Smoke and Numbers

In the Century Building scrap, everybody's deal is shaky, even the mayor's

Either the mayor did know and isn't telling the truth or Room 200 is a rudderless ship, with subordinates, hired guns and insiders calling the shots.

Either scenario's a bad one for Frankie the Saint.

From Stogel's brain to Miserez's pen: Such friendship will no doubt be a comfort to Stogel whenever the Old Post Office plan is presented to Miserez's board.

Mark Poutenis

From Miserez's letter to the five-point press release McGowan, Heller and Bates were forced to sign:

This document claims the partners seriously underestimated the cost of removing asbestos from the Century and featured a reference to a mysterious "new administrative rule" that would cause the Century and Syndicate Trust buildings to be ineligible for brownfield tax credits.

Let's flame-broil two of these:

· State Representative Joan Bray (D-University City), the Texas transplant who authored the bill for transportation tax credits, says a garage inside the Century would easily qualify for this credit because of its close proximity to a MetroLink station.

· No regulatory-rule change on brownfield credits has been made, nor is one in the works, says Kristi Jamison, spokeswoman for the Missouri Department of Economic Development, the agency charged with overseeing these tax credits. Repeated legislative attempts to cap the pool of dollars in both the brownfield and historic tax credit programs have been made as part of the draconian budget-slicing now taking place down in Jeff City, including a proposed $60 million lid on the historic credits that is now riding on the Senate's ballpark-subsidy bill.

As pilot of the complicated Old Post Office deal -- the pet project of a performance-anxious mayor -- Stogel should know better than to damn another guy's plan with such weak cheese.

Speedloader knows Stogel is smarter than this and is sure that his considerable political clout and close ties to Governor Bob Holden will win this project every bit of regulatory stretching, bending and winking the bureaucrats can get away with.

Given the budgetary chaos engulfing Jeff City, he and Frankie will need every inch of inside track they can get.

But that's only half the battle.

The Old Post Office project relies heavily on tax credits -- including $14 million in state and federal historic tax credits and another $14 million in tax credits from Miserez's agency that will be used to secure $28 million in corporate donations from companies in need of a tax break.

But this reliance makes the project particularly vulnerable to the gentle intricacies of a federal tax code that prohibits any tax-exempt building owner from taking advantage of these credits.

To step around this barrier, Stogel is resorting to a standard trick in the developer's magic bag -- one that takes advantage of a loophole in the federal tax code that allows a for-profit company holding a lease of 39 years or longer to grab the federal historic tax credits.

According to Stogel spokeswoman Marie Casey, here's how it would work:

The feds who now own the Old Post Office will assign the title of the building to the Missouri Development Finance Board. That state agency will grant Stogel's company and his development partners a long-term master lease, she says, which will allow the partners to claim historic tax credits after completing the renovation.

The partnership will then sublease the building to Webster University and the Missouri Court of Appeals' Eastern District.

But there's a problem here -- the state historic tax credit program is limited to for-profit owners only and makes no provisions for any long-term tenant to take advantage of the program.

"I'm not sure you can do that," says Ann Perry, who heads up the Missouri Department of Economic Development office that says grace over such projects.

To sneak the mayor's pet project over this hurdle, Stogel either needs a change in state law -- perhaps a midnight rider attached to the ballpark bill -- or a huge wink and nod from Perry's agency, say those familiar with the state historic tax credit code.

Casey says the project will meet the full letter of the law. But several other gotchas in the federal tax code make this difficult, says Sharon Park, chief of technical preservation services at National Park Service headquarters in Washington, D.C.

Even if Stogel wins his wink, the master lease can't be a sham or sweetheart deal -- market rates must apply. And the subleases to Webster U. and the judges must be short-term deals -- no longer than 20 years -- and automatic rollovers and renewal clauses are frowned upon.

That's a problem for the judges, says Doug Bader, court administrator. They want a long-term lease of 30 years or more.

"The court looks at this as a great opportunity to get a new home with bigger space and better security," said Bader. "We're not interested in having to do this again in five years or ten years."

All of this leads to another problem no one wants to talk about:

Despite all of Stogel's financial mastery, Slay's project fails to recruit brand-new downtown players as tenants for the Old Post Office building, such as a pricey out-of-town law firm to replace Husch & Eppenberger, the high-dollar outfit that faithfully handled so much City Hall business that it got rich enough to bug out of downtown and relocate to Clayton.

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