urbanSTL

This is incredibly exciting, and very fluid.

General updates that I've read on a number of sources...
- Senator Chuck Purgason, R-Caulfield, has introduced the China Hub legislation to the Missouri Legislature.
It is on right now.
http://www.bizjournals.com/stlouis/news ... bills.html
- The STL Biz Journal reports that he's put forward the original legislation of the compromised economic development package. This is imporant as the compromised legislation is what Governor Nixon expected before he'd call a Special Legislative Session. Also, it's seen as the most likely form of the legislation to succeed.
Note: The Biz Journal's reporting negated a previously reported story by the Post-Dispatch that Sen. Purgason was writing a whole new piece of legislation that he'd submit today. Not that the P-D was fully wrong, but they reported a change possible that didn't materialize. (Still, the P-D's reporting is coming off as a little bit defeatist ... "Peril" already?)
http://www.stltoday.com/news/local/metr ... bbbde.html
- Senator Jason Crowell, R-Cape Girardeau, is positioning himself as Opponent #1 to the China Hub. Word is he's planning to filibuster the legislation. He's already working to stall it by questioning before the bill's introduction on whether or not the Special Legislative Session, now convened, should be convened in the first place. What an arsehole.
http://www.stltoday.com/news/state-and- ... b0258.html
- Therefore, the MO Senate is getting to vote on the China Hub legislation before the House, which is highly unusual, to help make sure that any attempt to run out the clock is negated by making him do his "last stand" at the very start of the session. Big props to the leadership of both the House and the Senate, and to the cooperation of Dems and GOPers in the majority seeing this important piece of economic development through.
- Opposition from the Left, meanwhile, is focused on how the Economic Development Package (the big legislation) comes at the cost of supplemental monies to the elderly & physically handicapped who rent homes. And while not wanting to sound callous or indifferent to their plight, I did read an article (I now can't find) where reps from the Governor's office said that the original intent of such credits were for a temporary relief, and questioning whether or not the original purpose was still there or if these people are just getting freely doled-out monies from the State coffers.
- Mayor Slay and a team of delegates are heading to Beijing and Shanghai this weekend to complete negotiations with their counterparties in China. This includes the COO of Emerson, an RCGA rep, and attorney Steve Stone.
http://www.stltoday.com/news/local/colu ... f6878.html

I'm reminded of the old expression of how watching Legislation get passed is like watching Sausages being made...

I cringe at the misguided voices in the Beacon piece:

"Let's just say 'No' to private subsidies for economic development!" - so says the man from St. Charles. I'm guessing he means subsidies for private economic development.

Alex, it's funny considering the Wal-Mart which the St. Charles man shops at -- and almost probably every other private business in his area -- benefits from public subsidies. I will take the advise of a common man from St. Charles on subsidy the day he moves to North St. Louis and witness daily the wonderful results that a lack of public subsidy brings.

I've corresponded at length with Senator Crowell regarding the HTC. He's insane if that definition fits a person unable to comprehend logic or respond to facts. Hopefully this moves forward. Unlike W1W it's not a situation where we would be losing money if private investment doesn't arrive as planned.

Keep the faith...

Right now, politicians are looking at the various blowhard opposition groups with a major thought echoing in mind... "Will they vote for me the next time around?" And, "How important is it that they vote for me the next time around?" Looking at the bunch of these people, like that one guy Alex points out can't even phrase his argument cogently, and it's assuring that the political handlers out there are smart enought to realize that you can't please all the people all the time, and some are so bat-winged sharthoused that they don't want them associating with their candidate.

Look at that picture in the Beacon article...

You take a fringe political action committee that buses a room full of blue hairs barely cognizant of what day it is, putting them in folding chairs at the steps to the state rotunda, and quid pro quo using them as a prop to promote how much subsidy you want a private developer of elderly care apartments in an economically challenged urban environment, so the developer gets the "the HUD faucet, the money faucet" turned on (i.e.: Steve Stogel, what MD Senator Clay Davis said to Russell "Stringer" Bell), and in the process attempting to derail the jobs of the next generation of voters ... that's political suicide, if not simply damnable abuse of the elderly.

Someguy: I bet you dollars to donuts that the MO GOP is not going to support Crowell come re-election for crapping all over a pro-business bill, written by GOP Senator Schmidt, and in a GOP-dominated bicameral legislature.

Doug: Agree on both counts, that the guy from the Chuck doesn't understand the word "subsidy", and that Senator Crowell really is out there. I'd phrase him as "dingbat arsehole", but I don't want to put words in your mouth...

Parliamentary process: The "Facebook" Student/Teacher law has made it through the Senate so far. Looks like the hold-up Crowell tried earlier isn't stopping everything...

STL Biz Journal: Full debate starts tonight at 730PM
http://www.bizjournals.com/stlouis/news ... rting.html

Post-Dispatch still hanging on to "Perilous" story, even though Senator Purgason hasn't submitted a revised bill as they forecast.

