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Construction yet to begin on North Side Project, Senate standing in the way

  

NORTH ST. LOUIS – All the principal players in the North Side project are eager to see construction begin, especially the people who live and work around the area. You just have to look at the neighborhood to see why.

As you exit the highway onto St. Louis Ave., just on the left is a butterfly garden. It’s really not much of a garden. It’s more like a patch of grass with carefully made, but simple metal butterfly sculptures. Behind it, there’s a building whose back end has collapsed into a splintered mess of rotted wood and shingles. It looks like it was hit by a rocket, but the decay was a product of decades of neglect.

You go up a little farther. This is the area where redevelopment has already begun, as evident by a few bustling businesses at the corner of St. Louis Ave. and 14th Street. At noon on Friday, The Crown Candy Company has a line out of the door. The Crown Candy Company was founded in 1913. It’s a historic company, a time capsule for a forgotten age.

You stand left from the corner door of the shop and look southwest; there is another building – its roof collapsing into a V.

La Mancha Coffee Shop is across the street. Veronica Holden owns the place that had steady business on Friday. Fellow business owners know she is active in the community, having a stake in the success of Old St. Louis as a neighborhood.

“We’ve been cautious with the realistic-ness of the project,” she said of the North Side plan.

DeMarco “Coco” Reynolds owns a well-kept and established barbershop on 14th Street called Head Hunters.

“I’m definitely seeing a lot more prominent people in the neighborhood,” Reynolds said. “Since construction ended on that side there’s been a lot more traffic, a lot more police presence.”

Seth Turner owns Kennedy’s Pet Shop a couple doors down on 14th Street. He’s a new business owner, just 25 years old. He’s had some success and media exposure because of the unique nature of his business as a one-stop shop for pet services: dog walking, grooming, doggie daycare, and selling food.

“There’s no other pet stores catering to urban pet owners,” he said.

Turner grew up in North St. Louis with a single mother. As he talks, he points to a man walking gingerly across the street, tiny steps. He’s wearing an old St. Louis Rams coat. Turner says the man does odd jobs around the neighborhood, like taking out trash.

Turner saw the man take these mincing steps every day for a long time. One day, he asked the man what size shoe he wore. Turner knew the man’s feet hurt, the agony stretched across his face. He was wearing size 7s. Turner gave him an old pair of his shoes, 10s, which fit comfortably.

The median household income in the area is $10,491.

On one block north of 14th Street, nearly every house has been boarded up and abandoned.

“They’ve been looking at it look like this for so long,” Turner said.

This entire area is outside of what has been proposed in the 1,500 square feet of the North Side project. The boundary starts a few blocks west at North Florissant Road. Inside that boundary, the number of abandoned homes goes up. About 70 percent of the homes in the area are abandoned. Only 9,800 people live in the entire area.

Still, driving down St. Louis Ave., a block west of Florissant, there are a number of beautiful homes. There is architecture in the style of the early 1900s, elaborate and elegant archways over doors, high ceilings, and detailed stonework. Sprinkled in are more abandoned homes, plywood blocking lower doors and windows. The windows upstairs smashed in.

Paul McKee is the principal developer in the North Side project. He’s been buying properties in the area for 11 years.

His grandparents lived on North Market Street, the former home just beyond the western border of the project area past Grand Boulevard. Nowadays, North Market Street is not family friendly. On one block there are abandoned warehouses – one in the dark red brick motif of the area and the other a dingy yellow, faded over the years into the color of dirty teeth.

Chief of Staff for Mayor Francis Slay, Jeff Rainford, kept using one word over and over to describe the area: disinvested.

Governmental policies, mostly from the city of St. Louis, kept North St. Louis from being developed because that’s where black people lived. In 1916, city voters passed an ordinance barring blacks from owning homes in areas that were more than 75 percent white.

Preemptive zoning laws kept the Federal Housing Act of 1937 from applying to North St. Louis. In 1963, African-Americans made up approximately two-thirds of St. Louis’ unemployment rate and citizens began to boycott area businesses. Decades later, unemployment remains twice as high for blacks as for whites. North St. Louis was declared blighted by the city in 1951.

As a result, the roads, sidewalks and curbs in the neighborhood are all in disrepair. There is not one foot of fiber in the area, making internet access nearly nonexistent.

“It’s hard to reverse 50 years of disinvestment overnight,” Rainford said.

Reynolds believes Old North St. Louis can become a new Delmar Loop. He thinks it’s just a few major franchises away. While the area around the Loop in University City has crime and struggling schools, North St. Louis is a different breed. The Loop always had Washington University, which keeps young professionals and academics moving in and out.

Sen. Jamilah Nasheed

Joining Holden, Reynolds and Turner are both worried about the realistic nature of the project. St. Louis Senator Jamilah Nasheed shares their concern. Nasheed grew up in North St. Louis and supports the idea and scope of the project. However, she is just as wary about executing it.

“In order for people to believe, the developers must put a shovel in the ground,” Nasheed said. “It just hasn’t happened yet.”

