McKee’s Northside Regeneration Moving Forward
As you’ve likely heard by now, last week the Missouri Supreme Court overturned a 2010 ruling that Paul McKee’s Northside Regeneration development plans were too vague for TIF financing:
After over 3 years of litigation, developer Paul McKee’s controversial Northside Regeneration Project is being allowed to proceed. On Tuesday the Missouri Supreme Court reversed a lower court decision blocking McKee’s use of so-called “Tax Increment Financing,” (TIF) for the development. (St. Louis Public Radio)
I’ve never been thrilled about how McKee handled property acquisition and maintenance, but I recognize the city’s total absence of planning and working toward a common vision left an opening for private interests without public input.
The project area is large but it’s a fraction of the city as a whole. There are many other parts of the city, north & south, dealing with continued population decline, increases in vacant buildings, and other signs of decay. Where’s the people upset the city isn’t doing anything to solicit public input in the rest of the city? Transportation, housing, jobs, education, etc are all being ignored.
The Jaco report just had Paul & Midge McKee on taking about their project, see the video here.
One of the biggest issues is the massive TIF (tax increment financing) package for the project. What needs to be understood is the pros and cons of the TIF tool. When a municipality invests in new infrastructure in stable and up & coming areas few tend to object since people see the value of improving desirable locations. Conversely, this means declining areas don’t see improvements in public infrastructure (sidewalks, roads, sewers, lighting, etc). Both are self-fulfilling in that rebuilding public infrastructure in the sable/improving areas further helps these areas while the lack of infrastructure investment in others accelerates decline in others.
Begin replacing sidewalks & lighting in sparsely populated declining neighborhoods and people will quickly question the return on that investment. This is where the TIF tool come in, a private developer agrees to invest in a blighted area and pay much more in property taxes than the municipality currently collects but only in part of that tazx is used to pay off bonds used to rebuild the public infrastructure the municipality can’t afford to rebuild otherwise.
The developer needs the new infrastructure to attract investors/buyers/tenants but the municipality can’t rebuild the infrastructure without a way to pay for it. The municipality can’t risk existing revenues to pay off bonds to rebuild the infrastructure so that means new revenue must be used. Sales taxes are a bad source for these revenues
- Residential & office development don’t pay sales taxes
- Sales taxes would take too long to accrue
- Our sales tax rate is already sky high
This leaves property taxes as a source of revenue. To simplify things say the property is paying $100/year in property taxes but after redevelopment the property taxes will now be $200/year. With the TIF the municipality/school district would still collect the $100 it always did, $5o (increment) would go to pay off infrastructure bonds and the remaining $50 would go to the municipality/school district. Do nothing get $100/year or do the project and get $150/year.
The actual numbers will be different but you get the point: public infrastructure gets rebuilt, building happens, more taxes are collected than if nothing happened. This is a simplified view and there are cons such as favoritism for the developer(s), risk of pushing out good people, etc.
My concern is St. Louis won’t require good urbanism such as strong pedestrian connections. The infrastructure needs to be rebuilt and TIF is the best way to do that, but we need to have a say on characteristics of the final development.
— Steve Patterson
I share your concerns, but I’m not sure what you mean when you state that “we need to have a say on characteristics of the final development.” Are you looking for veto power? Creating and implementing comprehensive design standards? Creating another document that people invest their time and effort on that ends up being ignored by both the city and the ultimate end users, aka, lip service? In other cities, I’ve seen the last two happen on a regular basis, while the only real veto power resides in elected officials willing to truly lead and represent the will of their constituents, and not in individuals, themselves, no matter how well-intentioned or an expert they may be.
I understood it as Steve wants this development to happen, but would prefer the people of the region have a say in what is developed (in terms of quality and structure) in this immense amount of land.
That’s how I feel as well.
In the Jaco Report linked in the article, I was surprised to hear McKee admit that what caused the city to fail was a lack of planning. If that’s the case why hasn’t he addressed the hundreds of people that say this North Side project is going ahead without a real plan. Why haven’t we seen full site drawings/renderings? Probably because they aren’t completely sure what to do with the area – frightening to think that in 6 months utilities, roads, and sidewalks will be laid down.
