ST. LOUIS — Top city leaders on Wednesday yet again extended a key financing deadline on a $20 million, three-bed hospital proposed as part of developer Paul McKee’s sweeping NorthSide Regeneration plan.
NorthSide had until the end of 2019 to prove it could finance the urgent care facility, or it stood to lose $6.42 million in tax subsidies for the project.
Now the controversial developer has until August to close on financing — after a city board made up of top elected leaders voted on Wednesday to give more time to the project at Jefferson and Cass avenues.
McKee won approval for an unprecedented plan in 2009 to rebuild large swaths of 1,500 acres in north St. Louis, where he had purchased hundreds of properties. But, in 2018, with little progress to show, St. Louis Mayor Lyda Krewson canceled NorthSide’s development agreement. McKee’s legal team — even while fighting Krewson’s move — managed to persuade aldermen in October to approve $6.42 million in tax increment financing subsidies for the medical facility.
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On Wednesday, the Board of Estimate and Apportionment — made up of Krewson, Board of Aldermen President Lewis Reed and Comptroller Darlene Green — approved giving NorthSide until August 20 to close on financing and until the end of September 2021 to complete the project.
Green said she felt the revised agreement extending the project deadlines constituted “substantial†changes and should be sent to back to aldermen. She abstained from voting on it.
Krewson and Reed, however, pointed to widespread support at the Board of Aldermen, which backed the project 23-2 last fall. The mayor added that the amended agreement is better: It would exclude new taxes generated by the planned Major League Soccer stadium on Market Street, which will be within the NorthSide TIF footprint, from being diverted to the TIF fund.
Krewson said NorthSide suggested the amendment. “And it was better than what we had,†she said.
The newest concerns arose at a January board meeting of the city’s economic development arm. There, attorneys for NorthSide indicated they couldn’t close on financing until the city signed off on the development agreement. City officials said they were concerned that only $8 million in financing seemed firm — letters from other potential lenders only indicated preliminary interest.
“I think it is unfair to expect our lenders to commit to the project when the city hasn’t committed,†Stone, Leyton & Gershman attorney Joseph Dulle, a lawyer for NorthSide, told the St. Louis Development Corp. board at the January meeting.
The city had approved a previous development agreement, Dulle noted then, on NorthSide’s $20 million GreenLeaf grocery store and gas station on Tucker Boulevard, prior to lenders closing on financing. That was the first major development from NorthSide.
SLDC Director Otis Williams said Wednesday that the revised hospital development agreement was negotiated in “the spirit of cooperation.†City officials feel more comfortable signing the new deal, since it requires McKee to close on financing, instead of simply proving he has backing. At the same time, it allows NorthSide to use the signed agreement to secure lenders. Mark Grimm, an attorney for SLDC, said even if NorthSide had shown evidence it had solid lender commitments, it still takes six months to close on financing so the extension “does not materially change the date.â€
Green said she has been contacted by aldermen concerned about the change and said there would be “ample time†for them to consider it if the developers aren’t expecting to close before August.
Reed, who cast a key committee vote in favor of the TIF last year, said the board, if it had to pass a new version, could take months to get to it. He asked whether the bill’s sponsor, Alderwoman Tammika Hubbard, had contacted Green with concerns.
“For me, if the primary sponsor does not have any problem with these changes ... I would not be willing to send it back to the board just so that a handful of naysayers can have another bite at the apple,†Reed said. “Two or three aldermen from the south side who for whatever reason have no concept of the urgency of health care services north of Delmar, I’m not willing to buy into anything they’re trying to do here.â€
NorthSide’s attorneys have said they plan an eventual expansion of the urgent care with a $73 million medical school and hospital campus, though details are slim. They have said they plan to call the campus Homer G. Phillips Hospital, the name of the hospital built in 1937 that served black St. Louisans during segregation and trained generations of black medical professionals before its 1979 closure.
If NorthSide can finance and complete the three-bed portion on time, it could get a big chunk of TIF revenue up front even if it can’t finance the larger project. Up to $4.6 million in TIF money for the urgent care can come from the larger TIF area — money that isn’t generated by the hospital project itself.
Meanwhile, Green still has to sign off on the amended development agreement. She’s withheld her signature on other projects she didn’t support. Green wasn’t at the Wednesday meeting in person — she called in — and her office said she has not yet indicated whether she would sign the agreement.
