Is Square Worth What They're Being Given?

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Quotes from this St. Louis Business Journal article.

The city and state of Missouri are offering to sell up to $3 million in bonds for the San Francisco-based Square to buy equipment... The company said that it will initially hire 40 people for compliance operations, customer support, IT and recruiting. ...The company has said it plans to hire about 200 people over five years...The jobs will have an average salary about $43,000 a year. ...Under the deal, the city would become the owner of the equipment purchased by Square, which relieves the company of a tax burden on the equipment.


If I'm reading correctly, the city of St. Louis will spend up to $3 million for equipment that Square will use?... Indefinitely?... I guess the city could sell it if Square bails but I would have to think the rate of depreciation on that equipment will be pretty high pretty quick.

That average salary is far too low for highly skilled tech jobs, or it's a few highly skilled tech jobs mixed with very, very low paying jobs.

Are they required to hire at least 200 people in five years? If they don't what's the penalty?


...The deal also makes Square eligible for state tax incentives. The company could get up to $2.5 million through Statewide Works incentives for its expansion in St. Louis and $375,000 through the Missouri Works Training program if it meets job creation and investment criteria.


Even a sweeter deal...

Otis Williams, who heads the city’s economic development arm, said the incentives were necessary for St. Louis to be competitive with other cities vying for the Square jobs.


Really? Would major markets give them any incentives at all? Would comparable markets to St. Louis (Cincinnati, Indianapolis, Denver) give them a deal this good?
I see what you're saying but it appears stl can do no right. They're either not doing enough to lure jobs here, and when they do lure jobs here, they're being wasteful
City won't be spending $3M, it will be spending $190,000. The rest is State $ and STL region never gets back the fair share of what it puts into the state coffers...so i dont care how we get it back even if its $201 M for a stadium or this

City would make the $190K back via earnings tax in less than 3 years+ indirect spending by Square workers especially if some come outside the region and settle in the city...
I'd say anything that gets jobs from a Jack Dorsey run company in St. Louis might be worth the gamble of maybe over spending $3 million on.
dbInSouthCity wrote:
City won't be spending $3M, it will be spending $190,000. The rest is State $ and STL region never gets back the fair share of what it puts into the state coffers...so i dont care how we get it back even if its $201 M for a stadium or this

City would make the $190K back via earnings tax in less than 3 years+ indirect spending by Square workers especially if some come outside the region and settle in the city...


I agree with you on Square but I don't understand your sentiment expressed there on the stadium.... if it costs us more than we're getting back it is hard to say the state is doing the City right. Not saying the ultimate plan presented necessarily will be a bad deal for the city, but there has to be a point where you don't go ahead with an "at any costs" attitude.
Well we can get $200M from the state to be part of a $1B 3 year 24/7 union construction site or get $0 from the state and not have a 3 year 24/7 union construction site.
^ I think your fixated on the potential benefits at the expense of the potential costs. If the City of Saint Louis were required to contribute large sums to the massive BJC/WashU construction work out of the general fund those projects would have less efficacy for the city.
I think some are overly fixated on financial return on investment. Some deals don't need to be a perfect net gain because of the intangibles and what you are getting for having said asset in your possession or at your disposal.

As dweebe indicated, having a company of such notoriety (especially when the CEO is local and most probably don't know it) is worth an investment that may be repaid in unique ways not found on a ledger. In my opinion, so is the NFL.

A question regarding the initial post: is that salary really considered low? Based on the starting salaries I've seen for some graduate-trained professional positions locally, this doesn't seem low to me. Perhaps I underestimate the demand and market for tech positions. What is the training/education pathway to get to these positions?
blzhrpmd2 wrote:
A question regarding the initial post: is that salary really considered low? Based on the starting salaries I've seen for some graduate-trained professional positions locally, this doesn't seem low to me. Perhaps I underestimate the demand and market for tech positions. What is the training/education pathway to get to these positions?


I've been in the industry for years (software development / engineering). Typical pay for a software developer with 3-5+ years of experience and an undergrad in computer science from pretty much any typical university should be getting paid anywhere from $90K-$120K a year in a market like St. Louis. Specialized skills, past experience, leader or management responsibilities, etc can bring in a good bit more. Anecdotally, I understand computer science grads out of UM Rolla with zero experience are typically getting offers from $65K-$80K/year in KC for entry level positions.

I'm confused about the bond deal. Can someone please explain or point me to info to help me better understand? How it's briefly explained in the article I find confusing:

The city and state of Missouri are offering to sell up to $3 million in bonds for the San Francisco-based Square to buy equipment... Square would purchase up to $3 million in taxable industrial revenue bonds from the city. The move enables Square to get up to $190,000 in tax abatements over 10 years.


