Tax credits McKee uses could also go to state penitentiary site

On a 120-31 vote, the Missouri House gave first-round approval Wednesday night to a bill that would extend the Distressed Areas Land Assemblage Tax Credit Act for an additional six years.

But the House added a twist: Rep. Jay Barnes, R-Jefferson City, sponsored an amendment making the historic prison site on the river bluffs east of the state Capitol eligible for the land assembly program.

“It makes sure that we give incentives … to make it a jewel for the entire state,” Barnes said.

The House bill also would make a former mall site in Kansas City eligible for the land assembly program. That idea, which broadened support for the bill, was proposed earlier.

Now, if the prison project gets off the ground in time, three projects — including McKee’s NorthSide Regeneration in St. Louis — would share up to $30 million a year in tax credits until an additional $95 million was exhausted.

So far, McKee has been the only one to use the land assemblage act. He has drawn more than $41 million to buy 2,200 parcels of land and pay borrowing costs. He envisions a massive makeover of a two-square-mile area north of downtown.

But the subsidy program is set to expire in August, and McKee has said he is 500 parcels short of the land needed for contiguous sites. So he hired a team of lobbyists to press for the tax credit program’s renewal.

Brian Schmidt, a former legislative tax analyst who is on McKee’s team, said Thursday that McKee supports broadening eligibility.

“He’s extremely happy that the House extended the tax credit,” Schmidt said. “And if the Jefferson City project, if they meet all the qualifications, then that’s great, too. He’s a big proponent of redeveloping distressed areas.”

The House also attached an amendment to require McKee to submit quarterly reports showing his progress in meeting development deadlines specified in his redevelopment agreement with the city of St. Louis.

The amendment’s sponsor, Rep. Lincoln Hough, R-Springfield, said the goal was to avoid passing a “blanket proposal” with no protection for taxpayers.

Even so, Hough acknowledged that the guarantee is vague because McKee is updating his redevelopment plan to reflect a recent court ruling allowing him to proceed.

“I continue to say we are binding the Department of Economic Development to a theoretical document that we don’t know what it looks like,” Hough said in an interview.

Barnes’ amendment, meanwhile, inserted a new issue into the already sweeping bill.

The amendment would require the state to sell 70 percent of the land it owns around the old prison by Dec. 31, 2014. Barnes said that he wanted to give the state flexibility to keep some parcels for future state office buildings.

The prison, the first built west of the Mississippi River, at times housed Charles “Pretty Boy” Floyd, James Earl Ray and Sonny Liston.

It opened in 1836 and closed in 2004. Since it was decommissioned, thousands of people have toured the remaining prison buildings.

A new federal courthouse now anchors the roughly 140-acre development site. A plan called for offices, parks and other uses. But the plan stalled when the economy soured. Barnes hopes the tax credits would help it restart.

The bill needs another House vote to move to the Senate. Then the real negotiations will begin, because the Senate has passed a drastically different tax credit bill.

The House plan would change various tax credit programs by raising or lowering their annual caps. It also would add new programs, such as incentives for data storage centers, international air cargo shipments and investors in start-up businesses. But it does not achieve any clear savings, as the Senate bill does. The Senate would scale back the two largest tax credit programs, which fund renovation of historic buildings and development of low-income housing. Together, they cost the state nearly $300 million last year.

(The House bill is HB698. The Senate bill is SB120.)