What should happen is McEagle and McKee need to take public input, and build what the people of our region want to see there. That would spur the public in supporting the project and give us hope that it won’t be a total failure.
People of the region??? Region, schmegion! “People of the region” have been abandoning the city for decades, and now you want them to weigh in on Northside???What are you talking about???
People like Steve, who would suggest pedestrian friendly development. People like Alex Ihnen over at nextSTL who would suggest appropriate design for what the area needs. People like Mark Groth of St. Louis City Talk blog who knows the region immensely and may suggest buildings that fuse better with the current look and feel of the city. People like Michael R. Allen of the Preservation Research Office, who would push to preserve every building, even those that are barely standing, that make up the history of the North Side area. People like me who only want the best for our region. People like you, since you clearly value something about this project or you wouldn’t be commenting.
I disagree that the people of our region don’t care about the city. If that were the case then McKee would have had his TIF 3 years ago and no one would have said a thing about it…or cared.
The TIF was blocked by a city judge over a lack of specificity. The Supreme Court reversed that decision, although it hasn’t changed a thing about the lack of specificity. There is still no actual project announced, except Dollar General. Re. participation, most of the people you list are urbanist bloggers. Not one lives in the Northside area. Maybe Michael lives in North City. And re. urban scale, the plan McKee showed a long time ago was sort of a green, urban, Shangrila. Watch as the thing slowly morphs to more and more light industrial, warehousing and distribution, and *maybe* office parks.
Again, no one is going to be building any infrastructure without a TIF deal in place. That TIF deal has financial requirements. Those requirements require a bondable development and likely a personal guaranty from the developer. Will McKee request the City to guaranty said TIF? Possibly. Would the Board of Aldermen approve such a request. Doubtful. The basic question is simple. What is the project???
I’m looking for the final deal to say buildings must front onto streets, not parking lots. That a person in a wheelchair, like me, should be able to get from the public sidewalk to each building, and between buildings. That drive through lanes not be adjacent to public sidewalks. Set minimum building heights, etc.
You mean the final *deals*. There could be fifty or a hundred of them. Does anyone really expect this project to come off as one, massive, “Mud Island” Memphis-styled project? Steve, I have a suggestion for you. Maybe the city ought to appoint a citizen’s advisory committee to review all project proposals, sort of like what’s going on at the Arch. You could be on that committee. Along with Simon Nogin. Then McKee would have to get committee approval before he could submit anything to the city for action.
McKee will go back to update the agreement, we’ve got one chance to improve it. Yes there will be hundreds of building permits but by then it’s too late. Now is the time to add good urban criteria.
So do you think a citizen’s committee should be created to oversee development proposals within Northside? Surely not all the design specifics you’d like to see will be covered in one uber TIF agreement.
Steve, I can see and hope that a forms based code as was implemented into CWE is added to the heart or residential portion of this project. Something that I think JZ would see the benefits of. It gives guidance, some direction and yet a flexibility that any capital is going to be looking for. In other words, that amount of re population needed to support thousands of row houses, mixed used, and other highly dense urban context building you desire seems unrealistic. Form based codes carving out areas with different goals seems like a reasonable and desireable way to move forward.
I also think that this vision for West Downtown commercial district is pretty good. Especially if he can pull off a relocation that would be the major tenant of a high rise office building book ending the Gateway Mall
t – I’m certainly not opposed to either a public process or realistic design standards – I’m very familiar with the efforts and processes that resulted in McKee’s poster child in Denver (Stapleton), and I see a whole lot of potential for similar success with his proposals for the north side. My point was simply asking Steve to clarify what he thought by “we need to have a say”. There was a many-year process that set the design standards for Stapleton (the Green Book – http://www.stapletondenver.com/community/better-plan/beauty-design . ..) Yes, it was much more of a public process than McKee is following here, but the land in Denver (the old airport) was also owned by the city, not by a private developer. The other big difference was that the airport didn’t have any existing residents (other than deaf jack rabbits and prairie dogs), making it essentially a blank slate, while the area here has both the existing street grid and many existing residents, people who McKee has apparently been trying to meet with, if somewhat privately and on a smaller scale than what occurred in Denver.
