ST. LOUIS — The Board of Aldermen on Friday endorsed directing as much as $8 million in subsidies to a proposed health care facility tied to developer Paul McKee after backers of the project negotiated changes with city development officials.
Under the revised plan, which will come up for final approval next week, developers would have to prove by the end of 2021 that they have financing for a larger expansion hospital beyond the initial three-bed facility in order to qualify for all the subsidies. They would also need to complete the expansion facility — described by McKee’s lawyers as a $73 million, 103,000-square-foot hospital with a medical school — by a June 2023 deadline before some of the subsidies are paid.
Last week at an aldermanic committee hearing, an official with the city’s economic development office had said there was no evidence that the second phase was feasible.
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Alderman Joseph Roddy, D-17th Ward, who chairs the committee that considered the measure, said “there would have been a lot of opposition†to it in aldermanic floor debate Friday had the changes not been agreed to by developers. Roddy, however, said he didn’t know what the outcome of the vote would have been.
With the changes added at the request of sponsor Tammika Hubbard, D-5th Ward, aldermen on a voice vote gave the measure preliminary approval.
“I think everyone here recognizes we need to do more development in north ÃÛÑ¿´«Ã½,†said Roddy, who heads the Housing, Urban Development and Zoning Committee. “The concern is we want it properly enforced.... I think this is a very appropriate resolution.â€
The first phase of the project, at Jefferson and Cass avenues, is a three-bed urgent care center that, along with infrastructure improvements, the developers say will cost about $21 million. They wanted to use revenues generated in a 1,500-acre tax increment financing, or TIF, district covering north ÃÛÑ¿´«Ã½ established by the city and McKee’s development company, NorthSide Regeneration, back in 2009. TIFs collect increases in tax revenue and allow developers to use that money to help finance their projects.
Though aldermen approved a 2017 agreement with many of the same terms for the health care project, the project failed to materialize and development deadlines passed.
In the meantime, Mayor Lyda Krewson’s administration last year sought to cancel that 2009 development agreement with NorthSide Regeneration. ÃÛÑ¿´«Ã½ officials cited the lack of progress in the overall project as well as questions about the developer’s use of a now-lapsed state tax credit program that funneled $43 million in credits to NorthSide Regeneration — nearly all the program ever issued.
McKee’s team argued that he made the initial pitch that drew the National Geospatial-Intelligence Agency (NGA) to the area and that he has built a $20 million grocery store and gas station on North Tucker Boulevard, completed this year.
City Hall’s move sparked lawsuits that pitted McKee’s largest creditor, the Bank of Washington, against the city. NorthSide Regeneration’s longtime lawyers at Stone, Leyton & Gershman also represent the Bank of Washington.
Steve Conway, Krewson’s chief of staff, said the amended health care bill is preferable to the version endorsed by the committee and thus the mayor will not oppose it. He stopped short of saying Krewson supports it.
“The bill will get signed,†Conway said.
The agreement would authorize up to $4.6 million in subsidy payments from the larger NorthSide Regeneration TIF, beyond the site of the health care facility. The area is expected to develop when the $1.7 billion NGA campus opens there, which would generate money for the TIF.
The amendment submitted Friday would bar the use of TIF revenues generated from projects beyond the health care site if the development deadlines for the larger hospital aren’t met. Even then, TIF revenue generated from the health care project itself could still be used by the developer.
Hubbard, in brief remarks to the board, said the facility will serve one of the most impoverished areas in the city. She also noted that it will be named after Homer G. Phillips, which also was the name of the hospital that served black ÃÛÑ¿´«Ã½ans from 1937 during segregation until its closing in 1979.
Campaign contributions
Though support was unanimous Friday, the bill was nearly held up in committee last week. Board of Alderman President Lewis Reed appeared at the committee hearing and voted in favor of advancing the bill, which passed 4-3.
At that hearing, when committee chair Roddy indicated he wanted to hold the bill so the developer could negotiate more with city officials, Reed asked that Alderman Jeffrey Boyd be involved in those negotiations.
Both Reed and Boyd have taken thousands of dollars in campaign contributions from McKee lawyer Steve Stone and companies affiliated with Stone in recent years.
A company connected to Stone donated $5,000 to Reed in March. Since 2014, Stone and companies affiliated with him have given Reed a combined $22,000.
Boyd’s campaign chest has received $10,000 from Stone and companies affiliated with him in that time, including $4,000 this year. He also received $250 this year from U.S. Rep. William Lacy Clay’s leadership political action committee, which is based out of Stone’s office. Another $250 came from Darryl Piggee, Clay’s former chief of staff and now a lawyer at Stone, Leyton & Gershman.
Clay has been a supporter of McKee’s NorthSide Regeneration plans and criticized the city when it was considering severing ties with the developer.
Stone, through his companies, is a frequent contributor to politicians, including tens of thousands of dollars contributed to Steve Stenger, the disgraced former ÃÛÑ¿´«Ã½ County executive.
Stone declined to comment. Reed’s office also did not have a comment. Boyd said contributions have “absolutely nothing†to do with his support and that “north ÃÛÑ¿´«Ã½ deserves an urgent care center, they deserve a hospital.†No one else is proposing any projects, he said.
As for Reed’s asking that he be involved in the health care facility, Boyd said: “I think the fact that I’m a senior alderman, that I probably have more development experience than anybody at the board, except Roddy, that that’s probably appropriate. And notice that I didn’t ask for it.â€
He added: “And I’m offended that you would call me and ask me if (contributions) had anything to do with it.â€
