Lacy Clay defends McKee, says SLDC left North St. Louis ‘to languish’

By on June 12, 2018

From St. Louis Post-Dispatch:  St. Louis’ congressman lashed out at the city’s economic development arm Thursday and defended NorthSide Regeneration developer Paul McKee as “the only person willing to risk his own money to address decades of disinvestment.”

In a commentary published on the St. Louis Business Journal’s website Thursday, U.S. Rep. William Lacy Clay, D-St. Louis, said McKee deserves the credit for the National Geospatial-Intelligence Agency’s decision to build a new $1.7 billion campus in north St. Louis and that “the city came late to the NGA party — and then only at Paul McKee’s invitation and insistence.”

Clay’s comments follow last month’s revelations during an eminent domain trial in St. Louis that McKee had received millions of dollars in Missouri tax credits for transactions the state later flagged as improper. City attorneys argued the transactions from 2011 and 2012 inflated sales prices to maximize the value of tax credits issued to the developer and that the transactions were designed so no money changed hands while still triggering the issuance of state tax credits. McKee later deeded the properties back to the sellers.

While the Missouri Department of Economic Development caught at least one such transaction and clawed back future tax credits that would have been issued to McKee, a longtime official with the agency said it did not claw back $2.5 million in tax credits in a similarly structured transaction. It’s unclear whether there were other, similar transactions that also triggered tax credits.

McKee testified at the trial that there was “no process for paying it back, but I’m more than happy to sit down with the state” and discuss the transactions.

The Department of Economic Development later said it was “very concerned regarding the issues raised during the trial and will be working with the necessary parties to further ensure the protection of taxpayer dollars.” St. Louis Mayor Lyda Krewson called for an internal investigation. An FBI agent watched much of the trial in a St. Louis courtroom last month.

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