As the clock ticked down on an expiring tax credit program, Missouri's economic development agency authorized more than $7 million in aid for a rebuilding project in tornado stricken Joplin and an impoverished area of north St. Louis.
The Joplin development was conditionally authorized to receive up to $5.76 million of tax credits and St. Louis developer Paul McKee got a conditional authorization of $1.4 million on top of the roughly $40 million for which he had previously been approved, according to documents released Friday to the Associated Press by the Department of Economic Development.
Both tax credit authorization letters were dated Wednesday, which was the last possible day under a 2007 law that created the "Distressed Areas Land Assemblage Tax Credit." Joplin officials said Wednesday their application had been approved.
The letters say the tax credit authorizations are conditioned upon several factors, including the submission of various documents and a department determination that the project expenses meet eligibility criteria.
The 2007 law, which was passed with McKee's project in mind, capped the program at $95 million in tax credits. But the program used just half that amount before Wednesday's deadline.
McKee lobbied unsuccessfully this year for lawmakers to extend the program.
His Northside Regeneration LLC plans an $8 billion redevelopment of 1,500 acres of land north of downtown St. Louis. As envisioned, the development would eventually include 10,000 homes and millions of square feet of office space. But the project has been delayed because of court battles and community concerns.
As recently as Wednesday, the city's Tax Increment Financing Commission delayed a decision on a change to McKee's financing package after some residents raised concerns.
The state tax credit program was intended to offset part of the cost of buying and maintaining property, such as boarding up vacant buildings or clearing out weeds. But eligibility was limited only to entities that accumulated large swaths of land. A project area had to include at least 75 total acres - at least four-fifths of which had to consist of lower-income residents - with at least 50 acres of eligible properties and an average of at least four parcels per acre.
Because of the specifications, few besides McKee had even considered seeking the tax credits.
But the Joplin Redevelopment Corp. Inc., which is trying to revitalize an impoverished area hit by a May 2011 tornado, decided to give it a try.
Joplin has contracted with Wallace Bajjali Development Partners to serve as a master developer for land bought by the redevelopment corporation. The group's CEO, David Wallace, told The Joplin Globe that he received a letter confirming the tax credits had been authorized at 4:59 p.m. Wednesday - one minute before the typical end of the business day.
Wallace told the Globe the tax credits could be sold for about 90 cents on the dollar, generating about $5.1 million that the Joplin Redevelopment Corp. could put toward future development projects.