Holden is hoping for the best and preparing for the worst. She said the properties McKee owns have not been maintained.

“I’m dismayed at the neglect of current properties,” she said. “Nothing’s been holding up mowing grass and tuck pointing buildings so bricks don’t fall down on our children.”

She added, “It would be great if everything happened the way it’s supposed to happen but it looks like another shell game.”

Paul McKee firmly says that the only reason construction has not started is because his company was sued twice.

McKee was taken to court over the purchase of parcels and settled that case in 2012. The Missouri Supreme Court ruled in his favor of McKee, 6-0, in a second case concerning the validity of the TIF agreement with the city. The official starting date of the project is November 2013, which happened to be after the Land Assemblage credit expired.

McKee has invested $32.5 million dollars of his own money in the project. LB Ecklekamp, owner of Washington Bank, has invested another $32.5 million. They have also received tax increment financing credits from the City of St. Louis. The total investment is $105 million, including $45 million in the land assemblage credits McKee has already used for acquisition costs. The credits covered, according to statute, acquisition costs, defined as:

The purchase price for the eligible parcel, costs of environmental assessments, closing costs, real estate brokerage fees, reasonable demolition costs of vacant structures, and reasonable maintenance costs incurred to maintain an acquired eligible parcel for a period of five years after the acquisition of such an eligible parcel.

It’s in the statutes because it was already signed into law in 2007. However, it contained a six-year sunset.

Other developers were able to use the credits before it expired. There was a $2 million project in Joplin. There is also a project planned by Cerner in Kansas City.

Rep. Anne Zerr, R-St. Charles, sponsored HB 1501, which renews the credit under certain parameters. Developers can receive no more than $30 million a year in credits and only 33 percent of the total credits allotted can go to one development.Rep. Anne Zerr

Zerr believed this took care of the complaints many legislators had had about the bill the first time around – specifically that too many credits were going to one project with one developer.

The bill passed out of the house with a 96-54 vote. However, the bill is receiving more staunch opposition in the Senate.

Sen. John Lamping, R-St. Louis County, in general opposes public financing. However, he has told McKee that he would propose an amendment and if that amendment were accepted, he would support the bill, even carry it.

He wants the land assemblage credits to be subject to the appropriations process every year. It’s a move to keep the project from stagnating further. But Lamping also knows that opposition from his colleagues could keep the funds from ever being appropriated.

“They’ve asked the state to put in $45 million into the project already,” Lamping said.

“No one will lend to me if it’s subject to appropriations,” McKee said. “That’s his way of killing tax credits.”

Sen. Brad Lager, R-Maryville, has made tax credits one of his key issues in his final term in office. He said there is a coalition of eight different senators who will strongly oppose the bill. He stresses the credit is wasteful government spending, although he views the project’s end goal as valuable. Unlike Lamping, he does not propose any alternatives.

“We spent $40 million and they have not turned dirt yet,” Lager said. “This goes into the pockets of a handful of people. If we can’t fund schools, why should we do this? The tax payers are not in the development business.”

Zerr feels it is the General Assembly’s obligation to renew the credits.

“We’re not holding up our end of the bargain,” Zerr said. “He’s done all the right things. He’s gathered support from the community. He’s gotten interest from investors. He’s been so flexible.”

The bill currently resides in the Senate Committee on Jobs, Economic Development and Local Government chaired by Sen. Eric Schmitt, R-Glendale, who sponsored the Senate version of the bill. Zerr expects it to be heard this week and passed.

Rainford already expects the bill will not pass both chambers this session.

“This has never been done before in an urban center,” McKee said.

The first phase is $12 million in street and sewer improvements. The plan calls for 259 properties to be demolished and rebuilt. There is a plan for a streetcar system to be connected to the MetroLink.

There are also plans for community centers, schools and commercial buildings. McKee has already contracted with four employers – a tire and construction materials recycler, Good Natured Family Farms grocery store, a sausage and hot dog maker, and an urgent care center.

In total there will be 43,279 construction jobs for the plan and 21,670 permanent jobs.

He said all of the jobs brought in to the area would pay at least $50,000. Included in the agreement with those employers was a stipulation that 25 percent of the jobs brought in will go to North St. Louis residents.

“It takes land to create jobs,” he said.

McKee owns 2,300 parcels of land, about 270 acres – about 75 percent of what he needs. The land assemblage credit is essential because he still has to buy more land to complete this project. That process becomes tenuous without public money behind it. With the nature of a TIF credit, city money is not invested until development starts.

It took 10 years for McKee to build the New Haven development in St. Charles County. The estimated time period for the North Side project is 15 years.

Rainford believes a completed North Side project may take even a little longer. He remembers the revitalization that happened in Soulard and Lafayette Square neighborhoods. Those developments also took a long time.

“My dad lost money in Soulard in the ‘60s,” he said.

Soulard and Lafayette Square are far different than North St. Louis; both communities had a history of success. In North St. Louis, McKee must build from the ground up. Patience will be necessary even after construction begins.

However, the likely stall in the Senate means that residents will continue to wait.