ST. LOUIS, MO (KTVI) - The NorthSide Regeneration project, aimed at redeveloping 1500 acres of North St. Louis, may have to be finished a developer other than its creator, Paul McKee, according to a consultant to Mayor Francis Slay, because of serious financial questions raised about McKee over the past few days.
It was revealed this week that McKee is two years behind on city property taxes for many of the land and buildings in the footprint of the project. The total owed the city, including penalties and interest is roughly $750 million. By law, the city has to wait one more year before it can take McKee to court.
It was also revealed this week that a Kansas finance company is suing McKee, claiming he is in default on $17.6 million in loans.
That company, Titan Fish Two LLC, is asking the courts to put part of the NorthSide project into receivership, giving the company control over those properties.
Could that kill the project?
Jeff Rainford, Mayor Francis Slay`s former chief of staff, is now serving as a consultant on that project.
Rainford says he believes the NorthSide project will happen, even if McKee loses control of some of the property to Titan Fish Two.
'This particular lender came into see us and said `we understand that if there is no NorthSide Regeneration than we just paid millions of dollars for worthless ground. We want to see it happen and we are going to cooperate with you,`' Rainford said.
The city and state combined granted McKee more than $400 million in tax breaks to make the project happen, but because nothing has happened, Rainford says no taxpayer money has been lost.
McKee`s lawyer issued the following statement on behalf of his client:
Titan Fish Two, LLC recently purchased Northside Regeneration and McEagle Properties paper from another vulture fund. Titan Fish Two has filed a lawsuit seeking the appointment of a receiver over what it claims is its collateral; namely, a small fraction of the land owned and controlled by Northside Regeneration. The vast majority of the Northside Project will be unaffected by this action.
This small part of the Northside redevelopment project is largely vacant or unoccupied property located in North St. Louis, and awaiting redevelopment. The parcels are not income producing property and, as such, Northside does not understand the legal or factual basis for Titan Fish Two`s request for a receiver—a remedy normally reserved for the protection or preservation of revenue producing real estate or businesses. In short, there is nothing for a
receiver to do as far as this property is concerned. Northside believes that this suit was brought simply to embarrass Northside or perhaps to gain some sort of perceived advantage in negotiating Titan Fish Two`s claims under its paper.
Northside has a number of defenses to the claims, including a dispute over the amount allegedly owed, which Northside will present at the appropriate time. However, despite the affront of this litigation, Northside will work with Titan Fish Two to assure that current development opportunities in the City are not lost because of the parties` differences.
Northside Regeneration is no stranger to challenges. Northside will address this matter with the same tenacity and determination that proved successful in prior litigation.