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McKee lines up five homebuilders

By Tim Logan      tlogan@post-dispatch.com      314-340-8291

ST. LOUIS  •  In what may be the closest thing to progress yet in his decades-long bid to rebuild much of the city’s near north side, developer Paul McKee said this week that he has reached agreements with five home builders to construct housing for his NorthSide Regeneration project.
 
Paul McKee
Paul J. McKee, Jr., of McEagle Properties, LLC, interviews with St. Louis Post-Dispatch reporters near the intersection of Pine St. and N. 23rd St. in downtown St. louis late Tuesday, December 6, 2011. Photo by Erik M. Lunsford elunsford@post-dispatch.com

 

McKee and the quintet of builders have plans for 79 homes – mostly new construction – on a few rebuilt blocks along St. Louis Avenue, just west of North Florissant Avenue, in the city’s St. Louis Place neighborhood. It’s intended to be the first phase of residential construction that will grow as – and if – McKee’s vast vision becomes reality.

The progress is fragile. Previous plans to launch NorthSide – like one to rehab the Clemens House mansion on Cass Avenue – have become false starts. At roughly $200 million, the five blocks of housing would be the largest development McKee has yet announced in the 1,500-acre footprint north of downtown since he started buying land there eight years ago.

But all McKee’s plans hinge on the fate of NorthSide’s $390 million in public subsidies, in the form of a tax increment financing package that will go before the Missouri Supreme Court next month.

McKee selected the builders – Fischer & Frichtel, Rolwes Co., Rubicon-Bruno Homes, X3 Design Build and Gateway Development – in a competitive process earlier this year. They are a mix of companies with experience in new and rehabbed homes in both suburban and city neighborhoods. But they say they are planning on building “urban-style” homes on what are now mostly vacant blocks between 20th Street and North Florissant Avenue – land McKee bought quietly over several years, then combined with a massive purchase of city-owned land earlier this year. Some existing, occupied homes will remain there.

Several of the developers said they were attracted by the chance to be part of starting something new in the battered neighborhood, and by the prospect of a large-scale redevelopment. McKee’s plan ultimately proposes thousands of new homes and vast swaths of new office, industrial and retail space across the area.

“I’ve seen so many plans come and go in the city of St. Louis,” said Jerry Meyer, director of development at Rubicon-Bruno. “This is the first one I’ve seen that addresses education, infrastructure, jobs and housing. We can create another real option for people here.”

“This area needs life,” said X3’s Kevin Logan. “It’s a great opportunity for us to participate in that.”

Pricing is still being worked out, but it’s likely these homes will cost far less than the $400,000 average price estimated in McKee’s 2009 TIF application. Greg Sommerhof, a Wentzville builder who is working on market analysis, says he sees a strong target market in teachers and city police and firefighters. He held focus groups with all three groups, and found a lot of interest in quality new construction in the city.

“Overwhelmingly, people found it attractive,” he said. “Security concerns were holding them back. If we can provide that, we’ll have a great start.”

The developers also have got a lead on financing. St. Louis Community Credit Union has agreed to lend to buyers in the project, said credit union spokesman Michael O’Brien.

McKee-1.jpgMcKee-2.jpgMcKee-McEagle.jpg

“Hopefully the opportunity will come to fruition,” he said. “We’re a locally owned credit union. Our focus is primarily the city. So it’s a natural for us.”

McKee said he could start construction in the spring. But of course, all of this depends on NorthSide’s giant subsidy, which has been in legal limbo since a circuit court judge ruled in July 2010 that it was vague and overbroad.

The TIF would generate about $390 million for streets and new sewers and other infrastructure across the two-square-mile area, money McKee says he needs to get his project done. Upgrading infrastructure for this patch of housing alone would cost $2 million, he said.

McKee has been trying to access that money for two years now, first proposing more specifics to allay Judge Robert Dierker’s concerns, then bringing the case to state Appeals Court, which in June passed it up to the Missouri Supreme Court. Oral arguments there are scheduled for Nov. 28, with a ruling likely several weeks after.

“If that doesn’t go our way,” McKee said, “We’re dead.”

 

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