At the end of 2009, developer Paul J. McKee, Jr. received $19.62 million in Distressed Areas Land Assemblage Tax Credits. According to the developer's application, McKee's Northside Regeneration LLC claims a little over $25 million in assemblage, interest and maintenance costs to date, and projects an additional $66 million in acquisition costs. Only part of the application has been released publicly, so a breakdown of those figures is not yet available.
The $25 million figure corresponds to the amount of a $25 million Second Mortgage and Deed of Trust filed with the St. Louis Recorder of Deeds by Northside Regeneration LLC on December 10. That second deed of trust is guaranteed by Paric Corporation, the construction company founded by McKee and now headed by his son Joe McKee.
Now that McKee has the tax credits he claimed all last year he needed to proceed, what will the developer do with the proceeds of selling them? Pay down his debt.
That use of the credits may surprise those who put stock in the words of supporters of the tax credit, including Lt. Gov. Peter Kinder, who claimed those credits would enable development of north St. Louis. Those who read the tax credit bill realized that it was in effect remuneration for questionable acquisition activity already underway.
Now that McKee has received his first payment and announced his intended use of the proceeds, we know that he will have paid down most of his claimed debt. Since McKee's company continues to fail to secure and adequately maintain holdings, his holding costs must be minimal. This payment enables him to sit for another length of time.
More importantly, however, this payment enables city government to look more carefully at the Northside Regeneration project. McKee can no longer claim that the Board of Alderman's lack of action is keeping him from money he needs to survive. The developer has redevelopment rights and TIF financing secured through the ordinances passed in October 2009. Both sides are even. There are going to be additional bills needed to enable redevelopment of the four areas McKee has divided the project into, and to activate the tax increment financing. This time, the Board of Aldermen and Mayor Francis Slay should not rush the process.
There needs to be a full and open debate of whether or not the project's boundaries are appropriate, whether eminent domain restrictions need to be stronger, whether historic preservation planning ought to be included in additional ordinances, and what happens to McKee's holdings outside of his project boundaries in the Old North St. Louis neighborhood.
Let's lay this all on the table before passing more enabling ordinances.