ST. LOUIS — The city is taking the next step in using eminent domain to take possession of dozens of properties owned by Paul McKee's NorthSide Regeneration — and says it will begin the legal process against more properties this week.

The St. Louis Land Clearance for Redevelopment Authority on Friday sent $1 million in offer letters to the owners of 87 properties north of downtown. Such letters need to be issued before a government starts condemnation proceedings against property owners.

Deion Broxton, a spokesman for the LCRA and its parent agency, the St. Louis Development Corporation, said LCRA intends to initiate the eminent domain process against 59 additional properties in the St. Louis Place and Jeff-Vander-Lou neighborhoods.

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Nearly all of the 146 properties are owned by NorthSide Regeneration.

“As a North City native, this is the kind of action we are forced to take to spur economic development for the residents in these neighborhoods,” SLDC President and CEO Neal Richardson said in a statement.

But a lawyer for NorthSide, Paul Puricelli, fired back, saying SLDC had demonstrated it couldn't administer federal pandemic money via a north St. Louis grant program and that it shouldn't take on more responsibility, given those issues.

"Respectfully, this is not the time for SLDC to add 80 parcels of real estate to its mismanagement of the public coffers," Puricelli said in a statement.

NorthSide began buying up land in the area 20 years ago, aided by some $43 million in state tax credits to fund acquisitions and maintenance. It later sold back some land it had purchased from the city to allow the National-Geospatial Intelligence Agency to assemble a site in the heart of its footprint.

But Northside still owns some 1,500 properties and 200 acres around the NGA. As its promised development projects stalled and the condition of its properties worsened, the city soured on NorthSide. Economic development officials, meanwhile, believe NorthSide demands sales prices in excess of the land's value, due to the debt encumbering the land, making redevelopment in an already difficult area even harder.

Puricelli, though, said Northside will make sure the city pays the "true market value that Mr. McKee has created in this area by being the first developer willing to invest in North St. Louis in decades."

"It comes as no surprise to Paul McKee that, now that he has been able to attract the NGA, the city suddenly wants his land," Puricelli wrote. "There has been no demand for or investment in this area of north St. Louis for the last 50 years, either on the part of the city or regional developers. This is opportunism at its worst."

The city's moves to begin clawing back NorthSide's land have been in the works for years. In 2018, former Mayor Lyda Krewson cancelled NorthSide's development agreement. And early last year, Alderman Rasheen Aldridge, who represents the area, sponsored a bill granting the city eminent domain rights over the area where NorthSide owns much of its property.

SLDC's announcement that it was moving ahead with eminent domain came a day before city voters head to the polls to decide whether Mayor Tishaura O. Jones deserves a second term.

“Communities in North City have been neglected by greedy, absent developers for far too long," Jones said in the statement Monday. "This is another step toward building a city that invests in its neighborhoods and puts residents first when it comes to development.”

On Friday, NorthSide Regeneration's main lender, the Bank of Washington, donated $10,000 to a political action committee supporting Jones' leading opponent in the race, Alderwoman Cara Spencer. Spencer's PAC has also received large donations — over $100,000 — from Clayco founder Bob Clark, whose companies partnered with NorthSide on a Bottle District transaction that netted them millions in tax credits.

The Bank of Washington, represented by the same law firm that represents McKee, has spent years in litigation against the city over its decision to sever the development agreement. The bank also pushed legislation in Jefferson City that would have protected its financial interests in the NorthSide Regeneration area by forcing the city to make it whole in any eminent domain proceedings.

Spencer said Monday she didn't realize the PAC supporting her had received $10,000 from the Bank of Washington. She stopped short of saying she would continue the eminent domain proceedings should she win the mayor's race, saying she would have to review the specifics. But she said her position on NorthSide Regeneration hasn't changed.

"I've been holding Paul McKee accountable since my first days in office," Spencer said.

Austin Huguelet of the Post-Dispatch contributed to this report.

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