DALATC Demolition North St. Louis Northside Regeneration Old North

Old North Building Owned by McKee Demolished

by Michael R. Allen

The house at 1412 Sullivan Avenue in Old North St. Louis fell to wreckers last month. The building was already badly deteriorated when Paul McKee’s holding company Babcock Resources LLC purchased the property at a sheriff’s sale in October 2007. (See “McKee Purchases Building on Stable Block in Old North”, October 25, 2007.)

Complaints from some neighbors over bricks falling from the parapet wall led to Building Division action. No, not stabilization or a nuisance property suit, but “emergency” demolition, via an order issued on April 16 by Demolition Supervisor Sheila Livers.

The 1400 block of Sullivan Avenue has only seen one demolition since the start of the twentieth century. The block of Hebert Street to the north has seen none (although it has three McKee-owned buildings on it now), making it the only fully intact block in Old North. Still, this block of Sullivan came in closely behind, with a strong sense of historic character and committed residents.

Obviously, McKee cannot tear down the rest of the block. Mayor Francis Slay would be crazy to approve eminent domain use in Old North, where he has attended several house fundraisers for his campaigns. McKee’s interest in this property stems from its ability to help him qualify for acreage requirements under the Distressed Areas Land Assemblage Tax Credit as well as to have further political leverage in Old North. The building was inconsequential to his plan — but vital to the sense of place of those who look out of their windows and now see a pile of brick bats.

Would it have hurt McKee to have put a new roof on the building and done some brick work? Those expenses would have qualified as maintenance costs under the same tax credit that covers demolition. Promises to do better with maintenance are meaningless in the face of demolition by neglect.

For residents of Old North, amid a $35 million rehabilitation project that will reopen 14th street and rebuild 28 buildings, this is a small blow. We’re on a roll. Still, that makes this loss so much more senseless.

DALATC JeffVanderLou North St. Louis Northside Regeneration Old North St. Louis Board of Aldermen St. Louis Place

Will Aldermen Consider McKee Plan This Year?

by Michael R. Allen

My latest “Inside the Metropolis” column for the Vital Voice is more timely than I imagined when I submitted it:

Will Aldermen Consider McKee Plan This Year?

DALATC Illinois landbanking Public Policy Southern Illinois

Illinois Seeks to Get in on the Distressed Areas Land Assemblage Tax Credit Action

by Michael R. Allen

On February 14, Illinois State Representative Jay C. Hoffman (D-112th), introduced a bill in the Illinois General Assembly to create a Distressed Area Land Assemblage Tax Credit for Illinois. The bill, HB 5153, takes verbatim the enacted text of the Missouri Distressed Areas Land Assemblage Tax Credit Act.

Hoffman represents a district that includes the Metro East cities of Collinsville, Edwardsville, Maryville and Fairview Heights.

DALATC Missouri Legislature Northside Regeneration Public Policy

DED Seeking Comments on Rules for Distressed Areas Tax Credit

Via Pub Def: Draft “Land Assemblage Tax Credit” Application Ready for Comments

Feel free to discuss the rules in the comments section here. I will be posting my analysis in February.

DALATC Kansas City Missouri Missouri Legislature Northside Regeneration Public Policy

Bill Would Lower Acreage Requirements for Distressed Areas Tax Credit

by Michael R. Allen

Missouri State Senator Yvonne Wilson (D-9th), who represents Kansas City, has filed SB 814, a bill that would decrease the size of a project eligible under Missouri’s Distressed Areas Land Assemblage Tax Credit (DALATC). Wilson’s bill would set the minimum project size at 40 acres, with an applicant required to own only 30 of those acres. The credit now requires projects to be 75 acres and applicants to own a minimum of 50 acres.

While there are numerous structural flaws with DALATC, and while 40 acres is still a fairly disruptive project size for urban areas, Wilson’s proposal is a step in the right direction.

Perhaps not coincidentally, reforming the DALATC is one of the planks in the 2008 Missouri Public Policy Agenda for the Greater Kansas City Chamber of Commerce.

DALATC North St. Louis Northside Regeneration Public Policy

McKee’s Holding Companies May Be Preparing for Tax Credits

by Michael R. Allen

There may be movement afoot on the part of developer Paul J. McKee, Jr. to get ready for an application for Missouri’s Distressed Areas Land Assemblage Tax Credit. On October 26, four holding companies owning land in north St. Louis — Blairmont Associates, VHS Partners, Noble Development Company and N & G Ventures — each filed deeds of trust covering all property purchases made before 2006, when McKee’s holding companies began filing individual deeds of trust for each property.

Each company’s deed is for the same amount, $3 million and granted by the Corn Belt Bank & Trust Company of Pittsfield, Illinois. Two years ago, Corn Belt granted a loan of $2.8 million to McKee’s Allston Alliance for the purchase of the vacant Cass Avenue Schnucks store.

Each company’s deed was signed by Paul J. McKee, Jr. in capacity as manager of the other limited liability companies that act as sole members of the holding companies. Blairmont Associates’s sole member is BMA Partners, VHS Partners’ is Vashon Developers, Noble Development Company’s is NDC Venturers and N & G Ventures’ is NGV Partners.

Under the terms of the Distressed Areas Land Assemblage Tax Credit Act, a land assembler is eligible for up to 50 percent of the purchase costs of land. At the maximum eligible amount, these recent deeds of trust would entitle McKee’s companies to $6 million in tax credits.

