North Side Rancor: A quartet of legal eagles aim to shoot down Paul McKee's grandiose vision to regenerate St. Louis

Feb 17, 2010 at 4:00 am

On October 22, 2009, inside the Kennedy Room of St. Louis City Hall, an eclectic mix of citizens watched a man in a suit and tie approach the podium. Shaking his head, he addressed the urban development committee members.

"It just amazes me," scolded attorney Eric Vickers in the cadence of a preacher, "how gullible this city is when any developer comes forward and promises jobs."

At issue that autumn morning was a pair of ordinances that would enable Paul J. McKee Jr. to push forward with his $8.1 billion, 1,100-acre plan for a revitalized north St. Louis. It was a vision, McKee promised, that would create 22,000 permanent jobs and 43,000 construction jobs in the first fifteen years.

The north-side land magnate sat to the left of the podium, listening. He'd already been to the microphone and thanked the aldermen, as if he knew in advance what they'd decide.

"We use the phrase in our shop," said McKee, "that nothing great happens unless you 'embrace the tension.' I've got to tell you, we've been embracing the tension, and we've got a better product for us, the city and the community by doing that."

Now it was Vickers' turn. His voice swelling, the 56-year-old black activist called into question the aldermen's collective "competence," declared that their constituents had "no confidence whatsoever" in them and announced an upcoming opposition meeting.

Then he turned to look squarely at McKee.

"Mr. McKee, you said your corporate philosophy is to 'embrace the tension'?" I hope you are sincere in saying that, because it is just about to get tense."

The board soon passed both of McKee's ordinances. Mayor Francis Slay signed them in mid-November.

By December 9, Vickers had joined three other attorneys and four plaintiffs in a lawsuit designed to drag McKee's mammoth project to a grinding halt. Their legal claim, strictly speaking, is that city officials did not follow proper procedure in giving him the green light.

But their implicit message is that, despite official promises to the contrary, the city has effectively granted McKee, the O'Fallon, Missouri-based developer, permission to force residents out of their homes — all for a project, they say, he can't possibly pull off.

"It's almost asinine economics to think that a plan formulated before the great recession of 2008 still has viability now," Vickers says. The plaintiffs, he adds, are simply "residents who don't want to be overrun" by such a plan.

These aren't just any residents, though. Two of the four plaintiffs — Isaiah Hair Jr. and Cheryl Nelson — have repeatedly sought political office, and Nelson says she may run again in the Fifth Ward, where 85 percent of McKee's dream would be realized.

The names of the four attorneys might also sound familiar. Each has a high-profile case under his belt. D.B. Amon once represented the mayor of Berkeley in a libel case. Jim Schottel sued Donald Trump's reality show, The Apprentice. Bevis Schock, a hardcore conservative on the board of Rex Sinquefield's Show-Me Institute, filed a suit against Missouri's campaign contribution limits that a decade ago went all the way to the U.S. Supreme Court.

And then there's Vickers, perhaps best known for teaming up with the Rev. Al Sharpton and hundreds of protestors in July 1999 to shut down I-70 and demonstrate against the lack of minorities working for the Missouri Department of Transportation.

As Vickers took on more and more causes and saw his caseload bulge throughout the '90s, clients began to complain he wasn't returning their calls. In some instances, he failed to show up to his own disciplinary board hearings or answer subpoenas. In November 1999 the Missouri Supreme Court suspended his legal license, citing neglect and inadequate communication with clients.

The suspension, though, didn't stop him from agitating for the black community. By organizing protests, or simply threatening to, he wrested promises from St. Louis' Metro, the Illinois Department of Transportation and Pinnacle Entertainment, Inc. to award more construction contracts to minority-owned companies.

Since getting reinstated as an attorney in the spring of 2008, Vickers has largely kept out of the spotlight. But now he's publicly trying to bring down the most ambitious plan for the north side in city history. The hearing on February 16 represents his first appearance arguing before a judge in roughly a decade.

"It's like riding a bicycle," he says. "You never forget."

Hanging in limbo are two square miles of the city, nearly 2,000 occupied homes, some 9,000 residents — a quarter of them out of work — and a potential investment of billions of dollars to reshape north St. Louis.

"It's going to be showtime," Vickers says with a grin.

Paul McKee started snatching up hundreds of north St. Louis properties about seven years ago, operating through dummy companies to avoid detection. As weeds grew tall, and vacant buildings began to rot, neighbors fumed but didn't know whom to blame.

McKee declined comment for this story and asked that all questions be addressed to his attorney.

The media gradually caught on and made his furtive acquisitions public in 2007. The developer continued to dodge calls from residents, reporters, even city officials. By September 2009, however, McKee needed a big favor from the city — tax increment financing, or a TIF.

