Ms. Sheila Rendom, President of the New North Side Community Benefits Alliance
Disclaimer:
The OPINIONS of Ms. Rendom do not necessarily reflect the views of RiverCity Publications, its staff or its Board of Directors.
This month I'm very appreciative that the Northside Community Benefits Alliance (NSCBA) treasurer, Keith Marquard, CPA wrote this monthšs NSCBA update. He is also a plaintiff in the suit challenging the constitutionality of the state Distressed Areas Land Assemblage Tax Credit...
By Keith Marquard, CPA
What in the world makes anyone think that Mayor Slay, or anyone on the Board of Aldermen for that matter, knows what they are doing in relation to economic development in the City of St Louis? We have had development disaster after disaster impose liabilities on the finances of the City of St Louis; from St Louis Marketplace, to One City Centre, and now to the Bottle District. The city now owes $2.2 Million dollars to Bill Simon, a property owner whose land was seized through eminent domain for the non-existent Bottle District development.
The seizure of Bill Simon's property was initiated in 2004 after Mr. Simon rejected the offers made for his land by LCRA. After Mr. Simon's rejection, LRCA started eminent domain proceedings and seized the property for the Bottle District Developer, Daniel McGuire of McGuire Moving and Storage. After a six year battle, the courts have ruled in favor of Mr. Simon and he is now owed $2.2 Million on top of the $1.2 Million that he has been paid by the developer. The developer so far hasn't come up with the money and the city is insisting that it doesn't owe the former owner this money, the developer does.
Unfortunately for city tax payers, and city officials, the city will most likely be forced to pay Mr. Simon the extra $2.2 million the courts have ruled that Mr. Simon is owed. The mechanism of eminent domain for private gain is that the government (in this case the city) is seizing the property of one private citizen or business on behalf of another private citizen or business. The government is lending its power of eminent domain to the private developer it chooses.
This is what is allowed when a TIF district is established. The only property owner in a TIF district with secure property rights is the person or business to which the TIF district is granted. The Missouri TIF and redevelopment laws essentially allow the government to pick economic winners and losers. So if you want to keep your home, business, or even church that happens to be in a TIF district you didn't want and don't approve of, you are out of luck if the developer designated by the government wants your property.
Any property owner in a TIF district can be forced out at the whim of the designated TIF district developer. If the developer insists he/she needs a certain parcel of property, the city will take it for the developer if they can't buy it at the price the developer wants to pay.
That's what Mr. McGuire did. He told the city that he had to have Mr. Simon's land. They gave it to him. Then Mr. Simon went to court and a judge determined what Mr. Simon's property was worth. That's the right of anyone caught in the eminent domain trap. It turns out it was worth a lot more than the developer or city wanted to offer Mr. Simon. No surprise there. Eminent domain is used as a tool to not only force people out, it's used to cheat them out of the true value of their property to the benefit of the politicians' favorite private business people.
But wait, there is another angle to this story. It seems that the Bottle District Developer, Daniel McGuire, was involved in another controversial land deal with the city. LRA had previously sold a parcel to McGuire that was known by LRA staff to be needed for the new Mississippi River Bridge. Ward 5 Alderperson April Ford-Griffin was instrumental in pushing for this sale to McGuire even though LRA staff had warned her and the LRA Board that the parcel would certainly be needed for the new bridge. McGuire so far has been paid $2.2 Million for this parcel by the State that he bought from LRA for $2. Yes, McGuire bought a city parcel of land for two dollars, and with the gracious help of Alderperson Ford-Griffin, he was able to turn around and sell it for over two million dollars. Just two dollars and the right political connections apparently get you the right to raid the state treasury and by extension, the wallets of every state taxpayer. McGuire is also suing the state for even more money because he doesn't think that $2.2 million is enough for his $2 parcel. Maybe this is so he can pay Mr. Simon. But one wonders what he's done with the original $2.2 million he got for flipping his two dollar LRA property.
