approved $390 million in public financing for Northside in the form of tax-increment financing. In return, Northside promised to invest in rebuilding neighborhoods and creating jobs throughout the Area.

In 2012, the City’s land bank and other redevelopment agencies added their support to the project and agreed to sell Northside more than 1,200 properties covering 160 acres of land in the Area, which included an option to buy the former Pruitt-Igoe housing development site. In addition, The State of Missouri awarded $43 million in Distressed Area Land Assemblage (DALA) tax credits which are required to be used for redevelopment in the Area. When the President of Northside Regeneration, LLC, Mr. Paul McKee was asked at the trial about the details of these transactions, he was unable to give a single example of any physical development, utilizing the proceeds of the tax credits.

To this date, no appreciable development has occurred and recently, a light was shined on the dealings of the project during the publicized eminent domain litigation over the value of the property at 1516-30 North Jefferson (formerly known as the Buster Brown building). At that time, the City’s development agencies learned about the State’s grave concerns with a number of real estate transactions.

Mayor Lyda Krewson issued a statement saying the City’s originally partnered with Northside Regeneration “because of the promise of much needed redevelopment.”

“Northside Regeneration has not lived up to its promises,” Krewson said. “The City has to take action. We had great hopes for this redevelopment agreement, but now we have to course correct.”

Otis Williams, Executive Director of St. Louis Development Corporation stated, “We worked with Northside over the past several years because of the promise of much needed redevelopment. At this point, redevelopment has not happened.” He went on to say, “entire blocks are in decay, roofs are missing, buildings are abandoned, grass has not been cut, taxes have not been paid and recent events have revealed transactions surrounding state tax credits, which were received, are being considered improper.”

The City of St. Louis has served notice to Northside that it has failed to fulfill numerous promises to the City under the Redevelopment Agreement and is therefore in default of a number of sections of the Redevelopment Agreement including misuse of the proceeds of the Tax Credits, only limited development in the Area and a failure to pay taxes on property.

 

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