Categories
Demolition Fountain Park North St. Louis Public Policy St. Louis Building Division

Emergency Demolition Orders Made to Suit?

by Michael R. Allen

Last week I noted the demolition of the three-story commercial building at Page and Kingshighway in Fountain Park (see “Demolition Comes Twofold to Page Boulevard”). A driver struck the corner column on the first floor of the building, leaving the corner unsupported. Owner Roberts Brothers Properties did nothing to stabilize the corner, and eventually the building started collapsing at the corner. On March 21, the city’s Building Division issued and emergency demolition permit for the building — and two other freestanding buildings on the same parcel!

The emergency order includes two two-story commercial buildings that stand east of the condemned building. These buildings are vacant and also owned by Roberts Brothers Properties, but have no structural damage that would warrant emergency condemnation and demolition under the city’s building code.

The inclusion of these buildings in the demolition order brings to mind last year’s demolition of the entire Brecht Butcher Supply Company Buildings, owned by Paul J. McKee, Jr., despite the fact that only one of the three buildings suffered enough fire damage to warrant emergency condemnation. In that case, the three buildings shared party walls, so the Building Division’s action made a little more sense even if it was premature.

This time, the three buildings share no walls. There is absolutely no connection between the collapsing corner of the large building and the condition of the two neighboring buildings. Should we assume that the Building Division is willing to twist public safety laws to allow owners to clear sites for development? Or perhaps the Building Division has such prejudice for historic buildings that it cannot restrain itself faced with an opportunity to take down three buildings instead of one?

No matter what the intention, the result is that one city agency assigned to uphold public safety is thwarting any attempt to implement real preservation planning. Really, all three of the buildings at Page and Kingshighway could have been preserved. Even after the corner collapsed, the corner building was stable enough to repair. The Building Division could have ordered emergency stabilization. Although the Division can only spend money on emergency demolition, and not stabilization, perhaps it’s time we changed that, A temporary corner support — which one can buy at Home Depot and many homeowners could have installed — would have cost much, much less than demolition and given the neighborhood more time to explore the future of the building.

Our demolition process suffers from a lack of development vision. Without meaningful citywide preservation planning, each demolition decision is made without any legal guidance. The Building Division has discretionary power that prevents careful planning. Yet even if the Division wanted to step in and try to stabilize a building, it lacks enabling authority to do so. These issues need to be resolved. Currently, only an alderman can intervene in this process and force an outcome — and not always. We need to reform our demolition process through enactment of real comprehensive preservation planning legislation.

Categories
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.

Categories
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.

Categories
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.

Categories
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.

Categories
Events Historic Preservation Public Policy

Historic Tax Credit Programs Class Tonight

Join ReVitalize St. Louis and the Rehabbers Club for our next highly informative Fall 2007 Rehabbers Club class:

Historic Tax Credit Programs

Wednesday, November 28, 2007
7:00-8:30 p.m.
Saint Louis University’s Humanities Building, 3800 Lindell
Boulevard, Room 142 (1st floor conference room)

This week’s expert speakers and presenters are Lynn Josse, Maureen McMillan and Melinda Stewart.

This week’s class will focus on:
– The relationship between the rehabber and the tax credit application preparer
– How to work with a preparer (do you need one?)
– Types of historic designation that do and don’t make your project eligible
– How to get that historic designation if you don’t already have it

After the initial presentation, extra time has been set aside for
your questions.

Fee for Individual Class: Only $10 each – and if you join ReVitalize St. Louis at the session ($20 level or above), you get that night’s class for free!

PARKING: Onstreet, metered parking is available along Lindell or Vandeventer or park in the Moolah Theatre garage behind 3821 Lindell. Garage parking is $1 per hour, but their gate is frequently open at the end of our classes. Garage tickets can be validated at the Moolah Theatre in exchange for a purchase at their bar or
concession stand. Do not park on SLU’s campus without a SLU permit; you will be ticketed!