In a TIF arrangement, McKee borrows money from private investors and uses it to build things that normally the city would, such as roads and sewers. In exchange, the city keeps his tax obligations constant, even while his developing properties balloon in value and businesses start bustling. This new stream of wealth, untapped by the city, puts extra cash in McKee's pocket that he can use to pay off his debts to the investors.

"People are so uneducated about TIFs," posits Jeff Rainford, Mayor Slay's chief of staff. "There's no risk to the city at all if the city doesn't guarantee the debt. We've done that very rarely in St. Louis, and we've not agreed to do it in this case."

Still, McKee got an earful when he came requesting such a deal at the now-infamous TIF Commission hearing of September 23 at city hall. A crowd of some 400 people, both avid supporters and harsh critics, tried to fill the second-floor meeting room. Half of them never made it inside.

D.B. Amon managed to get in, though. He'd been a vocal critic in previous small community forums held by McKee. At one of those gatherings, Amon chided the developer for trying to prevent a young man from videotaping the proceedings. "I'm an attorney; I know better than you," Amon shouted.

At the September TIF hearing, Amon jabbed his ink pen at the commissioners and said, "Giving these people the impression that eminent domain is not a part of this program is deceitful. It's evil, and it's wrong." Applause erupted.

"You all spent much of your time talking to McKee's people," Amon argued, while the residents affected by the plan were given but two minutes each to speak their minds.

Two weeks later, on behalf of a plaintiff named Bonzilla Smith, Amon filed suit against the city and McKee. The pleadings stated, among other things, that the TIF commission failed to consider all the public's comments at the hearing. It kept dissenters out, according to Amon's suit, by allowing the plan's supporters, allegedly bussed in by McKee, to fill up seats.

Worse still, the commission never bothered to determine whether Paul McKee can make his vision a reality, Amon claimed. For example, has the developer won a genuine commitment from his primary lender, the Bank of Washington? And, given the complex ownership structure of McKee's holdings, who will be liable if the deal goes south?

One document even suggested, according to Amon, that McKee would profit even without a TIF, so why does he need one?

The commission has approved a plan, Amon wrote, that is "woefully flawed."

On October 11, KMOV-TV (Channel 4) reporter Chris Nagus knocked on Bonzilla Smith's front door in hopes of finding out more about the lady behind the lawsuit.

Smith, an elderly woman wearing glasses and slippers, told Nagus she was indeed the plaintiff, although she thought there would be others besides her. She feared eminent domain and was willing to litigate to stop it but didn't seem to know exactly whom she was suing. She said Amon had reached out to her — not the other way around.

When the reporter and his crew caught up with the attorney the next day, his behavior was bizarre. With the hood of his sweatshirt pulled over his head, Amon chomped on a cigar and refused to answer any questions. He kept retreating into his office only to hurry back out, hamming it up the whole time.

At one point, he tried to hoist up his sweatshirt to prove he was wearing a tie. Later, he yanked the cigar out of his mouth, babbled, "I meant what I said and said what I meant," then flashed a toothy grin and waved into the camera.

Amon declined to comment for this story.

When Amon finally did sit down with the TV news crew on October 14, he blamed elected officials and the black middle class for abandoning the north side. Asked why then he would file a lawsuit to kill a proposal that might finally reverse that, the attorney replied that he didn't consider McKee's particular vision "an opportunity for the people who live in the area."

For the next few weeks, Eric Vickers mulled things over on the sidelines. He became acquainted with Cheryl Nelson, a new plaintiff who joined Amon's suit. He also began considering potential team members.

Bevis Schock quickly sprang to mind. Both launched their careers at Bryan Cave after earning law degrees from the University of Virginia. Vickers aligned himself with the African American left, while Schock turned into a self-proclaimed "Big Meanie" conservative ideologue. But Schock, fueled by a reverence for private property rights, became a seasoned warrior in the crusade against eminent domain. That made him perfect for this case, Vickers says.

Jim Schottel, for his part, had his own experience fighting for the little guy. Once a field goal kicker at Baker University, Schottel was running across a wet floor in May 1991 when he slipped, broke his neck and suffered paralysis that keeps him in a wheelchair to this day.

After finishing law school, he briefly worked for Vickers before setting up his own practice. In 2005 his lawsuit against Donald Trump's The Apprentice prompted the show's producers to adopt an entry policy more welcoming to the disabled.

Vickers recalls learning of Schottel's victory and thinking, "That's my kind of guy." All three attorneys agreed that they'd be willing to work the case pro bono.

Vickers couldn't decide on a way into the McKee controversy until he attended Amon's first court date two days before Halloween. Rather than establish his own case, he realized, he would join this one.

