By ALAN J. ORTBALS
St. Louis certainly has taken it on the chin when it comes to losing corporate headquarters of Fortune 500 companies.
In 1980 we had 23; there were 12 left in 2000 and we’re down to nine now. Along the way we’ve lost some gallant names from our list: General Dynamics, McDonnell Douglas, Southwestern Bell, Mallinckrodt, Anheuser-Busch, TWA, just to name a few. Today, Monsanto is waltzing to merger music with Bayer and Peabody Energy is in bankruptcy so maybe our nine will soon dwindle to seven.
That’s why it was so good to see Centene Corp. proposing to build an exciting, new corporate headquarters right here in River City rather than checking its bags and heading for the departure gate.
Centene is a hometown success story. It has become a health-care behemoth with more than 13,000 employees and nearly $23 billion in revenue last year. It ranks 124th on Fortune magazine’s list, which places it above companies you may know like Whirlpool, Monsanto and Visa.
And, at three-quarters of a billion dollars, its proposed project is a really exciting development for the Lou. It includes a new, 28-story, 660,000-square-foot headquarters building tied to the existing 20-story building with a sky-bridge. It is also proposing 128 residential units in seven to eight stories plus 40,000 square feet of retail space. And, Centene is talking about possibly moving 1,000 jobs from California to St. Louis and adding a third office tower.
What’s not to like? The location in Clayton’s central business district.
The project has been the subject of public meetings that have drawn large crowds of upset residents. The company is planning parking for 5,000 cars and even the developer projects an increase of 20 percent of Clayton rush hour traffic. As one resident put it, just going to the grocery store will be like getting out of one of the parking garages after a Cardinal baseball game. I’ve been in downtown Clayton at rush hour and I can’t imagine adding thousands more cars to that quagmire.
That, however, is a local issue for the government, developer and residents to work out. What’s more problematic to me is the economic development incentive package the company is seeking. Centene is asking the public to pitch in $147 million in subsidies, much of which would come from programs meant to combat blight. Clayton is one of the wealthiest communities in the metro area and if its downtown is blighted, I’d love to see one that’s not.
Utilizing programs meant to combat blight to assist companies to develop where they would go anyway is taking money away from schools, fire and police departments, etc. It also renders those programs impotent in areas that are actually blighted. These incentive programs were designed to try to bring investment to areas where developers fear to tread. Truly blighted areas are scary to many developers. Property ownership is a veritable Rubik’s cube. There are often issues with infrastructure or environmental contamination; plus they are plagued with unknown unknowns like, am I throwing money down a rat hole?
So, if you are going to get a developer to go to a blighted area, you not only need to level the playing field, you have to tilt it decidedly toward the blight. That’s why those programs were created in the first place. Why in the world would developers go to a blighted area when they can get the same incentives in a booming area where there is no risk? They won’t.
Missouri has a problem with this. In the Show Me State, blight is anywhere that would be more valuable if used for something else. But, these laws generally contain what’s called a “but for” clause, which is supposed to mean that without the use of the incentive, the project wouldn’t be feasible. It does not mean, unless you give us these incentives we’ll take our project elsewhere.
Wouldn’t it be great if Centene would select a site that is truly blighted and where its investment would spur additional development? I’d like to suggest one — the north riverfront property that was going to be wasted on the Rams.
This location, with interstate access and terrific views of the river, the Arch and the Stan Span would give Centene a signature site and make them a prominent part of the St. Louis skyline. Rather than being lost in downtown Clayton, the Centene HQ would be shown on national television every time there was a major sporting event in St. Louis.
And with 90 acres, there would be room for additional development that would be triggered by the Centene statement and its investment. Unlike a football stadium, the property would be populated with people 24/7/365. We could finally make good use of our riverfront; it would be a huge boost for the city; and possibly catalyze the long delayed Bottle District development as well.
That’s a project that would deserve the kind of public investment Centene is asking for.
Alan J. Ortbals is president and publisher of the Illinois Business Journal. He can be reached at [email protected] or (618) 659-1977.
By ALAN J. ORTBALS