Riverfront apartment project in doubt after commissioners hear criticisms of St. Louis developer
Port Authority of Kansas City commissioners did not move forward with plans to award Lux Living tax incentives on a $55 million deal to develop apartments on the Berkley Riverfront after news stories detailed the developer’s past in St. Louis.
After weeks of criticism, a deal between the Port Authority of Kansas City and a St. Louis developer looking to build a $55 million apartment project on the riverfront took a blow on Monday.
Port Authority commissioners could not get a second on a motion to proceed with a final vote that could have awarded tax breaks to Lux Living’s proposed 251-unit apartment project.
That’s after some commissioners, as well as representatives from housing advocacy group KC Tenants and taxing jurisdictions criticized the deal during Monday’s meeting of Port Authority commissioners.
They raised questions about how much due diligence the Port Authority, or Port KC, carried out on Lux Living. The developer has been the subject of recent media reports about its prior development work in St. Louis and the past of its chief executive, Victor Alston.
“Given their track record, I don’t even know how you could consider them in the first place,” said Ruby Watson, a member of KC Tenants. “Before you all start dishing out bonds you should really do a deep dive on these companies.”
Lux Living did not immediately respond to a request for comment on the board’s decision.
In a statement, Port Authority president and chief executive Jon Stephens said the future of the project will be discussed in the coming weeks with Lux Living and Port KC commissioners.
Last week, the Midwest Newsroom published a report detailing how Lux Living did not disclose Alston’s 2017 settlement with the Securities and Exchange Commission in response to a question in Port KC’s application.
The settlement resolved allegations of accounting problems when he worked for Ixia, a California network company. Alston did not admit or deny the allegations; the SEC ordered him to pay a $100,000 fine and banned him from serving as a director or manager of a public company for five years.
A Port Authority official said the developer was not technically required to disclose the SEC matter under the version of the disclosure form in effect at the time, but acknowledged that it should have been disclosed “out of an abundance of caution.” The current version of the disclosure form would have required its disclosure.
The report also found the developer did not disclose recent lawsuits in response to another question in the Port KC’s application form. Alston’s attorney Ira Berkowitz argued the lawsuits did not need to be disclosed, as they “wouldn’t concern anybody.”
The St. Louis Post-Dispatch recently published a story describing tenants of Lux Living’s St. Louis apartment building, The Hudson, complaining about living in unfinished apartments and maintenance and security issues.
At the meeting, several committee members said they had concerns about the developer. Commissioner Henok Tekeste said he was “struggling” with a yes vote.
“The school district is not happy, the tenant association is not happy,” he said. “What are we doing, really? Is it not what we should be doing to get the tenants, the school district and the community to be a beneficiary of this thing?”
Commissioner Kevin O’Neill, who criticized Lux Living at a meeting last week, made his reservations clear.
“They have a sketchy history,” O’Neill said. “For an out-of-town contractor to come in — and have that type of background and [want] that length of abatement of 25 years — I’m going to have a hard time supporting this.”
At a development committee meeting last week, Port KC senior development manager Krishan Purvis said he was confident that Lux Living was a developer the agency could trust after a trip to visit its developments in St. Louis.
However, the agency added rules into the proposed development agreement with Lux Living in an effort to “protect itself.” Port Authority general counsel Brian Rabineau said the rules would allow the agency to intervene if complaints and issues arise at the development.
But Lux Living’s past wasn’t the only concern at the meeting.
Kansas City Public School District policy strategist Kathleen Pointer and several members of the KC Tenants organization criticized the development’s affordable housing units. They said the units weren’t truly affordable, even though they met the city’s affordable housing rules.
“We support the addition of truly affordable housing,” Pointer said. “We do not think the burden should fall completely on the taxing jurisdictions.”
For more in-depth news from Iowa, Kansas, Missouri and Nebraska, we invite you to follow us on Twitter.