Sale Of McNair Building, Eminent Domain Discussed Monday Night

UNIVERSITY CITY, MO — The University City School District has been in talks for almost a year to sell the Ronald E. McNair administration building to Novus Development, the company working to build a large shopping center in the city's third ward, near the intersection of Olive Boulevard and Interstate 170. The negotiations were made public at a joint study session of the city council and school board Monday night.

The developer says the property is necessary to relocate the Torah Prep Girls School, which currently sits in the middle of the planned development. School Board Vice President Kristine Hendrix said no decisions have been made regarding the sale of McNair, but the developer made it clear the the entire project would be threatened if the sale doesn't go through.

"In order for us to purchase [the Torah Prep] site, we have to find them an alternative site that works for them," said Novus director of leasing Michael Koch. "I think, as you know, where the McNair building sits is right there centrally located to their attendees and their congregation, so that's a very important strategic location for them."

Asked if the project hinges on the sale of McNair, Koch said, "It's a very very important piece," adding that currently it is the only feasible relocation option. "Does that mean the project is completely dead [if the sale falls through]? I don't know. I can't give a concrete answer to that."

The amount of the developer's offer for the McNair building is protected by a confidentiality agreement — a fact the city reminded Koch of Monday night — but at least one part includes about 10,000 square feet of rent-free space in a planned 30,000 square-foot office building in the redevelopment area. For the duration of the TIF, the district would pay no base rent, the developer said, but would incur other upkeep costs.

Another make or break piece of property currently belongs to Public Storage. Previously, Novus President Jonathan Browne said he had an assurance from the city council that eminent domain would be used to condemn and seize that parcel of land. Patch has been unable to confirm when that assurance was given or by whom.

The city pledged at the meeting April 30 not to use eminent domain to take property from private residents.

"At no point in time has the city council authorized the use of eminent domain to take away residential property," said Mayor Terry Crow. "That is not our intent."

But, failing to obtain residential homes on Orchard, Richard and Elmore Courts could also endanger the project, according to Koch.

"As far as the residential areas, if we don't get those, is there a project still to be had? I think there is at some level. I think it hinders the revenue — I know it hinders the amount of revenue available for RPAs 2 and 3."

The development, which includes luxury apartments and big box retail stores, would be financed with about $70 million of public money — more than a third of the total cost of the $189.5 million project. About $15 million of public money would be reinvested into the third ward to fix streets, improve lighting and possibly offer residents low-interest home-improvement loans — that's the part Koch said is in danger.

"We are a development company, and we're in the project to hopefully make money, so at some point we would have to sit down with the city and evaluate whether or not it's still a viable project," Koch said.

School Board Director George Lenard expressed skepticism at the apparent certainty of the cost-benefit analysis conducted by PGAV Planners, and said the numbers provided don't show a benefit to the school district past the expiration of the TIF. Based on the numbers, he said, "I don't see the pot of gold."

"It's kind of mind-boggling to me that anyone could go out from 2018 to 2041 — it's a long time — and have precise numbers," Leonard continued. "There are all kinds of variables that we can't possibly — unknown unknowns, right? — between now and 2041. So I would be much more comfortable seeing what the assumptions are in writing and seeing a range of numbers for if the assumptions are off this way or that way."

A spokesperson for PGAV told Leonard the numbers were estimates, not guarantees.

About a hundred citizens attended the meeting. Some expressed concern that the project was both so far along and still so vague. How was the amount of the TIF determined? How will TIF money be spent to improve the third ward? What parcels of land are make or break for the deal? they asked.

As is often the case in U City politics, support for the development seems to be falling largely along partisan lines, with the new mayor and council majority firmly behind the project. Supporters of the ancien regime were generally more skeptical. Each side made itself known in the audience, clapping along whenever they sensed a point had been scored (or muttering disagreement when opponents raised criticisms of the project), while third ward residents were caught in the middle, uncertain of how the project will benefit them and waiting for real answers.

Patricia Washington, who lives in the third ward, said it was disingenuous of the school board to say no decisions have been made on the sale of McNair when negotiations have been going on for almost a year outside of public view. "I have a real problem with trust and transparency," she said.

"The other thing I wanted to discuss — there's a word I heard used often tonight, and that's 'luxury.' Luxury condos, luxury apartments, luxury shops, luxury everything. What about mixed-use? What about the people who are going to be displaced? What about middle income and younger families who are coming into University City, who may not be able to afford luxury. Because University City is pretty pricey right now."

Washington also said she had not seen any discussion of women and minority participation in the development. "I look at everybody on the project, and I don't see very many people who look like me. Not the attorneys, not the bond council, not the insurance, not anybody. I've worked for city government and county government for a long time, and I can promise you, there was never a time when anybody who wanted to do development in St. Louis dared bring a team to the office who did not have minorities and women represented from the beginning. So if that's how we're going to start, it makes me wonder how we're going to end up."

Nevertheless, she said she still has hope the project can improve the third ward. "I think the use of TIFs to spur development is a wonderful thing. I've seen it done very well and I have all trust in our city manager. I believe he wants to do it right," Washington said.

Second ward resident Yvette Liebesman said she supports the project. "There are very few options you can do at a highway interchange," she said. "There used to be a vibrant community there and guess what destroyed it? A highway interchange. Now we can actually get some value out of something that was destroyed a long time ago."

Residents and small business owners who have lived and worked there for decades may take issue with the claim their community has been destroyed. Others are skeptical the project's value is meant for them. "This development will not improve my quality of life," said Charlotte Tatum. "My quality of life is fine. If the City of University City wants to do this development, that's fine, but not at the expense of the third ward residents. We're important too."

Tom Sullivan, a university city resident and local government watchdog, also expressed concerns about the project's transparency. "I would hope the city could provide a timeline of when this all started and who met with who about what," he said. "I was surprised to see this is so far along. [Novus] bought Jeffery Plaza. They have all these homes under contract. Who gave them the green light? Obviously somebody did.

"Also the thing which I think is concerning is this idea that we're not going to tell you who the big box retailer is," Sullivan said. "Is it Costco? Is it Walmart? No one knows."

Some who attended the meeting defended the project's lack of specifics by saying the council wanted to seek citizens' input before setting the proposal in stone, but others weren't buying that argument.

"You already have 66 percent of the property under contract, so I wonder what kind of input you really want here," said University City resident Ellen Bern. "That really concerns me. I hope this isn't going to be rammed down everybody's throats the way it sort of feels."

Read Patch's previous reporting on the proposed Olive development below:

• Mostly White TIF Commission Weighs Fate Of Minority Community
• Councilmember Smotherson Responds To Patch TIF Commission Article
• Olive Development Meeting Scheduled For 6:30 Tonight: Watch Live
• Olive Retail Anchor To Remain Secret Until TIF Is Approved

Another meeting of the TIF commission is planned for Tuesday May 15 at 6:30 p.m. at the Heman Park Community Center. A public hearing will be held May 23 at 7 p.m. at the Mandarin House on Olive Blvd. Follow us on Facebook and sign up for breaking news alerts to be sure you don't miss our coverage.

Note: Patch apologizes for technical difficulties that prevented us from livestreaming the April 30 joint study session.

Photo: Novus leasing director Michael Koch discusses his company's proposed development on Olive Boulevard at a joint study session April 30. (J. Ryne Danielson/Patch)