I'm in awe of the civil and informative conversation here on the forum. Nowhere else, nowhere else, will you find a factual and honest discussion on this particular subject. Huge tip of the hat to fellow forum members. This bodes well for the future, regardless of Aerotropolis outcome.

http://www.stltoday.com/news/local/govt ... 2ded3.html

They're asking for more assurance that Missouri would receive a return on its tax-credit investments.

I don't know anything about state politics, but this might be a promising sign, couldn't if?

By that, I mean at least the opposition isn't just interested in tanking the bill by any means necessary, right? They're interested in engaging in some back-and-forth, and at least entertaining scenarios in which they would support the bill.

^It does seem like they are willing to make it work but under more stringent conditions. They're moving to make sure that the state will at the least break even on every dollar spent on tax credits. [Seems fair to me.]

From the article in the P-D:

"After reviewing a cost-benefit study, key senators said that before they approve $300 million in cargo hub credits, they would try to add protections guaranteeing that warehouses and factories return at least $1 to the state for every $1 in tax credits they receive."

And:

"He noted that the legislation already imposes a return-on-investment of 1-to-1 for data warehouses. The cargo hub is "in the ballpark" of a 1-to-1 ratio so it, too, could meet that standard, he said.
That's better than historic preservation tax credits, which return only 21 cents on the dollar, and low-income housing development credits, which give back only 11 cents on the dollar, Lager said."

If the package is constructed and approved like this, the Missouri tax payer will receive a guaranteed return on investment. As I've said and written many times before: the Aerotropolis tax credits will pay for themselves. Guaranteed.

Now pass the bill, folks.

Damn it

Deep breath, everyone...

We all have noted that this special legislative session would be difficult, as the need to even call one is a big enough sign that there is some serious dischord in whether or not proactive investment in economic development benefits the State as a whole, that legislative members are concerned with significant capital allowances during these rough (Depression-esque) financial times, that these are politicians & not businesspeople, that there is political infighting & people fighting over pieces of the influence pie, and that nothing is guaranteed. Speed bumps are to have been expected; now, they're delivered.

The update is that the MO Senate will push forward with a $60M tax credit allowance, from $360M. The new package is reported to remove incentives for construction of new warehousing facilities but keep all monies meant to attract freight forwarding companies. The focus here, it's being said, is towards total jobs, not just construction jobs, and towards development of a logistics industry cluster sans real estate development. For a compromise, it's not that bad so far...

Plus, the construction tax credits are not fully eliminated, it's said, but are being transferred in authority towards the MO State Department of Economic Development. So, credits will remain available for new warehouse construction, just through another government entity. This will be fun, because the ROI from this construction will mean higher allocations to these types of projects, doing so to the detriment of out-state projects come allocation times.

Yes, it would be nice to see the whole $360M, or more, come through dedicated to this investment, but that just ain't gonna happen. Still, they haven't given up on this wholly. The value in such an industrial development, proactively, is evident to the MO Legislature; they're not just giving up on something big because they simply can't recognize it. They're still seeking it, just not putting such a heavy investment into it as they could.

Takeaway: Not paying for warehouse new construction, in and of itself, won't send Beijing to Cincinnati.

Two questions remain at this point...

1. Will the MO House agree to compromise? Will they fight for the original package instead? If doing so, would they possibly win accords from the Senate, or would they end up killing the compromise?

2. What will China think of this? This is a question of Diplomacy, not intra-state economic development.

On one hand, I see the Chinese seeing this as part of a compromise towards seeking cooperative business and the establishment of a Chinese foothold in STL for commerce. They want to see a commitment, not a dollar handout. When one considers the economic strength of the People's Republic of China, you quickly realize they're not desperate for $300M in MO tax credits. Two news stories I've read just today discuss the Chinese seeking to buy up Italian industries on the cheap as a foothold in the European economy (as the Euro falls under its own weight), and another discussing proactive Chinese investment into the Caribbean by about $1B.

The other hand, the pessimistic one, is fearful that the Chinese will see weakness in STL because of the influence of out-state parties either fearful or incapable of recognizing Chinese economic might. They want to feel valued. Sure enough, we've engaged them so strongly on the diplomatic angle, including Federal Legislators, the Governor, the Mayor, the County Executive(s), the China Hub Commission, the Chamber(s) of Commerce, organized labor, the majority of the MO Legislature, and the US Federal Government. Still, if they don't feel valued enough for what they may see as a moderate real estate investment seeking partnership, they may be skittish.

Of note is how the Chinese see real estate, as a prime source of value. The Chinese economic development mindset is rather Keynesian, moreso than even our Federal government has been over the last couple years. They see proactive government investment as key to propelling economic development, whether investments made today pay off now or twenty years from now. The reports of Chinese "Ghost Cities" prove this.

But long-term, China wants in the Central US. They're also not sure what other sites could fit them as well as Lambert STL, and they definitely don't have the relationships so well defined and determined to see something through without starting over again. From the layout of Lambert & its open surrounding areas, to the deep diplomatic ties our region has with both Beijing and Shanghai, I just don't see a city like Indianapolis or Columbus OH jumping in and ably taking our momentum away just yet; after all, who knows if they'd be funded by their own state governments.

It's not over yet; keep hope alive...