The Missouri Supreme Court heard arguments today over the constitutionality of a state tax credit which has enabled St. Louis developer Paul McKee to buy up several tracts of land on the city’s north side.
McKee has so far received $28 million in tax credits for his NorthSide development project.
Attorney Irene Smith represents the plaintiffs, St. Louis residents Barbara Manzara and Keith Marquard. She told the High Court that giving state tax dollars to private business interests violates the State Constitution.
“It’s a tax credit for accumulating land," Smith said. "And as best as I can determine, there is no case authority in the state of Missouri (that says) accumulating land in a distressed area is in the public interest.”
State Solicitor Jim Layton argued that the state’s Distressed Areas Land Assemblage Tax Credit doesn’t transfer any public money to private entities, that it only reduces the recipient’s tax burden.
Paul Puricelli, McKee’s attorney, also told the court that the incentive doesn't violate the ban on public money going to private interests.
“The statute was carefully drafted to make sure that any money generated through the use or sale of these tax credits goes back into, in this case, to the city of St. Louis and to the north side.”
Smith also argued that McKee has used the tax credit to accumulate land and let it sit undeveloped, in order to drive down property values and acquire more land. Puricelli called the allegation preposterous.
A lower court ruled that Missouri taxpayers don’t have the legal standing to challenge how state incentives are spent. The State Supreme Court will make its decision at a later date.
