Northside Regeneration: The Process is Still the Problem

by Michael R. Allen

Assessing the future of the Northside Regeneration project in light of Judge Robert Dierker, Jr.’s ruling against the project’s redevelopment ordinances is difficult. For one thing, the ruling has suspended the ordinances but left a loophole for reinstatement. Then, Northside Regeneration’s principal Paul J. McKee, Jr. has announced that his company will file a motion to return to Dierker’s courtroom, and that if that motion does not lead to the judge’s reversal, an appeal will follow. City Hall is cryptic but seems to be placing distance between itself and the developer. Statements from the aldermen involved in the ordinances tip no hands.

McKee makes it clear that the project is still a priority to him, and that it is in no way “over” because of Dierker’s ruling. Yet intention and outcome are joined by a process that requires ultimately convergence of the courts, residents, city government and even state government given the tax credits McKee needs to start the project. That process to date has been convoluted and seriously problematic to everyone involved. Without improving the process, no outcome can be certain except that conflict over the direction of the project will continue.At the end of pages rife with pointless ideological cant, Dierker picked up a problem with the process that citizens and planners raised before the approval of the redevelopment ordinances last year: the blighting of the entire potential project area in ordinances designed to initiate two phases of a multi-phased project whose developer stated last year at Central Baptists Church would be completed in thirty years if construction had started this spring. One of the first phase areas is in downtown, not the “north side.” Residents and property owners balked, for good reason.

To Dierker, the Board of Aldermen acted arbitrarily in declaring blight for the entire potential project area in order to establish tax increment financing for the first two project areas. According to Dierker, blight for tax increment financing must be established in consideration of actual construction plans – a condition rarely met in the city of St. Louis. Since blight carries the power of condemnation, its declaration is (rather mildly) restrained by Missouri law. The Board of Aldermen, according to Dierker, used its power to declare blight in a manner not permitted under state law.

While this author has no qualification to make a legal judgment of Dierker’s basis, I concur with the line of thinking. The structure of the Northside Regeneration ordinances was never appropriately detailed or geographically sensible for the area that they cover. The only reason for the structure was the requirement of the Distressed Areas Land Assemblage Tax Credit, written by McKee’s attorney, that the properties that used the credits be blighted under the same redevelopment ordinance with a 75-acre project acreage requirements. The Board of Aldermen passed an ordinance dictated by the state legislature rather than examine what was appropriate to the city. Of course, any one of the four project phase areas is over 75 acres, so there was no real need to put blighting in one ordinance.

As I stated last year, the project structure — not just the tax increment financing districts — should have been broken into individual enabling ordinances. In fact, there was some concurrence of views between myself and city officials, who mandated additional redevelopment details in each tax increment financing district ordinance. Those ordinances have not been passed, and Dierker’s ruling takes away their foundation. City government can invest itself in what could be a protracted battle to defend the existing ordinances, or it could spring forth now and work on creating new ordinances that would stand up to judicial review and address the problematic structure of the first attempt.

Pursuit of a lengthy appeal might actually put the Northside Regeneration project at greater risk. As the appeal would work its way through the courts, the project could be on hold, with work limited to clearance. At the end of the process, Dierker’s ruling even could be upheld by a higher court. Then what? The appeals process would be the developer’s best excuse for walking away from earlier promises, and in the mean time the near north neighborhoods included would suffer potentially years of further uncertainty. The instability needs to come to a close, and development must move forward.

Of course, I understand McKee’s unwillingness to take the matter back to city government. Planning is indeed very arbitrary in St. Louis, without predictable rules and with a ward system overlay that is a parochial impediment to smart planning. The fractured process for Northside Regeneration has a lot to do with the systemic problems in our city charter. The entire situation is an inversion of public function: the private developer has proposed the master plan and the public sector works on financing details.  (Of course, Dierker would disagree — there is little proper role for the public sector in development or especially planning to the conservative judge whose San Luis Apartments ruling questions the constitutionality of municipal urban planning.) No wonder the process has been so tortured. McKee is correct to bemoan the lack of entrepreneurial spirit in official north side redevelopment policy, but wrong to assume that the current episode is a model for future action.

Still, a wise leader in city government could begin building consensus now for new ordinances based on the four areas laid out in Northside Regeneration’s redevelopment plan. McKee probably wants to change things about the project by now anyway. The best thing now would be to avoid lengthy court battles and do what is needed – albeit difficult – to move the project forward. After all, there is consensus on the need for development and on the general quality of the Civitas redevelopment plan.

City government can draw out more details, and most importantly, listen to what people fear about it most. Property owners are afraid of this project – and willing to take it to court – because of eminent domain. Again, city and state laws provide poor guidance, but the right thing to do is exactly what the plaintiffs in the lawsuit want: exemption from the threat of eminent domain. New ordinances should include more careful blighting boundaries.

Of course, the eminent domain issue needs structural change so that developers like McKee know what’s possible before buying up acres of land and getting into trouble. According to the Castle Coalition, Creve Couer, Ellisville, Maplewood, O’Fallon and Olivette have all passed ordinances restricting eminent domain usage. St. Louis should join them, with an ordinance that categorically prohibits eminent domain on owner-occupied property. That would be a simple step to come out of the Northside Regeneration controversy that would benefit the entire city. Zoning and preservation review can come next.

What if the next big development happened with strong city ordinances governing eminent domain and zoning? Both developer and resident would start off knowing the same rules, and could quickly get to real dialogue. The future this city must build has to make that relationship possible, and the Dierker ruling tells us that the time to start was a long while ago.