ST. LOUIS — Properties affiliated with developer Paul McKee’s NorthSide Regeneration owe more than $1.6 million in back taxes and could be sold at St. Louis tax auctions next year if McKee and his partners don’t pay off the debt before then.
The properties with the largest unpaid tax bills are among the only projects NorthSide has actually built: the now-shuttered Greenleaf Market and a convenience store and gas station on Tucker Boulevard.
For more than 15 years, NorthSide Regeneration has owned hundreds of properties on the near north side of the city, hoping to redevelop the area now anchored by the under-construction National Geospatial-Intelligence Agency.
Last week, the company was hit with dozens of delinquent tax actions, which the St. Louis Collector of Revenue files in state court after property taxes go unpaid for three years.
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The big tax bills are the latest pressure facing the controversial developer.
In December, a St. Louis judge ordered it to repair a historic building at the intersection of Page and Grand boulevards and pay attorney fees for the lawyers who represented the neighborhood association that brought the legal action. And the city recently passed an ordinance allowing it to use eminent domain on much of his real estate, which lies within a key strategic redevelopment area. NorthSide has for years faced criticism for the condition of its properties north of downtown, and the city hopes the plan prompts NorthSide to develop it or sell it to someone who can.
Some officials suspect the land is encumbered by more bank debt than the property is worth, making redevelopment difficult. The city’s use of eminent domain could clear those debts, though state Sen. Nick Schroer, R-Defiance, is pushing a bill that would require the city to also pay off those bank loans if it condemns the land.
However, the largest tax bills facing McKee and his partners are on the Greenleaf Market and the former Zoom gas station across the street.
The gas station, now an Amoco, sits at a prime location close to the Stan Musial Veterans Memorial Bridge into Illinois, where gas is more expensive, and is usually busy. The Greenleaf grocery store has faced problems since the pandemic and is now closed.
The three years of unpaid taxes on Greenleaf, owned by an entity called St. Louis Grocery Real Estate LLC, combined with interest and attorney fees, carry an unpaid balance of $938,000. The gas station, owned by the same limited liability company, owes $690,000 for three years of taxes and accrued interest.
Two large undeveloped tracts of land north of the two stores owe nearly $90,000 for three years of unpaid taxes. Dozens of other smaller properties owned by NorthSide Regeneration owe smaller amounts, sometimes hundreds of dollars and sometimes several thousand.
McKee said in an email that “the necessary payments will be made before any proposed tax sale or sales takes place.â€
He will have nearly a year to do it. While the collector of revenue can’t enter into payment plans with commercial property owners, said office spokeswoman Susan Ryan, those owners can pay off their tax bills incrementally during the 11 months before the tax sale actually takes place. As long as a property owner pays the tax balance before next year’s sale, the real estate won’t go to auction, she said.
The tax foreclosure actions filed this week are part of a process outlined in state law. Many other properties also had suits filed against them. The unpaid tax lawsuits begin in the early months of the year to give notice to owners to pay their bills or have their properties sold for back taxes within a year.
But the tax filings show the extent of NorthSide’s delinquent taxes, with dozens of properties where it hasn’t paid taxes for years. Because the collector waits three years to file a tax foreclosure, it’s not unheard of for developers to wait to pay those amounts until there are three years of outstanding taxes, particularly if they are due on non-income-producing parcels of land.
However, coming up with more than more than $1.6 million could be complicated by both the closure of the grocery store, the potential eminent domain proceedings NorthSide is facing from the city and a big repair and legal bill for the Cass Avenue property.
Another McKee-affiliated development, the new Homer G. Phillips medical clinic at Cass and Jefferson avenues, opened this year, and it could potentially provide some cash to the developer and his partners.
The hospital has applied for a $6.4 million in tax increment financing payments, an incentive city aldermen authorized in 2019, from a tax increment financing district that NorthSide established in 2009.
The city’s development arm recently determined the project complied with its minority contracting rules and authorized the payment, spokeswoman Sara Freetly said. The TIF payments are pending final approval by the St. Louis comptroller’s office. Those TIF notes, or promises of future TIF payouts, could help NorthSide raise the capital it needs to pay obligations such as its tax bills.
In any case, when McKee ultimately pays the taxes, much of that money will go back into the TIF fund. And some of that could go to the hospital payment, essentially reimbursing the developer for the tax payments.
View life in St. Louis through the Post-Dispatch photographers' lenses. Edited by Jenna Jones.