yeah his answer is bs, but it's polite and respectful bs.
OK, ok. I suppose I was a little dramatic in my critique of Emerson. LOL
However, my fundamental point stands - Civic Progress type local biz leaders (and Emerson is absolutely one) never seem to take any ownership in their own company's role in where the region is now. How they *contribute(d)* to the state of STL.
I think it's perfectly fine and acceptable that Emerson chose Clayton, btw. In the post-covid office world, it makes perfect sense to me. Truly. no beef.
However, in his STLToday.com oped, Emerson CEO Lal Karsanbhai talked about the "barren" streets of downtown STL. Well, move your company there, dude. Workers on downtown streets make them less barren.
Enterprise is in a similar boat. A HUGE part of their STL City marketing campaign lauds their investment in downtown. I'm ecstatic they chose downtown for the soccer stadium and even more happy it was privately funded. However, again, workers on downtown streets make them less barren. Hey Taylors, moving your company downtown (never happen, mind you) could have been more transformative to STL than a soccer stadium.
(In a somewhat related point, in 2023, post-covid, I think the region should go all-in on making Clayton the true CBD for the region. Covid *really* changed my POV there. Downtown STL should be entertainment and residents. I can't believe I'm ever writing that, but office life just isn't coming back and I don't think downtown STL should expend much capital there anymore. For workers, DT STL lost. DT Clayton won.)
anyway, enough pontificating for now.
However, my fundamental point stands - Civic Progress type local biz leaders (and Emerson is absolutely one) never seem to take any ownership in their own company's role in where the region is now. How they *contribute(d)* to the state of STL.
I think it's perfectly fine and acceptable that Emerson chose Clayton, btw. In the post-covid office world, it makes perfect sense to me. Truly. no beef.
However, in his STLToday.com oped, Emerson CEO Lal Karsanbhai talked about the "barren" streets of downtown STL. Well, move your company there, dude. Workers on downtown streets make them less barren.
Enterprise is in a similar boat. A HUGE part of their STL City marketing campaign lauds their investment in downtown. I'm ecstatic they chose downtown for the soccer stadium and even more happy it was privately funded. However, again, workers on downtown streets make them less barren. Hey Taylors, moving your company downtown (never happen, mind you) could have been more transformative to STL than a soccer stadium.
(In a somewhat related point, in 2023, post-covid, I think the region should go all-in on making Clayton the true CBD for the region. Covid *really* changed my POV there. Downtown STL should be entertainment and residents. I can't believe I'm ever writing that, but office life just isn't coming back and I don't think downtown STL should expend much capital there anymore. For workers, DT STL lost. DT Clayton won.)
anyway, enough pontificating for now.
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That makes a ton of sense. Leaders who are complaining about barren downtown streets should consider moving their offices to downtown.soulardx wrote: ↑Jun 11, 2023OK, ok. I suppose I was a little dramatic in my critique of Emerson. LOL
However, my fundamental point stands - Civic Progress type local biz leaders (and Emerson is absolutely one) never seem to take any ownership in their own company's role in where the region is now. How they *contribute(d)* to the state of STL.
I think it's perfectly fine and acceptable that Emerson chose Clayton, btw. In the post-covid office world, it makes perfect sense to me. Truly. no beef.
However, in his STLToday.com oped, Emerson CEO Lal Karsanbhai talked about the "barren" streets of downtown STL. Well, move your company there, dude. Workers on downtown streets make them less barren.
Enterprise is in a similar boat. A HUGE part of their STL City marketing campaign lauds their investment in downtown. I'm ecstatic they chose downtown for the soccer stadium and even more happy it was privately funded. However, again, workers on downtown streets make them less barren. Hey Taylors, moving your company downtown (never happen, mind you) could have been more transformative to STL than a soccer stadium.
(In a somewhat related point, in 2023, post-covid, I think the region should go all-in on making Clayton the true CBD for the region. Covid *really* changed my POV there. Downtown STL should be entertainment and residents. I can't believe I'm ever writing that, but office life just isn't coming back and I don't think downtown STL should expend much capital there anymore. For workers, DT STL lost. DT Clayton won.)
anyway, enough pontificating for now.
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Advocate shareholders who would have issue with the company surrendering earnings growth to the City's earnings tax. They'd see to the CEO's firing and replacement by someone who wouldn't choose location over shareholder maximized returns. Like it or not, that's a huge factor.SouthCityJR wrote: ↑Jun 09, 2023Seems to me that if the CEO genuinely wanted to go downtown like he claimed, he would have just done it…who would stop him?
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Obviously those 400 jobs would be paying earnings tax and adjusting salaries to accommodate the delta but l don't see shareholders giving a fig about that even at the level of compensation these guys are pulling down. Certainly not enough to fire a CEO they like.