From the public side, Stapleton was “in the works” for many years (1989-1995) because it took that long to build the new airport before the old airport could be closed and repurposed. Here, any real public input appears to be limited by the time constraints imposed by McKee’s understandable desire to get started by the end of the year. This is, fortunately, offset by McKee’s apparent plans and desire to reuse (and even re-establish) much of the city’s historic street grid – unless we want to “reinvent the wheel”, there really isn’t that much to discuss about which streets go where. The real devil will be in the details, the things that are important to Steve and others, things like continuous sidewalks, street trees, tree lawns, curb cuts, etc. Whether the standards come voluntarily from McKee or are imposed by the city doesn’t really matter, in the long run, as long as they actually happen. And given both the design firms that McKee has retained and the likely market demand (by millennials, for walkable urban neighborhoods), I expect that there will be much more of a focus on walkability here than in many other new developments around the region.
Still, I understand everyone’s concern with the promises developers make – in too many instances, past history hasn’t been good. Ultimately, it will boil down to creating demand for product that currently doesn’t exist in north city, and we may be able to take some assurances from Stapleton’s success – it is bordered by the less affluent, less “desirable” and more “crime-ridden” neighborhoods of northeast Denver, north Aurora and southern Adams County. Much like Soulard, the Grove and Lafayette Square, and to a lesser degree, Benton Park and Grand Center, negative perceptions of neighborhoods can and do change over time, given the right investments, the right marketing and the willingness of pioneers to buy into the dream. And while I don’t totally agree with everything McKee is proposing, I admire his willingness to make the investments and to take the risks to try and make this happen – as others have noted, the status quo simply isn’t working.
The reason that drive-thru lanes are usually (at least partially) “adjacent to public sidewalks” is that they typically loop around the structure and the city usually requires that the menu boards and intercom be placed away from any adjacent residential properties, as is the case at the new drive-thru’s along Chippewa between Hampton and Watson. This is a case where the alderman is listening to existing residents and respecting their wishes (and the impact on their daily lives) over any sort of “better” urban design choices.
The problem in all of this participatory development–“we must have some say”
is who the “WE” is. Is it someone who happens to come to a neighborhood
meeting and stays until the end? This is “power to those who can afford baby
sitters.” In our system, we elect people to represent people–in St Louis, they
are called “aldermen.” And the alderman voted to give McKee the power
to develop the north side subject to existing city ordinances and subject
to existing city policies. Add in a new group of unelected people to push their
own ideas will simply add uncertainty and discourage investment, which is
going toi be hard enough to attract.
T
e
Get ready for drive throughs, box stores, cheap housing, and Dollar Generals! Yay development! (sarcasm)
What have you seen so far to indicate that McKee will do suburban sprawl infill in this development?
What have we seen to argue he wouldn’t? Right now it just seems like they will build whatever is cheapest to get greater profits.
TIF doesn’t work without a tax increment. The new taxes come from a tax paying development. A $300+ million dollar TIF needs a huge amount of development. What project is going to generate these tax revenues? Approval of the TIF plan by the Supreme Court doesn’t define a project. Usually when a city approves TIF, it’s tied to a specific development. The Ellisville Walmart. The Shrewsbury Walmart. Loughborough Commons. What actual development is being proposed at Northside?? Dollar General? IKEA? A new football stadium? And the TIF you might get off of a residential development is minimal in the first place, and non-existent if you try to incentivize home sales by offering tax abatement. Without more specifics, this seems like all smoke and mirrors. What am I missing here?
That’s the problem, right there, and the main reason Dierker ruled against McKee and Northside: For a project on this scale (or any scale, really) that is backed by TIF, a pretty substantive plan should be in place and presented as part of the approval process. He had none and the State/City completely failed to require one.
I really don’t understand what McKee gained by playing his plan as close to the vest as he did. His newly-launched website (http://www.northstl.com/) doesn’t have much detail, but at least presents the promise of it. Had he been more upfront from the beginning, this prolonged court decision would have likely been dismissed and he could already be a year or two into infrastructure work right now.
Infrastructure work funded by what? Without a project there is no TIF. What project? WHAT PROJECT?? Name…one! Any? Okay, Dollar General. TIF that and maybe you get curbs and new stoplight at the corner. The math here just does not work.
