Responding to a lawsuit from Paul McKee lender The Bank of Washington, a St. Louis economic development arm is asking a judge to declare it has clear title to the land it is preparing for the future western headquarters of the National Geospatial-Intelligence Agency.
A lawsuit filed this month in Franklin County Circuit Court by the bank, McKee’s NorthSide Regeneration lender, is asking a judge to reinstate its liens on the NGA properties. It had released its liens as part of a deal to sell the land struck with the city’s economic development agencies in January 2016.
Otis Williams, the head of the city’s economic development office, said there was no risk to t because of the bank’s lawsuit.
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He noted that entities his office ran owned the land free and clear and that the petition they filed Friday was one option among several to quell any attempts to impair the land’s title.
Though the city’s Land Clearance for Redevelopment Authority Holdings Corporation, staffed by the city’s economic development arm, has spent roughly $119 million acquiring property and cleaning and grading the land, it has yet to hand over the site to the federal government. It had been planning to finish site preparation and transfer the land by the end of this year.
LCRAH filed the petition Friday in St. Louis Circuit Court to clear up any questions about the title. The entity was established in part to manage and assemble the 97 acres where the NGA plans to build a replacement campus for the intelligence agency’s current western headquarters on the south Mississippi River frontage.
It acquired 337 parcels, or about 38 acres, of the potential NGA site from McKee’s NorthSide Regeneration, according to the petition. The petition notes that McKee had acquired almost all of that land from the city’s land bank in 2012.
As part of the deal, the city’s economic development agencies agreed to pay the bank some $5.4 million — including $2 million to be paid when the city closes with the NGA — along with property liens from other McKee loans the city had paid a vulture fund $7 million to acquire.
But a legal battle between the developer and the city over his NorthSide Regeneration company’s development rights to some 1,500 acres of north city real estate started in June, when the city decided to try to void its development agreement with McKee’s NorthSide. It accused the developer of missing development deadlines, and the action came in the wake of questions over McKee’s use of $43 million in state tax credits issued for his land assemblage activities in north St. Louis.
That triggered the Bank of Washington’s lawsuit seeking to reinstate its liens on the NGA site.
Bank of Washington accuses the city’s economic development agencies of failing to negotiate in good faith a new development agreement between McKee and the city proper. The development agencies had promised to work toward a new development agreement in a separate “future assurances agreement†with McKee and his lender.
McKee and the bank’s lawyers accuse the city of wanting to void McKee’s development rights to make way for unnamed developers cozy with the city’s economic development office now that the NGA project is happening.
But the city’s economic development office, in a separate written response to NorthSide Regeneration and its lawyers, countered that it had referred developers to NorthSide. Those developers have cited “exorbitant sales prices,†and negotiations have failed, Friday’s letter from Gerard Carmody, a Carmody MacDonald lawyer representing LCRAH, said.
The letter also says that it has tried to renegotiate the development agreement and that NorthSide Regeneration could have submitted a revised agreement to the city commission that would have had to first vet it.
“In addition, NorthSide never agreed to a revised form of a Redevelopment Agreement that stood any realistic chance of being approved by the City and the Board of Aldermen,†the letter says.