Mo. court rejects challenge to land tax credits

Court Watch Posted on

A developer promising a multi-billion dollar makeover for impoverished north St. Louis won a legal battle Tuesday as the Missouri Supreme Court rejected a challenge to a state law directing tens of millions of dollars of tax credits toward his project.

The seven-member Supreme Court was divided in its reasoning but united in the ultimate result of its ruling, which secures state financing for the developer to assemble and maintain large swaths of land. Eventually, Paul McKee's NorthSide Regeneration LLC wants to build 10,000 homes and millions of square feet of office space in a two-square-mile area north of downtown St. Louis.

A lawsuit by two local residents took issue with a 2007 state law enacted with McKee's project in mind. That law authorizes up to $95 million of tax credits to offset part of the cost of buying and maintaining large amounts of property in impoverished areas. NorthSide Regeneration so far has received about $28 million in tax credits.

Tax credits reduce the amount of state income tax owed by a taxpayer. The lawsuit claimed the credits were similar to getting cash from the state and thus violated the Missouri Constitution by granting public money to a private person or corporation. A Cole County judge ruled against the plaintiffs in March 2010 and the case was appealed to the state Supreme Court.

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