DALATC Downtown North St. Louis Northside Regeneration Public Policy South St. Louis

Baron May Seek Distressed Areas Land Assemblage Tax Credit Act; Discussion Needed

According to recent articles in both the St. Louis Business Journal and the St. Louis Post-Dispatch, developers McCormack Baron Salazar may seek the new Distressed Areas Land Assemblage Tax Credit for the massive Chouteau Lake and Greenway project that they have contemplated for nearly a decade. This possibility is based on the fact that the state Department of Economic Development considers the entire city of St. Louis a distressed area under the legal definition of the tax credit act. Thus, any project in the city that meets the tax credit’s other requirements could qualify.

This probably isn’t what the authors of the tax credit had in mind, but the use would not be a bad thing. After all, the connection between the south side and downtown historically has been weak due to the railyards and Mill Creek before that. While rail lines are important and could see greater use in future times, the visual and physical barrier along the southern edge of downtown is detrimental. On one side, we have downtown and its burgeoning vitality. On the other side, the strong historic neighborhoods of the near south side. Between, we have the rail yards, the anti-urban campuses of AmerernUE and Ralston Purina and countless marginal uses. Making connections across this expanse will be a huge and visionary undertaking.

According to Richard Baron of the firm, he and his partners already control 23 acres in the project area. The tax credit would allow them to acquire more. Their project is unlikely to involve any residential relocation at all, although it may eventually include eminent domain.

While perhaps not the most pressing need for urban development, the Chouteau Lake project could be very good for the city. The details need full and open discussion. That discussion would benefit from the participation of developer Paul J. McKee, Jr., who has big plans for the northern edge of downtown. Unlike Baron, McKee has not published any rendering or discussed many details of his project. McKee has stated that he wants to use the Distressed Areas Land Assemblage Tax Credit in north city. In fact, his attorney Steve Stone is credited with writing the first version of the tax credit act.

These two large projects on the edges of downtown could unite the central city to its neighborhoods. The Distressed Areas Land Assemblage Tax Credit could enable wonderful urban-scaled projects that resolve big, old problems in the city — or it could enable years of neighborhood fear, deferred dreams and unfulfilled promises. Baron and McKee need to engage the public, each other, city planners and neighborhood leaders so that we don’t let two good opportunities turn into huge failures.

DALATC North St. Louis Old North Public Policy

Land Assemblage Project Yielding Development Results in Old North St. Louis

by Michael R. Allen

Detail of commercial building at 2712 N. 14th Street.

A land assemblage project has led to large-scale development in the Old North St. Louis neighborhood. Construction is almost fully underway at Crown Square, better known as the “14th Street Mall” redevelopment project. The moribund 14th Street Mall had long been an impediment to redevelopment of the historic neighborhood, with a pernicious spread of abandonment out from its center at the intersection of 14th and Montgomery streets. Since the closure of 14th street in 1975, the commercial district lost viability and eventually almost every commercial and residential tenant.

The abandonment of buildings led to fires and demolition into the late 1990s. Since the “mall” began as a thriving urban commercial district, ownership was never consolidated. In the years of decay, divided ownership and some land speculation proved as big an impediment to revitalizing this area as the abandonment.

Several years ago, the Old North St. Louis Restoration Group formed a partnership with the Regional Housing and Community Development Alliance (RHCDA) to acquire properties around the mall for redevelopment. This move was debated within the community and initiated by the neighborhood organization, which sought the strategic partnership with RHCDA.

The assemblage strategy was to overlay the area. Basically, if a property was vacant, the partnership made an attempt to acquire it. If it was occupied, the partnership did not. The partnership expressly avoided the use of eminent domain, rumor-mongering or threats in their assemblage operation. In fact, they did most of the necessary assemblage without a redevelopment agreement that would have granted condemnation rights.

Also noteworthy is that the overlay approach was based upon full respect for the traditional lot sizes of the neighborhood. This restriction would force the partnership to do development on the intimate, urban scale of Old North St. Louis. However, the partnership intended to not only respect the scale of the neighborhood but its architecture as well. The plan of the partnership was to rehabilitate each of the nearly 30 buildings acquired, and later build on vacant land.

The goal of historic rehabilitation both honored the community’s pride in its heritage and allowed for utilization of an important financing mechanism: the state historic rehabilitation tax credit. That tax credit was key to ensuring that this project was economically feasible. The uncapped historic rehabilitation tax credit has seeming infinite use in north St. Louis and other areas where large-scale renewal is needed.

In the end, the partnership acquired about ten acres within a 25-acre redevelopment area. The remaining acreage includes streets and alleys — also key components of community renewal — as well as property owned by rehabbers, homeowners and businesses that are now stakeholders in the Crown Square project. As soon as assemblage reached desired levels, the partnership secured a redevelopment agreement with the city of St. Louis and sought financing to make the neighborhood’s dream come true. This is the project that should have been the basis for a smart distressed areas development project.

The result is a $32 million project that will create 78 residential units and 26,000 square feet of commercial space within a 16-block area. In a historic neighborhood with small blocks on a street grid, that’s a large project — and a great model for future endeavors in north St. Louis. Hopefully, the Distressed Areas Land Assemblage Tax Credit and the scale of development that it stipulates does not discourage people from learning lessons from Crown Village.

Follow the fast-paced construction work at Crown Square on the What’s New in Old North blog.