This sordid tale also brings me to the Northside Project. This looks like another insider deal for a politically connected developer. Paul McKee, Jr., just by holding onto his vacant lots and tumbling down buildings he's purchased on the near north side, qualifies for a very generous state tax credit, the Distressed Areas Land Assemblage Tax Credit. This tax credit is saleable and Northside Regeneration, his LLC holding this property has already received $19.6 Million under this tax credit program.
So far, nothing has been done with any of this property Paul McKee, Jr. owns in North St Louis. No jobs have been generated. No benefits whatsoever have accrued to the community, yet the government has and will continue to pay through the nose for the privilege of having such wonderful people own chunks of the city of St Louis. The city and state pay money hand over fist to these so-called developers to produce results, but nothing gets done. It sounds a lot like Ballpark Village to me. The city and state pay, but nothing happens in return, or at least much less than was promised by the so-called developer.
We the people need to call out our elected officials for giving away the store to these so-called real estate developers. The United States is overbuilt largely due to the massive real estate bubble created over the past decade. The solution of our state and local politicians is to continue to subsidize the real estate development mafia as if the bubble still existed, continuing to throw good money (all of it your tax money) after bad. They also want to bail out their good friends these real estate developers.
That's what the McKee Distressed Areas Land Assemblage tax credit is all about, bailing out a failure. McKee's plan won't fly now that the bubble is over, and hešs having money problems with at least some of his other projects.
The Hazelwood logistics center is a case in point. He's already given one huge empty warehouse back to the bank. He built it but could never find a tenant for it. Now another bank is coming after him for a $28 Million loan on the rest of the project. Paul McKee, Jr. guaranteed that loan personally. Yet he can't pay it off. That bank, BankSouth of Mississippi is now suing him for the $28 Million. They don't want the property. It isn't worth what was borrowed to build it. They want the money. I don't blame them.
It seems that if McKee isn't getting some huge state or local subsidy, his projects aren't viable. His biggest tenant in his Winghaven development that he brags about so much is MasterCard International. They received at least $40 Million in state and local government incentives just to locate their corporate office there. They didn't move from New York. They didn't move from Chicago or L.A. They moved there from Maplewood. So we the people paid that money to move them from Maplewood to what is essentially St Charles? How is that a good deal?
This is typical of today's real estate development community. There is a group of them that can't do anything without a government handout. They cozy up to the politicians and the politicians fork over the cash or change the laws to the benefit of the big money interests. This is the soft corruption that is so pervasive in St Louis and Missouri.
Missouri real estate developers such as McKee and McGuire are the biggest corporate welfare queens in the state. We all remember the accusations from the 80's and 90's about welfare mothers driving Cadillacs and having ten kids because the welfare benefits were so very generous. You would think those same people who complained so loudly about federal welfare programs for the poor, would complain even louder about these new welfare queens who really do drive Cadillacs, Benzes, and Jaguars all the way to their bank where they deposit their paychecks from their subsidized businesses.
In some cases, I'm sure that the same people voting for welfare reform in the 90's are voting for big subsidies for developers in 2010. I think we the people need to send a big message to our elected officials at the state and especially the St Louis City level. NO MORE TIF! NO MORE HANDOUTS TO YOUR RICH FRIENDS! NO MORE EMINENT DOMAIN FOR PRIVATE GAIN!
We need to send this message not just by e-mail, mail or phone, but by the ballot box. Don't vote for the old guard who are gutting our communities and the finances of the state and city. Vote for change. Vote for new faces. Get involved in the local Democratic organizations. Get involved in other local political organizations. Make your voices heard. Let the people in charge know that if they don't quit being so loose with YOUR money, you will fire them and the people they support. We need to show the outrage over this malfeasance.
Politics is rotten in Missouri and St Louis. We need to clean out the dead wood and rot. We need to break it all up and start over.
The North Side Community Benefits Alliance meets the 2nd Monday of the Month at Vashon High School, 3035 Cass. You can read the monthly update of the North Side Community Benefits Alliance in the RIVER CITY EXAMINER NEWSPAPER. Check our website for contact information - NorthsideCBA.org and
e-mail to:
information@northsidecba.org. We are also on Twitter and Facebook. For meeting times or other information you can call
(314) 398-5478.
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