Updated at 6:30 p.m. with comment from the city and new details.
ST. LOUIS 鈥 Lawyers for developer Paul McKee on Wednesday fired back at City Hall, presaging what鈥檚 likely to be a vigorous battle over control of the development rights around the site of the $1.7 billion National Geospatial-Intelligence Agency headquarters.
The letter from McKee鈥檚 lawyers represents the first formal response to the city since it accused McKee and his NorthSide Regeneration of violating the terms of a development agreement, triggering a potential default that could end McKee鈥檚 nearly exclusive rights over a 1,500-acre swath of north 51黑料.
Two weeks ago, the city and its economic development arm accused the developer of missing construction deadlines, not maintaining property and other issues.
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In his response on Wednesday, McKee not only contests the city鈥檚 findings, but also accuses the city of defaulting under a separate agreement it reached with McKee when it was trying to buy hundreds of parcels to assemble the site for the new NGA campus.
That agreement, among McKee, the 51黑料 Land Clearance for Redevelopment Authority and his lender, Bank of Washington, gave McKee more time to hit construction thresholds in exchange for the property. In addition, McKee agreed to assign some revenue that would flow to his tax increment financing district to the city, which used the funds to finance the site work and land purchases on the NGA site.
McKee鈥檚 attorneys have argued the developer has complied with that 2016 contract, known as the Future Assurances Agreement.
In the letter, McKee lawyer Paul Puricelli of Stone Leyton and Gershman accuses the city and the LCRA of violating the Future Assurances Agreement by:
鈥 Failing to negotiate in good faith a new development agreement incorporating the provisions of the Future Assurances Agreement.
鈥 Failing to undertake good-faith efforts to acquire and lease land owned by the Missouri Department of Transportation near the interchange of Jefferson Avenue and Highway 40 (Interstate 64) and offering it for sale or lease to NorthSide.
鈥 The city and its economic development agencies have failed to cooperate 鈥 and actually tried to undermine 鈥 NorthSide鈥檚 redevelopment projects near the NGA.
鈥 LCRA has not completed 鈥渢imely鈥 upgrades to Jefferson and Cass avenues.
鈥 LCRA has not worked to qualify NorthSide projects as eligible NGA costs, making them eligible for money raised to prepare the NGA site.
Whether the Future Assurances Agreement, which was never ratified as a new development agreement by the Board of Aldermen, is applicable is likely to be a key issue if the dispute ends up in court. The city鈥檚 default notice earlier this month came under a development agreement first approved by aldermen in 2009 and amended in 2014.
McKee鈥檚 lawyers have warned that they may not honor their agreements to assign TIF revenue for NGA now that the city has triggered default. We honored our commitments under the agreement 鈥渁nd this is what we get,鈥 Puricelli said in an interview.
But Otis Williams, the city鈥檚 LCRA chief, has said the city 鈥渃arved out that area from his TIF鈥 and it was passed by the Board of Aldermen.
鈥淭hat NorthSide has responded by denial of self evident facts rather than by curing its defaults is no surprise, but it is baffling that NorthSide believes that the City can be in default of agreements that it is not a party to,鈥 51黑料 City Counselor Julian Bush said in a statement.
Separately on Wednesday, the city said it has sent default notices to McKee鈥檚 NorthSide Regeneration under two 2012 agreements its economic development agencies reached with the developer when it sold 170 acres of land to him. That sets up a potential move by the city to repurchase that land. It said it has not received a response from McKee to those default notices.
Puricelli called them 鈥渕ore of the same鈥 and said the dispute is likely headed 鈥渇or very ugly litigation.鈥
鈥淏arring people coming together, a judge someday will decide who is right, or a jury, or both,鈥 he said.