So does this mean Square purchases $3 million in bonds from the city and state and then by some process this gives Sqaure tax abatements of up to $190,000? So that effectively the only incentive Square is getting directly from the city is $190,000 in tax abatements?
^ I think that was a poorly written article.... I believe the Industrial Revenue Bonds issued by the govt. are non-taxable which is the whole point of the process; anyway its a way for Square to not have to pay sales and property taxes on the equipment since they don't own it... the way I understand it is these situations are rather like a lease situation for the company.
Regarding the incentive package for Square--the above is correct. The cost to the city was less than $200,000. However, we did provide incentives for the buildings they occupy. This has been a real win for the city. At the last Cortex board meeting we were advised that they just took down more space and leased 100 more parking spaces. We're effectively out of space and have been forced to turn down several tenants.
http://www.bizjournals.com/stlouis/news ... ffice.html

Biz journals artcle: Square looking for more office space in cortex or downtown.

Ballpark Village...? Cupples X...?
dylank wrote:
Wed Apr 19, 2017 3:56 pm
http://www.bizjournals.com/stlouis/news ... ffice.html

Biz journals artcle: Square looking for more office space in cortex or downtown.

Ballpark Village...? Cupples X...?
Well, always good news. Wish it wasn't paywalled.
bwcrow1s wrote:
Wed Apr 19, 2017 4:43 pm
dylank wrote:
Wed Apr 19, 2017 3:56 pm
http://www.bizjournals.com/stlouis/news ... ffice.html

Biz journals artcle: Square looking for more office space in cortex or downtown.

Ballpark Village...? Cupples X...?
Well, always good news. Wish it wasn't paywalled.
Looks like they are considering a downtown presence, but may expand in Cortex. It is noted that Cortex doesn't have 80k sqft readily available. The Koman group is looking to develop a 3 acre tech oriented project with office and residential and is actively courting Square. No mention of Ballpark Village. I would think this would be a great office project overlooking the Ballpark with a huge Square sign, free advertisement every time the Cards play also.
I'm rooting for Cupples X.
^ have we heard anything more on World Wide Tech? Are they out of the project?

My 2c is I'd like to see Square go into north of Market so we can build up more density in the heart of downtown... taking up the 505 Washington building and part of 555 Washington would be awesome.
I like the idea of Square being in the new BPV development or Cupples X: it offers a visible sign of growth downtown to visitors, and it fills in a space downtown that I think could signal other businesses/developers to lease space or build on the lots between North of Market and the Ballpark. Might see some of the building downtown find more tenants and developers for the open lots after observing a big name take up major space in new construction.
Asynchrony labs in couples X, square in BPV, and twitter moves HQ from San Fran to the vacant AT&T building.
^Nah; Twitter's gonna be out of business within a year anyway.
user28 wrote:
Thu Apr 20, 2017 1:58 pm
I like the idea of Square being in the new BPV development or Cupples X: it offers a visible sign of growth downtown to visitors, and it fills in a space downtown that I think could signal other businesses/developers to lease space or build on the lots between North of Market and the Ballpark. Might see some of the building downtown find more tenants and developers for the open lots after observing a big name take up major space in new construction.
The rumor is PwC is Ballpark Village and unless things changed WWT for Cupples X so I think we're good on new construction assuming at least one of those projects moves ahead. I agree that a combo of new construction south of Market and more lease ups north of it is ideal but as I think others are taking care of the new construction that's why I was liking Square for taking up existing space.
I completely agree with Rainbow that Square being north of Market would be best for downtown. Being close to Busch seems cool but there's hardly any lunch / happy hour options down there. They'd leave downtown the second their lease expires. No, no one goes to BPV for lunch and Square employees would take a happy hour at Hair Of The Dog, Bridge, or Pi over BPV any day. Wheelhouse, Start, and Flying Saucer are great but not enough variety to really keep employees happy.
If you disagree with me, take a walk down Olive from 4th to Tucker then compare that walk on Walnut or Clark. Olive is much more of the big city East Coast feel that young people want. Downtown is spread too thin as it is. We need to stop making it worse.
^ I think Square expanding and consolidating in Railway Exchange to be lead tenant would work great. Maybe they would even entertain a server farm on some of the floors, believe 2-8, that had the high ceilings from Famous Barr department store days.

My gut feeling. Koman might have found a tenant for moving their CORTEX property forward. .Which I think would be a better alternative then either Cupples X and or BPV. Would love to see WWT expand its commitment downtown with Cupplex X and BPV go forward with PwC.

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