I think that’s what I was saying? Had he presented a specific scope of projects and an actionable plan to go with them, the judge wouldn’t have had been able to rule against him. Hence, McKee could now be well into the process of constructing the required infrastructure for the projects he had presented.
The days of backroom deals and do-whatever-I-want development are *slowly* coming to an end in St. Louis as more public input is sought/required/demanded on projects large and small.
We’re sort of mis-connecting here. Two years ago. Today. What difference does it make? There is no actual project with funding to back a TIF (unless you count Dollar General). Is there? Until that big TIF-able project is put on the table (with project funding) , not one shovel of dirt will be turned with TIF funding.
What the McKee’s had to say on the Jaco Report wasn’t that special. They gave rehearsed answers and did not seem real or meaningful. If that was their idea of helping boost PR, it sure didn’t work on me or my friends.
I think the best option for Mr. & Mrs. McKee’s, McEagle Properties, and Stl is to require that public input be taken about project. There already is so much immense negativity surrounding the entire thing, why not present it to the region, and then field questions and take suggestions! I can’t think of a better way to get the public to support something than letting them get involved. This concept (though at a grass-roots effort and quite different) is already being used in crowd-sourcing projects like BrickStarter and ONSL Restoration Group, and they are quite successful.
If I was McKee, I’d have public events to showcase what was going to become of the area. If not to improve the PR issue with the entire project than beacuse it is my money and my company on the line. I’d build residential areas to be more pedestrian oriented than personal vehicle oriented, relying on public transit and suggesting that street cars be brought back to the area. I’d focus on bringing an urban housing environment and point-out how vastly different these homes will be from the ones built out in Winghaven. Most important, I’d make it as attractive as possible for young middle class families. Doing all of this would help the schools improve, create interest in quality grocers locating into the area, and remove the blight associated with the area. What do you say McKee, McEagle, Stl, how about we let logic prevail?
These are all fine ideas. The problem is how to get from here to there.
While I applaud McKee for wanting to do this–to revitalize his city–I have my doubts. Is there really a market for this? Won’t people be scared off by the stigma of bad schools and crime? I can only see suburban, middle-class families moving into the area if they can be assured that their children will not have to attend the existing public schools and that their neighborhoods will get special protection from the police.
That’s not to say I don’t support the project. Although my preference is for bottom-up lot-by-lot revitalization (see: Old North St. Louis) it will be a great thing for the city if this succeeds.
The market is already there, you have families that live and work in North City, it’s not just a desolate landscape. My concern is taking care of the folks, mostly black folks, that have been taking the the biggest hit from McKee’s Blighting Project. This dude owns thousands of properties, that have been sitting in disrepair for years that nobody can touch, because he has a grand plan. The people of these neighborhoods should be the first to have a voice on anything that’s going to effect their neighborhood. Not McKee’s neighborhood, not some future suburban families neighborhood, but the hardworking blue collar, middle class, and college educated folks that currently make up these neighborhoods.
Yes, I AGREE WITH YOUR POINT, STEVE, and the City should also have a say in the quality of the residential construction that is built in the TIF area. NOTHING destroys a project more than some slick developer coming in and dazzling potential property owners (many who will be first-time buyers, just as in the loft market) with glitsy but cheap materials, poor workmanship and substandard construction methods. Critics will say this is NOT the role of government. But with TIF money involved, it should be! Just take a look at some of the CRAP that happened on Washington Avenue, and you’ll see what I am referring to!The average homeowner doesn’t know zilch about construction and they are easily impressed with a certain shaped built-in mirror or feature window, or with a doorbell equipped with a presence sensor….and they overlook design oversights and poor material selections that will compromise the usefulness of the house down the road. If it happens, the area will become blighted before it is filled up!
If you have seen the CBS series on Chinese ghost towns you know what happens when something gets built without a real plan. But, in the case of China there was a plan! The plan was to build something big and make it a commodity. People were sold on the idea of a pyramid landscape where the first person, who buys an apartment/condo at $100,000, could later sell for $200,000. The idea was: once 1/2 of the city had been built and the other 50% was reserved the law of supply vs demand would kick in and the values would rise. That was the idea. The reality… something completely different.
