Attorney General Sues Saint Louis Developer For Tax Credit Fraud

ST. LOUIS, MO — Missouri Attorney General Josh Hawley announced he has filed suit against developer Paul McKee for taking more than $4.5 million in tax credits in an alleged fraud scheme.

The allegations first came to light in May, when city attorneys argued McKee bought a downtown building — the old Buster Brown shoe factory — ahead of it being acquired by the city to artificially inflate its price. The site had been proposed as the new western headquarters for the National Geospatial-Intelligence Agency.

In buying up property he would eventually return to the seller, McKee earned tens of millions of dollars in tax credits over about a decade which he did not return when sales fell through.

The city announced plans yesterday to cut ties to McKee over his stalled plan to redevelop about 1,500 acres in the north city. The massive project, it was hoped, would rejuvenate the impoverished area, but critics say McKee pocketed millions of dollars in tax credits for properties he didn't end up buying, and the city seems to have lost faith in his ability to bring the project to fruition.

"It's time to face facts,' the city wrote to McKee Tuesday in a notice of default. "After a decade, the promised redevelopment has not come, nor is there any indication that it will."

The city added that it is time to allow other developers a shot, though McKee still owns large swaths of the land in the redevelopment area. Expect a drawn-out legal battle to ensue.

The Associated Press contributed to this report.

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