Schmitt settles state tax credit fraud lawsuit against McKee’s NorthSide Regeneration

By on June 3, 2019

From St. Louis Post-Dispatch:  Missouri Attorney General Eric Schmitt’s office has agreed to dismiss a 2018 lawsuit accusing Paul McKee’s NorthSide Regeneration of state tax credit fraud and waived all future claims against the developer for its use of a now-lapsed tax credit program.

The settlement was entered in St. Louis Circuit Court following a status hearing Monday morning.

The lawsuit, filed in 2018 by then-Attorney General Josh Hawley, sought the repayment of $2.62 million in tax credits. The state claimed the credits were issued on property NorthSide later gave back to sellers. In all, the state sought damages worth nearly $7.1 million, according to NorthSide’s attorney.

In its settlement, NorthSide Regeneration agreed to pay the state $323,930.

Under the now-lapsed Missouri Distressed Area Land Assemblage tax credit program, NorthSide was eligible for tax credits worth half the value of property — totaling almost two square miles — it acquired in north St. Louis. NorthSide received $43 million in state tax credits from 2009 through 2013 — nearly all of the $47 million in credits the program issued.

NorthSide does not admit any liability or wrongdoing in its settlement with the state. The state agreed to take no further action against NorthSide for any tax credits it received under the lapsed DALA tax credit program.

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