Any *regeneration* in St. Louis is good but what McKee offers is not regeneration. His plan is nearly identical to what caused the 5 or 6 Chicago sized ghost towns in China. It is completely based upon theoretical market speculation. When the Northside project is completed there will be 2-300 investors busily trying to pawn their properties off to the next sucker who is then as unaware of the situation as they themselves were 5-10 years earlier.
You can put in Dollar Generals even upscale brands like Starbucks and Lord & Taylor – it doesn’t matter because people will not be buying anything there as a residence. Sure, some may decide to live there or simply have to because they are fully vested, but 100% of those who buy in will be there hoping for a financial return. It does not take a genius to calculate the probable trend of St. Louis property valuation north of downtown 10-20 years out. Unless Northside becomes a walled-off, barb wire topped, isolated utopian community it will only add to the existing trend. How so? Because it’s improvement will only make the rest of the (neglected) area look bad. Remember, poor people don’t realize how poor they are until a new Rolls Royce pulls up next to their 30 y/o rusted Caprice Classic.
I understand that funding the police further with tax $’s is taboo. It would lead people to believe that they are living in a police state. But, right now is the worst possible time for splurging tax $’s on the Arch grounds while cutting services to pay for increased policing. That little hat trick will – most definitely – backfire. It is painting over rust. First, people will see through it and it will just look ghetto. Second, it will not last as the rusting will continue. Third, no one gives a flying Fk about the Arch except for tourists and they will not come to an area that is 10 short blocks away from a war zone. It is not the dome on the rock nor is it the wailing wall. It is a public park with an art sculpture that does not have a religious following of self sacrificing followers.
The only thing that will bring this city back is Jobs. People like to expand. They marry, have children and grow to consume more as they… “accumulate wealth”. Neither McKee’s plan, or Slay’s, accommodate such growth. Residential properties and retail businesses are sidewalk goods. They are passable like a mime or some guy selling hotdogs. Either blow down an area large enough for manufacturing or rope the city off, build more office towers and call it a business park.
The existing brain trust around here seems to be convinced that the USA is still living in 1950, that all of our potential competitors around the world are still trying to dig themselves out of WWII leaving us free to build Leave it to Beaver land theme parks. Get a Fking clue folks! The world has caught up to us! We are no longer playing solitaire in the market. St. Louis can not afford to ignore reality any longer. For instance… Twitter, a St. Louis invention, left for San Fransisco for good reasons and it is not coming back. Did Slay even ask Jack Dorsey about the possibility of opening an office here? F no he didn’t. Slay is on rails! He rides on the track of more corporate life support, investments in sticking new names on old stadiums. How did this happen? How did this city get so dumbed down as to accept this sht? By years of living with hand outs and selling little pieces of itself to people just like McKee. People who have no plan and only live to make a name for their own selves before dumping the *agreements* down the road and taking a personal write off.
But hey, who cares? If St. Louis wants to be known as whore city, so be it. Someone will probably still be here in 2040 selling red lamps.
Interesting rant. I agree, we need jobs. I agree, our political system isn’t the best at addressing urban issues. But what’s with your assumption that the current plans can’t “accommodate growth”?! What do you want to see happen? Level the entire area, create super blocks to accommodate single-story warehouses and truck yards? Round up the po’ folks and the gang bangers and sanitize the area? Yes, developers live and die by “speculating”. Yes, we’re shifting to a consumer society. The status quo isn’t working. McKee is willing to take a risk and try something different. If it succeeds, will he make a pile of money? Absolutely! Will the city, especially this part, be “better”? Most likely. Will high crime rates and poor schools doom it? Possibly. The “bones” exist here – walkable streets, public transit, city services – why not build on them? Don’t tell me why it won’t work, tell me how to make it work, how to make it better!
What about the massive clean up that needs to be done on the property where the infamous Pruitt-Igoe Public Housing Project once stood. A chemical mixture of zinc cadmium sulfide and a radioactive materal was sprayed over the community years ago, and as a result many of the residents have either died or is now suffering with various forms of cancer, tumors, birth defects and lung disease. The soil on that property is toxic. Before the Northside Regeneration Project moves forward let’s find out about the planned cleanup by the developer, Mr. Paul McKee, for THIS particular property.