"It just kind of clicked," recalls Vickers. "Intervene. That's the way into it. Assemble a team. Find the law. Get Bevis. Get Jim. And let's roll."

At the end of a quiet cul-de-sac near Cass Avenue and North 14th Street, Cheryl Nelson's two-story home sits in the heart of north St. Louis but may as well be in a county suburb. The dozen houses on the block were built as recently as 1997. Eight are occupied by two-parent households. "This area is not like what they portray in the newspaper," Nelson says.

The front lawns are mowed, and the two-car garages are open in the middle of the day. It's a block where the neighbors tease each other, swap lawn equipment and grill burgers together on hot days. And it lies right inside the first area Paul McKee wants to transform.

Standing outside her house on a cold January afternoon, Nelson points to where she used a stick to scratch her children's names and her own into the freshly laid concrete a dozen years ago, just before they moved in. "This was going to be our safe haven," she says. "This was our investment."

Nelson's personal investment here forms the basis of Eric Vickers' first line of attack against the McKee plan. In order to get his TIF from the city, he says, McKee had to prove that without one, nobody would invest in the area. People such as Cheryl Nelson obviously have.

McKee also had to prove that the area was "blighted." According to University of Iowa history professor Colin Gordon, "blight" signifies physical, economic and social decay, and is a notoriously flexible term in the state statute.

"Nobody has a decent empirical measure of what constitutes blight," observes Gordon, who recently published a book on St. Louis' twentieth-century decline. "But Missouri law is among the worst in terms of basic accountability. It's even understood to mean a parcel that's not making as much in taxes as it could."

Missouri law requires that blight be demonstrated with an independent study. A local consulting firm called Development Strategies did indeed generate a study of the north side late last year. But the developer paid for it, which, insists Vickers, compromises its integrity.

Ever since the city blighted Nelson's house under the McKee-friendly ordinances in November, the value of her property has dipped, she claims. She insists that she has no plans to move. But the drop in value might still harm her, according to Schock, should some emergency spring up and she's forced to sell.

"And don't forget, this isn't happening in Ladue," adds Schock, who is white and believes there's a racial element to the designation. "What blight usually means is black people."

Gordon says that Schock has a point. In three major developments during the last century — the Jefferson National Expansion Memorial on the riverfront, Mill Creek and the original Busch Stadium — the city blighted and cleared predominantly black areas. As a result, Gordon says, African Americans moved into north St. Louis. Now, blight has found them again.

"It would be a stretch to accuse McKee of outright racism," Gordon says. "But there are glimmers of that old view that when poor people live in an area, it's underutilized."

Schock says there's a genuine "psychological insult" that affects someone like his client, Cheryl Nelson. "When somebody tells you your house is blighted," he says, "it's like telling somebody, 'You got a nice kid, but he's kind of ugly.'"

Nelson doesn't see her block as ugly or underutilized. "We're viable," she says several times, "and we're fully paying taxes on our homes."

Though for ten years, she did not. A blight designation also allows for ten-year tax abatement, says Judy Woolverton of Choate Construction, the company that built the houses on the block. Nelson and her neighbors enjoyed that tax break, Woolverton says.

Nelson's house was already blighted when she bought it.

Seated in a fifth-floor conference room overlooking downtown Clayton, Paul McKee's attorney, Paul Puricelli, looks weary with frustration. He's been told that Cheryl Nelson fears she'll have to leave her home.

"We're not asking her to," he says. "And we're not forcing her to. No one is going to be displaced from their homes."

Later in a phone interview, Nelson says she doesn't buy it. "They wrote Old North out of the plan," she says. "Why don't they write us out of the plan? Let's see it in writing."

It is in writing, Puricelli insists, referring to a clause in the ordinance that reads: "The use of eminent domain will not be allowed pursuant to the redevelopment plan." What follows is a 200-word disclaimer listing conditions under which eminent domain could, in fact, be used. Puricelli says none of these exceptions applies to owner-occupied residences. Vickers doesn't believe him.

"If [McEagle] really was serious about not wanting power of eminent domain," Vickers says, "they would just easily guarantee it in the development plan. It wouldn't be any 'however-whereas' kind of language. Just 'no.'"

The ordinance clearly states that if McKee decides he wants someone's house, he'll have to convince the aldermen to pass a new piece of legislation in order to obtain it. That requirement, insisted upon by board members, is a very first for the St. Louis area, says Robert Denlow, chairman of the Missouri Bar's committee on eminent domain.

"That in and of itself will seriously disincline the redeveloper to use eminent domain," predicts Denlow, who for 30 years has represented clients fighting what they consider to be government land-grabs.

"It's a very time-consuming process, and the political climate is very anti-developer," Denlow goes on. "It would almost be cheaper for the developer to pay a premium for the home than to go back to the board of aldermen."

