ST. LOUIS, Mo. (KMOV.com) -- Missouri Attorney General Josh Hawley filed suit Wednesday against St. Louis developer Paul McKee’s company, Northside Regeneration.
The suit accuses the company of tax credit fraud and asks the courts for nearly $4.5 million dollars in damages.
“My office will not tolerate the abuse of a state tax credit program designed to revitalize communities,” Hawley wrote, in a statement.
A News 4 Investigation in December revealed that McKee’s company had received a total of $43 million in tax credits from a program designed to boost redevelopment on the city’s north side.
But in letters from the state’s Department of Economic Development, state officials raised questions about the legitimacy of some of the underlying sales transactions on properties which for Northside received the tax credits.
In the suit, the Attorney General points to two properties as evidence of tax credit fraud. The suit alleges that McKee’s company told state officials he had purchased the properties, but either never completed the transaction at all or “unwound” the deal within six months.
Effectively, the Attorney General says was not entitled to the tax credits for the properties and the state, therefore, lost tax review.
The suit says the state is seeking the full amount of the tax credits awarded to those properties, nearly $4.5 million.
“This lawsuit will ensure that any responsible parties are held to account and Missouri dollars are returned where they belong,” Hawley wrote.
News 4 has reached out to a representative for Paul McKee who sent the following statement:The recent events surrounding Northside Regeneration’s redevelopment project—a lawsuit filed by the Missouri Attorney General and the City’s purported termination of NSR’s development rights—are disappointing, but it is telling that these actions come on the heels of NSR’s real progress for the citizens of north St. Louis. It should not be lost on those who are interested that the State and City waited until NSR brought a $1.7 billion federal development project, a grocery store and long needed health care to north St. Louis before deciding to take these actions. NSR understands that others who currently curry governmental favor would now like to capitalize on the opportunities created by NSR. But NSR is confident that Missouri’s courts and citizens will not tolerate such inequity. NSR will respond to the Attorney General’s action in due course, but would like for all to know that any notion that tax credits were misused or did not benefit north St. Louis is false. NSR is confident the claims are without merit and will vigorously defend itself.This is a developing story. Check back for additional details.