Land Banking Muddies St. Louis Redevelopment (UPDATED)

A single St. Louis developer has quietly acquired thousands of parcels of land, which the city then conveniently slated for redevelopment, putting all of its weight behind this one man’s vision. How did this happen, and does it bode well for St. Louis?

St. Louis has a plan to develop a huge swath of its downtown, including the former Pruitt-Igoe public housing development, but very little about the plan has been made public. nextSTL

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This piece originally appeared on nextSTL.

“The first time I ever saw St. Louis,” wrote Mark Twain, “I could have bought it for six million dollars, and it was the mistake of my life that I did not do it.” St. Louis developer Paul McKee appears set to not make the same mistake.

First, McKee purchased hundreds of parcels of land across a wide swath of north St. Louis City with no one noticing. Once the process became public, the purchases slowed, but continued. At Sheriff’s sales and through private transactions, his holdings grew strategically. In the meantime, allegations regarding brick theft and fires, usually stopping just short of implying complicity on the developer’s part, appeared.

All along, those hoping for better reinvestment in North St. Louis put their faith, if not their enthusiasm, in what would become the NorthSide Regeneration project. By 2011, McKee owned nearly 1,000 parcels. Recently, with the city’s blessing, McKee acquired the 17-acre Bottle District site just north of the Edward Jones Dome. As far back as 2009, it was anticipated that the more than 1,200 city-owned parcels in the redevelopment area were likely to become part of this redevelopment effort as well.

It appears that this is now set to happen. The St. Louis Post-Dispatch‘s Tim Logan reports that the city’s “top development officials” and Mayor Francis Slay are supporting the move. Included in the sale would be the 34-acre Pruitt-Igoe site, a former housing project now seeking a redevelopment strategy.

The price: $100,000. The approval process begins Monday. Effectively, no one other than McKee has the opportunity to purchase the land in question. NorthSide spans the JeffVanderLou, St. Louis Place and Carr Square neighborhoods.

Along the way there has been plenty of public concern, but no effective, coordinated opposition. In fact, opposition has been so disjointed that when 5th Ward Alderman April Ford-Griffin stepped down in October, no consensus candidate emerged that would oppose McKee’s NorthSide. The city’s 5th Ward encompasses a majority of NorthSide, including Pruitt-Igoe.

Tammika Hubbard, an insider’s insider, won the special election. Hubbard’s mother Penny is a state representative, and her brother Rodney Jr. is a former state representative. Her father, Rodney, is chairman of the ward’s Democratic Central Committee, but also serves as executive director of the Carr Square Tenant Corporation, which runs the Carr Square housing development and owns a 2.5 percent stake of NorthSide Regeneration LLC. Tax credits received by NorthSide have been transferred to the Carr Square Tenant Corporation. They also own the crumbling Carr School, which McKee has stated he would like to develop.

This alone doesn’t illustrate anything necessarily nefarious, but fully highlights how city politics have been aligned to facilitate McKee’s vision at every turn. The only roadblock has been a court case, still pending, challenging the city’s ability to award Tax Increment Financing to a project area, and not a specific, targeted, shovel-ready project. It’s a smart bet that no matter the outcome, the city will find ways to financially support NorthSide.

If people believed that the city had gone all-in with McKee to this point, his holdings will soon more than double, totaling more than 2,000 individual parcels and nearly half of the designated 1,500 acre development area. He told the Post-Dispatch that the combined holdings will allow him to present a wide range of options to potential businesses and developers.

And yet exactly zero development plans have been made public. The Pruitt-Igoe site is not a straight sale, but a two-year option to purchase at $100,000. Who wouldn’t want the exclusive option to market 34 acres in the city, align state, federal and city tax credits with zero risk? Once again, the city is choosing to place an incredible amount of faith in Paul McKee.

For its part, St. Louis makes the argument that it also risks nothing as the land is currently a liability. Of course, privately owned land without a development plan presents its own liability to the city and its residents. In the wake of the news, Mayor Slay tweeted, “Selling 1,200 tax delinquent parcels for a large development actually proves the strategy of land banking.” The pending sale, however, does not prove that the process of land banking has been fair or worthwhile until development occurs on a large portion of the land. Otherwise, the strategy will only have proven that, after three decades, the city has found someone else to mow the yard.

The sale would reduce the number of city-owned parcels by more than 10 percent and represent the largest single sale of city land in history. Whether or not development occurs, City Hall is selling the sale as a victory. The city would receive $3.2 million for the land and $100,000 in tax revenue even without development, according to Rodney Crim, executive director of the St. Louis Development Corp.

“Whenever possible, we want land in the hands of the private sector,” Jeff Rainford, Slay’s chief of staff, told the Post-Dispatch. “As long as the city’s holding the ground, nothing’s going to happen on it. Our bias is trying to get this land out the door.” By any measure, market demand for the parcels acquired by McKee has been nearly non-existent.

Together, McKee and the City of St. Louis have already accomplished something that while maybe not admirable, is impressive. Assembling standard lots of 25 feet by 130 feet is a widely recognized challenge in historic cities. St. Louis has now done this better than any other American city. It’s not hyperbole to state that NorthSide is the most significant story of land banking, and hoped for urban renewal in America, by far.

Of course, St. Louis has never been afraid of the Big Idea. The city does continue to shy away from public process. Where else can a city aid a developer in purchasing more than 800 parcels and then cut a deal to sell another 1,200 without public deliberation? Alderman support sometimes serves as a stand-in here, with clear shortcomings. The story of this incomparable development has not been well told to this point. It should receive attention now.

UPDATE: It’s just been reported out of a city meeting that $100,000 will get McKee a two-year option on the Pruitt-Igoe site, and that the final purchase price would require another $900,000 for a total of $1 million.

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Tags: governancest. louisland banksfrancis slaypruitt-igoe

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