A very interesting article from the St Louis Business Journal

In “McKee Out At Winghaven Country Club,” an article from the St Louis Business Journal dated Wednesday, November 24^th by Evan Binns, we are told that Paul McKee Jr. has walked away from his ownership stake in the Winghaven Country Club.  We are also told that he has stepped down as managing partner of something called Spa at Winghaven and is now a non-paying partner while the rest of the partners continue to contribute cash.  The article also mentions that Mr. McKee is being sued for a $28.4 million dollar loan balance he continues not to pay.  This loan is for part of his Hazelwood Logistics Center project. 

Nice.  These businesses have all existed for years and are not new start-ups.  None of these businesses were making money.  Businesses that make money can pay their expenses and distribute dividends to the partners instead of the partners paying in.  The owners of these businesses have had to contribute cash and probably on a regular basis in order to keep the lights on, pay employees, and pay the bank loans. 

So who do we find was the manager of all these businesses?  Why Paul McKee, Jr. of course.  This is very consistent with what we have observed.  Little cracks in the McKee/McEagle edifice have been appearing for a long time now.

Way back when we first started looking into the TIF application for the Northside Project, we noticed that there were some loans against the property owned by all the little partnerships Mr. McKee had set up to buy property in our neighborhoods.  We also noticed that some of these loans were from a failed bank called Cornbelt Bank and Trust of Pitsfield, IL.  The funny thing about this is that the public records of the loans, the deeds of trust filed with the recorder’s office, all still listed Cornbelt as the lienholder even though it had been over six months since that bank had been seized by the FDIC.  In addition the total maximum value of all the loans was only $14.8 million.

That’s important because before the FDIC ever seizes a failed bank, it lines up a new owner.  That new owner basically buys the failed bank from the FDIC but without any of the bad loans that made that bank fail.  The new bank that bought Cornbelt and its performing loans did not get Mr. McKee’s loans.  Therefore our conclusion was that Mr. McKee’s loans were not good loans.  That means he was not paying as agreed.  At the very least, he was paying less than what he was supposed to, and future payments were sufficiently in question that the new bank didn’t want these loans.    

For him to not be paying as agreed on loans that were secured by property he had to have for a huge $8.1 billion dollar project he was proposing told us that there had to be other banks he wasn’t paying.  What idiot would jeopardize a huge project like that over a mere $14.8 million set of loans unless he absolutely couldn’t pay?  At the time, Mr. McKee seemed to be a very wealthy and smart guy so we figured he couldn’t be doing this because he was an idiot.    

It seems that our suspicions have been very much confirmed since then.  Mr. McKee had real money problems and is possibly insolvent or on the verge of bankruptcy.     

Now if us ordinary citizens could figure this out way back when the Northside Project was proposed, why couldn’t the smart people running the City of St Louis figure this out?  After all, it’s only a short walk down from the Mayor’s office to the Recorder of Deeds office.  An easy and short investigation could have clued them in that they needed more than Mr. McKee’s word that he was financially capable of doing this project.   

No one in city government did any investigation of Mr. McKee's finances.  That's clear from testimony in the trial.  You don't authorize an $8.1 billion project and not investigate the finances of your business partner.  So the question becomes why didn't they investigate?  Were they incompetent and didn't think they needed to investigate, or were they helping to hide Mr. McKee's money problems to get the Northside Project approved?

The need for legal funding

As everyone knows, legal work is not cheap.  That is why we've set up this web page with the link for donations.

As most of you probably know, the St. Louis City ordinances authorizing the $400 MM TIF and the possible use of eminent domain for real estate developer Paul McKee, Jr. and his company Northside Regeneration LLC were struck down.  The ordinances were ruled defective under the state statute that authorizes the creation of TIF and redevelopment districts.  For now, the ordinances are null and void. 

Defending the original ruling falls onto the shoulders of whomever won at the trial level.  In this case that is the original plaintiff and the later plantiffs who joined the suit. 

Our aim is to raise approximately $20,000 to help fund the efforts to defend the invalidation of the ordinances and to cross-appeal parts of the ruling the plaintiffs disagree with.  We have already raised about 10% of the funds needed but we still have a long way to go.  Please consider donating what you can. 

Thank you,
Keith A. Marquard
Treasurer
Northside Community Benefits Alliance
   

A Good Meeting at Vashon

We had a meeting, after a bit of a hiatus, on Monday night at Vashon High School. Despite the downpour, we had pretty good attendance--we flyered, and were happy to see some new faces. Though we hadn't met many of these folks before, they were more than familiar with the issues facing North Side residents in light of the NorthSide Regeneration development. It was brought up in the meeting that land acqusitions are occuring in The Ville, with buy-up patterns are similar to those that occurred in the early days before developer Paul McKee was unveiled as the face behind "Blairmont." The new people brought some great ideas with them, and we have several who have agreed to help flyer or talk to neighbors in order to raise awareness of the threat of eminent domain in North St. Louis.

North Side Community Benefits Alliance organized in 2009 to advocate for and educate the people of the City of St Louis about real estate development issues in general, community benefits agreements, and eminent domain. This was in response to an $8.1 billion development proposal for a 2.5 square mile area of North St. Louis by Paul McKee, Jr. and his companies McEagle and Northside Regeneration LLC and 32 other companies he used to hide and refinance his purchases. We felt at the time, and still do, that the best interests of our fellow citizens and neighbors were not being taken into account by either the St Louis City politicians who ostensibly represent us, or Mr. McKee and his companies. In 2009, upon the passage of the ordinances giving Mr. McKee his TIF district and Redevelopment agreement for this area, several area residents who are also members of our organization filed suit in state court on the grounds that the ordinances did not conform to Missouri State Law. Another plaintiff filed suit sought to intervene in our case and their cause was joined with ours. In July of 2010 we received a favorable ruling. In effect, we won at the trial level. The ordinances have been invalidated.

Paul McKee and the mayor of the City of St Louis are currently appealing this ruling. We have filed in opposition to their appeal. (To see the St. Louis Post-Dispatch's coverage of the legal proceedings, click here.) We feel we will prevail, but legal efforts cost money. Up until this point, members of our organization have been funding these efforts on their own. This has been a long and exhausting fight for us and we are reaching an end to our resources.

To defend the trial court ruling and make our challenges on points we did not win, we estimate that we need to raise approximately $20,000 to cover legal fees, court costs, and attorney fees. Our treasurer, Keith Marquard, has committed to fund $2,000 toward this appeal, about 10% of our projected legal fees. This is on top of the many thousands of dollars and hundreds of hours that we and others similarly outraged by this injustice have already spent in our efforts to defeat it.

We very much need the financial help of the supporters of property rights, enemies of eminent domain for private gain, residents of the area, and opponents of government interference in private markets. This is why we are seeking your help. Even if you can’t donate funds to our cause, please send any good wishes you may have for our success. This has been a long and emotionally exhausting fight.

We are working on getting our PayPal button operational on this blog, so that donations may be made to our legal battle as it moves to the state level. We will also be having another meeting in early December, time and date TBA. If you are interested in attending, please email us at info@northsidecba.org for more information.