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^Then again, if you get the wrong activist investor - whether an Icahn, a Citadel, or even a Hindenburg Research - they'll utilize any advantage they can to oust the current leadership. I'm not a fan of this at all, but I get the apprehension. It's almost like certain public companies would need a poison pill strategy just to locate their HQ back in Downtown. Cheers to all the publicly traded companies in Downtown, wish EMR was one of them.
are corporate earnings subject to the city earnings tax? I didn't think they were, yet don't know. and a google search wasn't helpful.gone corporate wrote: ↑Jun 12, 2023Advocate shareholders who would have issue with the company surrendering earnings growth to the City's earnings tax. They'd see to the CEO's firing and replacement by someone who wouldn't choose location over shareholder maximized returns. Like it or not, that's a huge factor.SouthCityJR wrote: ↑Jun 09, 2023Seems to me that if the CEO genuinely wanted to go downtown like he claimed, he would have just done it…who would stop him?
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Taxes take from general corporate revenues, decreasing aggregate earnings per share. It wouldn't necessarily be a huge surrender to the tax man but perhaps enough to have an issue created around it.
Addendum: I had thought Emerson would've located at BPV3, being the marquee name at the planned tower at the NW corner. With legalized sports gambling again not passing the MO General Assembly, I bet that delayed construction plans, perhaps costing this opportunity.
Addendum: I had thought Emerson would've located at BPV3, being the marquee name at the planned tower at the NW corner. With legalized sports gambling again not passing the MO General Assembly, I bet that delayed construction plans, perhaps costing this opportunity.
Sorry, not following. Emerson's operating income for 2022 was like $4.4 billion. If Emerson was in the city, would Emerson cut a check for $4.4 million to the city?gone corporate wrote: ↑Jun 12, 2023Taxes take from general corporate revenues, decreasing aggregate earnings per share. It wouldn't necessarily be a huge surrender to the tax man but perhaps enough to have an issue created around it.
Addendum: I had thought Emerson would've located at BPV3, being the marquee name at the planned tower at the NW corner. With legalized sports gambling again not passing the MO General Assembly, I bet that delayed construction plans, perhaps costing this opportunity.
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It’s not a tax on a total operating income. It’s a 1% tax on each employee that works in the city. If they moved to the city, Emerson would theoretically give each employee a raise to cover that additional tax.
Yep, totally get the 1% employee part. Thank you for confirming!Debaliviere91 wrote: ↑Jun 12, 2023It’s not a tax on a total operating income. It’s a 1% tax on each employee that works in the cities’ income. If they moved to the city, Emerson would theoretically give each employee a raise to cover that additional tax.
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I didn't take it seriously when I saw it, but I thought I saw something about the city considering a change to the 1% tax. That it would become some kind of credit.
Have those talks continued in any way? I'd imagine not. Just wondering.
Have those talks continued in any way? I'd imagine not. Just wondering.
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i mean why make excuses for them. They are a F500 company shareholders are not keyed in on the lavish perks and prestigious office space the executive class awards themselves with. Charter's CEO moved the HQ to Connecticut because he didn't feel like moving.
Its not really complicated. The execs live in places like Ladue. and Clayton because it is the most elite place to live and they can afford to. They want a pleasant and short drive to the office each day and more free time with their families. Clayton affords them the opportunity to have all that and a brand new Class A office to boot.
So they decide to move offices to Clayton. Then they build a case to justify it. No Earnings Tax, Downtown is lame, City = scary/crime, etc. Then they just do what they had already decided to do in the first place.
Its not like ousting the CEO is a cake walk and the idea they would do it over a tax burden on 400 employees because the CEO decided to move them to the city is nonsensical to me. If he did it unilaterally he might face the ire of his leadership team but there is no indication he didn't seek their input on it. Its likely many if not most also preferred Clayton .
Its not really complicated. The execs live in places like Ladue. and Clayton because it is the most elite place to live and they can afford to. They want a pleasant and short drive to the office each day and more free time with their families. Clayton affords them the opportunity to have all that and a brand new Class A office to boot.
So they decide to move offices to Clayton. Then they build a case to justify it. No Earnings Tax, Downtown is lame, City = scary/crime, etc. Then they just do what they had already decided to do in the first place.
Its not like ousting the CEO is a cake walk and the idea they would do it over a tax burden on 400 employees because the CEO decided to move them to the city is nonsensical to me. If he did it unilaterally he might face the ire of his leadership team but there is no indication he didn't seek their input on it. Its likely many if not most also preferred Clayton .
It a 1% tax on the company's net revenue as reported to the IRS.Debaliviere91 wrote: ↑Jun 12, 2023It’s not a tax on a total operating income. It’s a 1% tax on each employee that works in the city. If they moved to the city, Emerson would theoretically give each employee a raise to cover that additional tax.
Lot of conflicting info on this 1% earnings tax on this forum alone. I can't figure it out and google doesn't help. anyway, who has a link that shows exactly what it taxes?STLAPTS1 wrote: ↑Jun 12, 2023It a 1% tax on the company's net revenue as reported to the IRS.Debaliviere91 wrote: ↑Jun 12, 2023It’s not a tax on a total operating income. It’s a 1% tax on each employee that works in the city. If they moved to the city, Emerson would theoretically give each employee a raise to cover that additional tax.
