State questioned transactions by prominent developer involving millions of tax dollars

Paul McKee (Credit: KMOV)

ST. LOUIS ( -- Tuesday, officials sent a letter to Paul McKee in a move analogous to a divorce filing, after city officials say McKee breached his end of a redevelopment deal.

McKee is a familiar name, especially to residents on the city’s north side.

READ: Paul McKee may have another local project at risk

Well over a decade ago, he started buying up properties. Believing his Northside Regeneration project could help the city, officials entered into a Redevelopment Agreement with him, which allowed him to get financial incentives.

The city has approved close to $400 million in tax increment financing. The state of Missouri has also given McKee $43 million dollars in tax credits for redevelopment.

A News 4 Investigation from December revealed concerns, though, about the legitimacy of some transactions for which McKee's entities received the tax credits. And a public trial in May raised even more questions.

Leaders say that only one project, a planned grocery store and gas station, has ever broken ground.

READ: More questions surround developer Paul McKee

In a letter filed Tuesday, city officials say it’s time to face facts.

“After a decade, the promised redevelopment has not come, nor is there any indication that it will,” the letter states.

"Land lies fallow. Taxes go unpaid. Vacant buildings remain dangerous and unsecured....these are not the results the City bargained for when it granted Northside redevelopment rights for the Area," the letter reads.

The letter says that McKee and his entities have failed to fulfill numerous promises to the City and claims that McKee is in default.

Among the promises broken, the city points to: Questions about the legitimacy of transactions by which McKee received tax credits Failures to pay taxes Failures to maintain properties Failures to demolish propertiesAttorneys for McKee have adamantly denied doing anything wrong. McKee says that without his redevelopment efforts, the city would not have been able to secure the location for a new headquarters of the National Geospatial Agency.

City officials acknowledged Tuesday that McKee played a role in identifying and applying for the NGA opportunity, but officials say "he has shown he did not and does not have the resources to pull the project off."

This is a developing story, check back for additional details.

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