And a desperate homeowner, squeezed from both sides, can still appeal to the courts, Denlow points out. "At the end of the day," he says, "a jury creates a level playing field, stripping the developer of its power."

Alderwoman April Ford-Griffin, in whose Fifth Ward Cheryl Nelson's neighborhood lies, states that she'll never allow McKee to seize someone's house or church. Under the tradition of aldermanic courtesy, whereby board members stay out of each other's wards, she holds the power to prevent it.

Schock is skeptical. "Let's say she's absolutely telling the truth, and she means it," he says. "Well, she's not gonna be in office forever. Why would anybody want ownership of their home to depend on whim of an elected official?"

Cheryl Nelson says she certainly wouldn't. She tried unsuccessfully to oust Ford-Griffin in the Democratic primaries of 2001 and 2005. Nelson notes that while her own property lies in McKee's footprint, the alderwoman's home does not. "It could be punishment for me having run for office," Nelson says. "But only God can punish me."

The alderwoman claims Nelson's lawsuit is politically motivated. Just like every other initiative she's brought to the ward, Ford-Griffin says, Nelson and her co-plaintiff, Isaiah Hair Jr. oppose this one.

Nelson denies any political machinations. "I should have the right to remain," she insists. "This house, this neighborhood is something called the all-American dream for me. Now it's almost turned into a nightmare."

Asked if she was considering running again, Nelson replies, "When one is preparing a political strategy, those kinds of questions people like to bypass."

Ford-Griffin says she refused to fully endorse McKee's project until she secured protections such as restrictions on eminent domain and a requirement that the developer stay on top of his crumbling vacant buildings. These days, she champions the deal, pending McKee's good faith and her constituents' support.

"I know people want development because I'm the one they've called and hollered at every week for twelve years," Ford-Griffin says. "Do I think everything that he put in [the plan] will get done? No. But do I think that the north side will look a whole lot better if he can do half of it? Absolutely."

"Is there more of Burnham or Barnum in one Paul McKee?" asks Judge Robert H. Dierker in a December 10 preliminary ruling on the lawsuit. In other words: Is McKee St. Louis' answer to Daniel Burnham, the grandiose Chicago planner who once said, "Make no little plans. They have no magic to stir men's blood"? Or is he more like P.T. Barnum, the circus con man?

Dierker reveals his own bias by ticking off a list of what he believes were flawed schemes — The Gateway Mall, Mercantile Center, St. Louis Centre, Ballpark Village — and lumping them with "perhaps the most ambitious of all," Paul McKee's NorthSide Regeneration.

Amon had attempted with an early motion to shut down the development pending the suit's outcome. In his ruling, Dierker declines to do so. But at the same time, he shows sympathy for some of the plaintiffs' arguments.

He refers to the TIF Commission chair as "indifferent," the commission's review of the TIF proposal as "superficial" and city officials in general as "lackadaisical."

Dierker does not spare the developer. He writes that the "record is rather hazy" concerning the ownership of McKee's company, an important detail if the project collapses. The judge adds that the plaintiffs may well prove that McKee's financial backing is flimsy enough to invalidate the ordinance.

Dierker's ruling suggests that the nature of public criticism of McKee has shifted, according to the St. Louis American. "The image of 'Bad Neighbor' Paul," the editorial board writes, "has been replaced by that of 'Deadbeat Developer' Paul."

Even St. Louis Post-Dispatch columnist Bill McClellan has joined the naysayers. "Let me make the first and easiest prediction of the new decade," he wrote on January 6. "Developer Paul McKee's ambitious project...will be a resounding bust."

"McClellan is usually so middle of the road, like the average Joe in St. Louis," says Michael Allen, the preservationist blogger who first found out McKee was amassing north-side parcels. "Losing his support doesn't bode well."

A separate lawsuit filed in Cole County, meanwhile, threatens the developer from a different angle. A state incentive program awarded McKee $19.4 million in tax credits late last year, which he's already used to pay down debt. North-side residents Barbara Manzara and Keith Manquard are suing the state, claiming that the program is unconstitutional because it allows McKee to bail himself out with public money.

"These lawsuits certainly do one major thing," Allen suggests. "They force [McKee] to spend a lot of money on lawyers' fees at a time when he's cash poor."

Puricelli says he doesn't know whether the suits are having any financial impact on McKee. As for the all the legal opposition, he says, "I don't understand it. We're trying to do something good for north St. Louis." He adds that he's "comfortable" his side will prevail.

Meanwhile, Vickers and his team prepare for battle. "I think we can win," he says. "Our aim is to get this ordinance voided. That's where we're headed. And McKee needs to realize from the judge's ruling that that's a real threat to him."