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I’m not familiar with any 1% City tax on a companies net revenue. Perhaps I am unaware of it though. If so, it’s different than the 1% earnings tax placed on individual incomes.soulardx wrote:Lot of conflicting info on this 1% earnings tax on this forum alone. I can't figure it out and google doesn't help. anyway, who has a link that shows exactly what it taxes?STLAPTS1 wrote: ↑Jun 12, 2023It a 1% tax on the company's net revenue as reported to the IRS.Debaliviere91 wrote: ↑Jun 12, 2023It’s not a tax on a total operating income. It’s a 1% tax on each employee that works in the city. If they moved to the city, Emerson would theoretically give each employee a raise to cover that additional tax.
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^ The city does not have a 1% tax on company net revenue. There is a 0.5% payroll expense tax paid by employers (not profits can get an exemption) on wages earned in the city.
https://www.stlouis-mo.gov/government/d ... x-info.cfm
https://www.stlouis-mo.gov/government/d ... x-info.cfm
I guess I misunderstood.STLrainbow wrote: ↑Jun 13, 2023^ The city does not have a 1% tax on company net revenue. There is a 0.5% payroll expense tax paid by employers (not profits can get an exemption) on wages earned in the city.
https://www.stlouis-mo.gov/government/d ... x-info.cfm
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^ no problem.
But what if we did have a 1% tax on net revenue? Looks like Stifel, which is based downtown, reported $2.8B in net revenue for 2022. That alone would be $28M for STL City... let's do it! Not sure what the 0.5% payroll earnings tax on Stifel generates, but let's say Company XYZ has $100M in employee wages earned in the city -- that would generate $500,000. Plus 1M from the 1% employee earnings tax, we're looking at a total of $1.5M from those two taxes.
But what if we did have a 1% tax on net revenue? Looks like Stifel, which is based downtown, reported $2.8B in net revenue for 2022. That alone would be $28M for STL City... let's do it! Not sure what the 0.5% payroll earnings tax on Stifel generates, but let's say Company XYZ has $100M in employee wages earned in the city -- that would generate $500,000. Plus 1M from the 1% employee earnings tax, we're looking at a total of $1.5M from those two taxes.
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Just my own guess, but I would say if the city had a 1% tax on net revenue that you'd have a lot of companies looking to move to Clayton. At the very least it would up the "we're leaving unless the city gives us incentives to stay" game.
ITT: people asking themselves why companies do not move to downtown AND proposing new ways of making companies even more averse to moving downtown!
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Yep. We are nowhere near having the leverage to levy an additional 1% tax on companies in the city.
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^Perhaps more for another thread, but:
It's hard to even justify the 1% earnings tax - that exists to pay for more public services on a comparative basis - when there's a severe lack of police presence in the Central Business District. Companies could end up thinking: "Why pay more and receive less?"
Addn.: I still think EMR would've considered BPV3 if DeWitt, etc. would've built it. I think they relied too much on the passage of the sports gaming legislation to be its funding source. No sports gaming, less revenues, no BPV3 right now, no EMR in Downtown. Just a thought.
It's hard to even justify the 1% earnings tax - that exists to pay for more public services on a comparative basis - when there's a severe lack of police presence in the Central Business District. Companies could end up thinking: "Why pay more and receive less?"
Addn.: I still think EMR would've considered BPV3 if DeWitt, etc. would've built it. I think they relied too much on the passage of the sports gaming legislation to be its funding source. No sports gaming, less revenues, no BPV3 right now, no EMR in Downtown. Just a thought.
Exactly. While I do understand how some companies might take issue with the earnings tax, I would imagine the lower rent would make up for it.quincunx wrote: ↑Jun 12, 2023Will they catch flack over high rents in Clayton?
Math time:
Let's say the 400 employees have an average wage of $200,000 (I have no idea what it is but since it will be a good amount of executives making millions, I don't think this is a bad estimate) - that's $80M in wages at 1% = $800,000 plus 0.5% payroll = $400,000 to the city. Presumably if they moved downtown then they would presumably have to increase the wages of their employees accordingly (so a cost to them). So you are looking at $1.2M per year on those employees to be downtown all in for earnings taxes.
However, if you factor in 104,000 sqft of office space (at $45/sqft, most expensive in all of MO) then the cost is roughly $4.68M for office space/year. If you went to Met Square, it drops to $24/sqft or $2.496M for the exact same square footage.
They would be almost $1M better off downtown, all else equal. Or put another way, they would have to have an average wage of $364,000 on their 400 employees to make it a "wash". OR, you could could spend $33.46/sqft downtown and make it a "wash".
So yeah, I don't think earnings taxes were in the equation. I also don't know why a shareholder would care about earnings taxes (esp. since so many cities have them) - as a shareholder you shouldn't be dictating costs like that (so long as you get a return). Otherwise, why not just advocate for them all to work out of a trailer in the middle of MO?