PAYMENT: We accept checks and cash at the door; sorry no credit cards. The class fee is tax-deductible. Your support of these classes benefits ReVitalize St. Louis, a 501(c)3 not-for-profit organization, and its projects including the Rehabbers Club and the annual Big BIG Tour.

Categories
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.

Categories
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.

Categories
Missouri Legislature North St. Louis Northside Regeneration Public Policy

Distressed Areas Land Assemblage Tax Credit Act Signed by Governor

by Michael R. Allen

Yesterday Governor Matt Blunt signed into law the “economic development” omnibus passed by the Missouri legislature last week. The bill contains the Distressed Areas Land Assemblage Tax Credit, a measure designed to reimburse landbanking costs in impoverished areas. Specifically, the tax credits’ authors intend for them to be used in north St. Louis for a project by developer Paul J. McKee, Jr. The details of that project are not available to elected officials or citizens.

Categories
Missouri Legislature North St. Louis Northside Regeneration Public Policy

Distressed Areas Land Assemblage Tax Credit Act Remains Much the Same

by Michael R. Allen

Yesterday, on the last day of the legislature’s special session, the Missouri House of Representatives passed the economic development omnibus (HB1) sought by Governor Matt Blunt. The bill contained a new version of the Distressed Areas Land Assemblage Tax Credit Act (DALATCA), modified slightly in the House and Senate economic development committees and on the floor of the Senate.

The basic formula proposed by Blunt survived: The credit creates a $95 million tax credit program that covers 50% of acquisition costs and 100% of maintenance and interest costs on eligible parcels located in census tracts that meet federal and state income-based definitions of distressed areas. No more than $10 million in credits will be issued annually. The tax credit is available to applicants who have assembled at least 50 acres within a 75-acre redevelopment area established by a municipal redevelopment agreement. The 50 acres need not be contiguous, and no parcel acquired by eminent domain is eligible for the credit. The applicant can only redevelop 75% of the project area alone, and must assign redevelopment rights to other developers or create partnerships to redevelop the remaining 25%.

Obviously, the tax credit structure has changed very little since first proposed by Peter Kinder in February 2007 and drafted by Steve Stone, attorney for developer Paul J. McKee, Jr. The whole idea is still predicated on a scale that is unrealistic for urban areas and small towns. The whole idea remains predicated on rewarding McKee for an acquisition project he has already undertaken in north St. Louis. Consequently, the credit fundamentally is a reimbursement for purchases already made rather than an incentive for future development.

However, the legislature made a few changes to the tax credit, at least one of which may be of consequence:

The credits cannot be used to cover fines or bills levied by municipal government.

To be considered eligible, a parcel must have its municipal taxes, fines and bills paid in full.

The redevelopment agreement must be approved by ordinance of the governing body of a municipality.

The redevelopment agreement must include a timeline for redevelopment.

All redevelopment work conducted by the applicant must be done in compliance with Missouri fair labor and wage laws.

The tax credits are considered redevelopment tax credits under state law, requiring an applicant to furnish financial information as well as project cost and completion date.

These are small but welcome improvements to the bill. However, the only ones that alter the state’s expectations of an applicant are those relating to redevelopment timelines. These stipulations encourage actual development planning and construction, two aspects not previously part of the proposal. The two stipulations relating to municipal fines and bills are important on principle, but are of minor consequence to the nature of land assemblage rewarded by DALATCA.

The version of DALATCA headed to Governor Blunt’s desk may require McKee to make his project better, but it won’t enable other people to start new ones. DALATCA remains a gilded albatross designed for one project. The governor should veto the omnibus, but that seems unlikely. Still, the scrutiny that the tax credit act invited may lead to future amendment or scrapping of DALATCA and enactment of a tool of wide and true use to distressed areas in Missouri. After all, most legislators probably weren’t thinking about the scale, form and nature of development before this tax credit act came along. They will take some time to learn the lesson that DALATCA is a huge mistake.

Full text of HB1 is available here; DALATCA is section 99.1205.