The Crystal City Council has brought an end to the long-standing legal battles over the 240-acre property where the Pittsburgh Plate Glass Co. operated for nearly 100 years before closing in 1991.
Crystal City has owned the old PPG property since 2007, but the City Council recently agreed to transfer ownership of that land to James Kennedy, a St. Louis County entrepreneur who previously leased the property and had plans to build an iron ore processing plant there.
Those plans never materialized, leading to the dispute that ended with the transfer of the land to Kennedy.
In return for the property transfer, Kennedy agreed to pay $15,000 to Crystal City to replace the monthly payments Union Pacific had been paying the city for the railway that runs through the property. Those land use payments will now go to Kennedy.
City Administrator Jason Eisenbeis said the payments the city had been receiving from UP were small, between $90 and $150 per month, so the $15,000 lump sum replaces approximately several years’ of expected payments.
Eisenbeis said the property transfer was part of the negotiations between the city and Kennedy to end the litigation. However, that deal also was tied to Kennedy’s negotiations to sell the Festus Municipal Airport property in Crystal City to the James Hardie Industries company, which manufactures siding and other products and plans to build a plant there.
“So part of the whole party transaction was doing what we could do to end this litigation and give Mr. Kennedy’s property back,” Eisenbeis said. “It was negotiating in good faith from all of us all together from Hardie to us to Mr. Kennedy, trying to see how we can make all this work and it was a good faith effort for all parties.”
Eisenbeis said he believes transferring the property to Kennedy was a good move for the city.
“Right now, we’re seeing a lot of growth both commercially and industrial-wise. We hope after all this time that Mr. Kennedy comes to the city with a good, viable plan that will bring jobs and betterment to our community. We’re always looking for that,” Eisenbeis said.
He said he does not know what Kennedy plans to do with the property but speculated that, given the large amount of riverfront property Kennedy owns in the area, a port would be a likely choice.
Whatever Kennedy decides to do with the property, he will have to apply for a conditional-use permit, which the Crystal City Council would need to approve.
Kennedy did not return a call for comment.
The history
In 2007, the city purchased the Works 9 property from PPG for $2.2 million. Then, the city signed a 100-year lease with Wings Enterprises Inc., which Kennedy owned. The lease required Kennedy to pay the city $2.2 million up front.
Crystal City officials also entered into negotiations with Kennedy, who also owned a mine in northern Washington County, for the iron ore processing plant he wanted to build on the Crystal City property.
After news got out about the negotiations, though, they turned contentious, leading to a sharp divide between residents who opposed the plans and those who supported them.
Those who supported the proposal believed the plant would benefit the city economically. Those who opposed the plant said the city had not investigated Kennedy’s plans well enough and acted too quickly, without enough transparency, before signing the lease and did not adequately consider the impact an iron ore plant would have on the surrounding neighborhood.
Ward 1 Councilman Jack Ginnever, who cast the lone dissenting vote in September to transfer ownership of the PPG property to Kennedy, was a founder of the Concerned Citizens for Crystal City (C4) group that opposed the iron ore processing plant. Ginnever owns and lives in the former PPG hospital building on Mississippi Avenue at the foot of Bailey Road.
The lease the city signed with Kennedy in December 2007 required him to have the plant up and running within five years. In 2011, Kennedy ceded his interest in the lease to Pea Ridge Resources LLC and announced he would no longer be part of the plans to develop the iron ore processing plant. At the end of the five years, the processing plant had not been constructed and the City Council granted PRR a five-year extension. In 2015, PRR informed the city the project was not viable and the company would not be moving forward with the project.
Crystal City officials later discovered that PRR had failed to pay 2016 property taxes for the PPG property, which was a violation of its lease. In November 2017, the city filed a lawsuit in Jefferson County Circuit Court to end the lease, which would allow the city to pursue other development opportunities on the property.
In October 2017, Kennedy filed a breach-of-contract lawsuit against PRR and attempted to again take control of the lease for the property.
In March 2018, PRR filed a suit in St. Louis County Circuit Court alleging that Crystal City was in breach of its contract with the company for seeking to terminate the lease.
The lawsuits involving the city, Kennedy and PRR wound their way through the courts in the intervening years with virtually no resolution, until the James Hardie company took interest in the area, serving as the catalyst for all the parties to come to the table and find an agreement.
After negotiations, a motion to authorize dismissal of adversary action, release of claims and disposition of lease was approved in late August, and on Sept. 28, the City Council voted to approve an amendment to the litigation and settlement agreement, which transferred ownership of the property to Kennedy.