NorthSide Details Not Yet Public
A home on the 2300 block of Mullanphy. Photo by Audrey Spalding.
SAINT LOUIS — A much-debated $8 billion development in the city of Saint Louis’ north side has been awarded $19.6 million in state tax credits. Those are in addition to city tax incentives, which could total up to $398 million.
The state’s Department of Economic Development has made public only a small portion of the development company’s application for the state tax credits. You can read those four cover pages here.
According to the cover pages, NorthSide Regeneration LLC has spent about $25 million to purchase property, and expects to spend $66 million to acquire additional properties. The company spends about $415,000 each year to maintain its properties, and interest costs are estimated to be about $1 million each year.
The rest of the application, department spokesman John Fougere said, is so large that it isn’t feasible to send it electronically. The remainder will be made available in a few days, he said, but only in the department’s Jefferson City office, where people can view and copy the additional documents.
Documents that haven’t been made available to the public yet include a breakdown of property acquisition costs, interest costs, a map of the development area showing where NorthSide-acquired properties are located, and a list of owner-occupied residences in the development footprint.
Those application documents could shed light on as-yet unanswered questions, such as where within the development area NorthSide has acquired most of its properties, and what it has paid so far to purchase properties. Records kept with the city’s Recorder of Deeds office are unclear — according to deeds of trust filed with the office, properties acquired by the developer were traded among various shell companies.
More interesting is the $66 million NorthSide says it plans to spend acquiring additional properties. Previously, Paul Puricelli, a lawyer for NorthSide, has said that the company has about 20 properties left to acquire, which, if true, would mean a much higher purchase price for the remaining properties.
CHALLENGES TO THE STATE TAX CREDITS
The $19.6 million in state tax credits are authorized by the Distressed Area Land Assemblage (DALA) Tax Credit Act, which allows large-scale developers in urban areas to collect up to $20 million each year in reimbursements for 50 percent of property acquisition costs and 100 percent of interest costs.
Two active critics of the development, Barbara Manzara and Keith Marquard, are the plaintiffs in a lawsuit that claims that the act is unconstitutional. From the lawsuit: “… the state provides public credit to prospective applicants to secure and pay for private investments, private property and does not serve a primarily public purpose because a direct private benefit is derived by the borrowers and investors to the detriment of the state.”
Paul McKee, the developer who put forward the north side redevelopment project, has repeatedly pointed to the dismal education, vacancy, and employment statistics in the area as evidence that development is needed, and will improve the area.
The lawsuit is set to be heard in Cole County Circuit Court on Jan. 27.