The city of St. Louis is a step closer to getting a $20 million loan to help it buy land at the proposed National Geospatial-Intelligence Agency site on the north side.
The Board of Aldermen’s Housing, Urban Development and Zoning committee voted for the measure 5- 4 on Friday. Yet some committee members expressed concern about paying the area’s largest land owner, developer Paul McKee, for the property.
McKee owns more than half of the land within the proposed footprint and bought more than 260 parcels directly from the city, as St. Louis Public Radio has reported in the past.
"I don’t like the idea that we owned the land; that we sold it to somebody, and now we’re forced to take a loan to buy it back from them," said 21st Ward Alderman Antonio French, who voted against the loan.
Cara Spencer, the alderwoman from the 21st Ward, said she wants to see the NGA and its 3,100 employees stay in the city. But Spencer asked the mayor’s office for a commitment that McKee will not profit from the sale of the land, before she voted for the measure.
"What I don’t want to see is any of this $20 million going in the form of profits to a single developer on a the north side that has assembled 342 properties and stands to profit off this," she said.
Mayor Slay’s chief of staff Mary Ellen Ponder responded that the city would work to get the best deal possible.
"We’ll do everything we possibly can and use every tool that we have to be as responsible as we can with the taxpayers’ dollars," she said.
The Board of Aldermen previously approved the use of eminent domain within the footprint, and Ponder emphasized the city is prepared to use every tool at its disposal.
St. Louis Development Corporation’s executive director Otis Williams previously said the city would take into consideration the purchase price McKee paid for city land, as well as state tax credits he received. McKee got $3.5 million in Distressed Areas Land Assemblage Tax Credits for 91 parcels in the NGA footprint.
McKee spokesman Jim Gradl provided this statement earlier when asked by St. Louis Public Radio asked about what the developer is expecting for the land:
"The price being discussed is the same price offered directly to the NGA 18 months ago--before the city got involved and before the NGA narrowed the many sites under consideration down to four," Gradl said in an emailed statement. "It was a price designed to attract the NGA to the site."
The city's loan deal
The $20 million loan, which now goes before the full board, could use as many as three city-owned properties for collateral. The city plans to refinance 1520 Market Street and fold the $7.8 million still owed on that building into the new loan, leaving $13 million available for buying the north side land. The bill also includes city buildings at 1415 N. 13th Street and 1900 Hampton Avenue as possible collateral.
A Stifel financial advisor broke down a cost benefit analysis of the NGA project on Friday after several members asked for one at a meeting earlier in the week. Director of Public Finance Peter Czajkowski said the expected cost of providing a clear site for the NGA would be about $120 million. (Stifel is part of a consortium offering the city the loan, along with Pulaski Bank and Enterprise.)
Czajkowski also said the city currently brings in about $5 million a year from NGA’s employees. About 400 of the 3,100 NGA employees live in the city and now pay property and sales taxes. All of NGA employees pay the city’s earnings tax for about $2.4 million each year.
"This is a really 'but for' test, in fact it may be the easiest 'but for' test you’ll ever see," he said, referring to language commonly used to assess whether economic development is needed. "Because we know the federal facility is going to move this agency. Their facility is outdated; the competition between the four sites is real."
The plan for paying back the loan is to use funds from the sale of the site to the NGA. If the NGA goes elsewhere, SLDC officials say they will try to sell a portion of the assembled land to another developer.
In the worst-case scenario, officials say the city will have to pay back about $29 million over 20 years.
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