As we discussed recently, the city of Saint Louis is looking to buy back land it sold to Paul McKee’s Northside Redevelopment Corporation a few years ago. The city sold publicly owned property cheap (and the state reimbursed much of the cost of private land), with the hope that Northside would follow through on an extensive redevelopment of North Saint Louis City. No such redevelopment has taken place, and the city now wants to buy back the land to give to the National Geospatial-Intelligence Agency, with the hopes of keeping the agency within city limits.
When we discussed the buyback plans last week, we asked whether the city would be able to buy back the land at the price they sold it for, or whether McKee would profit. Now, shockingly, we are learning that McKee indeed intends to profit. The developer expects to receive $17 million for land that he bought for $3 million. That’s a gain of more than 400 percent.
There’s nothing wrong with a developer buying land from the city and selling it back for a profit if the city decides it needs the property back. But in this case, Northside did not just buy land at a fair price; the city sold it a large number of properties at fire sale prices, and the state reimbursed most of the cost of the private land McKee bought. Northside then failed to pay property taxes on nearly all that land. All this special treatment and public support was supposed to come in exchange for new property and business developments, none of which have happened. Far from a property owner getting lucky from a change in government policy, McKee is expecting to profit from a city policy he helped create and for whose failure he is responsible.
The city has not yet decided whether it will pay the price McKee is asking. If it does, I think state taxpayers should be asking if they get back the $3.5 million in state tax credits McKee received to buy those properties. As for the city, I’d sarcastically ask where eminent domain is when you need it.