urbanSTL

If you would pass this on to Will in your response, I would greatly appreciate it.

Unfortunately, the backwards thinking that has lead simpletons to analyze what historic tax credits have done for downtown are completely ignorant to what could have happened.

What has become of downtown STL is a dramatic revitalization. If you focus only on the performance of the buildings being credited, you have totally missed what has happened to downtown.

For people in their 20s, Washington Avenue has become a top destination... funded mostly by tax credits. Although this has also increased tax revenue, it has allowed for new restaurants, living spaces, and excitement that brings me to my main point.

Without the tax credits that have revitalized downtown, I have directly heard from multiple top 10 employers in St. Louis they would no longer have offices in the city. It is because of the renewed excitement that when they have moved offices or renewed leases they have remained in STL.

Although you must guarantee the success of the tax credits, that should not be their purpose. The purpose is from the success of the credits new economic growth will be spurred on by the new companies that come into Missouri.

The reason we are all excited about the opportunity of a Chinese hub is not because of a couple of new warehouses. We are engaged at the opportunity that a new Chinese culture may choose to bring their talents to St. Louis. From this, Wash U may be able to gain additional interest as a University and jump in the rankings. Our technology firms may be able to work with the local freight forwarders to sell their products. The Cardinals may be able to attract the next Ichiro- you can't imagine the Asian investment in the Mariners. It is our only chance!!! to be in the conversation to bridge the divide between the two worlds.

One final remark. I sat in the Atlanta airport last week reading the Delta magazine. They were proud to be located in Atlanta, but truly wanted to explain how beneficial their partnership was to one another. The key point was their airport generates 40 something billion dollars in revenue for the area.

If we become the gateway for cargo from China to South America, can you imagine how small 360 million dollars will sound over 15 years. If we say we could possibly become half of Atlanta( a great task) 20 billion dollars a year against a 25 million dollar investment.

I can not argue with the individuals that want to make sure they get this done correctly, but it will be political suicide if Cinci steals this opportunity. More importantly, our country is searching for opportunities that would create long term job growth, this is sitting just inches from our nose. YOUR WERE HIRED TO FIND A WAY TO MAKE THIS WORK, not vote yes or no...

I wish the P-D would provide some context rather than simply report on the alleged link between Mamtek and the China hub:
http://www.stltoday.com/news/local/govt ... caa3a.html

The stupidity is killing me!

nickstl,

sorry i didn't see your comment until after i replied to Senator Kraus, but here's my latest response. will post if he replies.

Senator Kraus,

Again, thank you for taking time to respond to my emails. As to the 20% return on the HPTC I have to ask, how is that return measured? Property taxes only? State income tax derived from the labor that goes into rehab? Increased economic activity in revitalized neighborhoods? Perhaps you can point me to a resource.

Also, how exactly would the "Aerotropolis" incentives lose the state's money? As I understand it the bill calls for temporary tax EXEMPTION, not hand-outs, for cargo-related businesses that set up shop within 50 miles of Lambert. At worst the incentives delay additional revenue that is not likely to exist otherwise. Am I misunderstanding? Is there more to the story?

Respectfully,

Adam XXXXXXX

I'm glad to see that others are being proactive. It motivates me to continue fighting for this. Let's keep up pressure. We don't have Rex Sinquefield money, but we can make sure that our voices are heard.

KMOX, like every other local news outlet, has been jumping all over the "Mamtek is Chinese, the Chinese government is Chinese, so the China hub must be a scam" bs: http://stlouis.cbslocal.com/2011/09/26/ ... -missouri/

I understand that part of a journalist's job is to simply report statements made by major players. I get it. However, you also have a duty to provide some context, particularly when it concerns matters of tremendous public importance!

From the article:
"The company has been under a magnifying glass recently; legislative leaders said Mamtek’s failure was one of the reasons the General Assembly has prevented the bill to create a trade hub with China in St. Louis from moving forward during the special session. Last year, Gov. Jay Nixon touted the benefits of the deal between Moberly and Mamtek, which was finalized in 73 days rather than the usual six months. Questions have been raised regarding Nixon’s support of the Mamtek project, accusing the governor of announcing the project before doing the necessary research."

Moberly rushed a deal in 73 days with a foreign company that they knew nothing about. We've been negotiating with a clearly legitimate company for over 4 years! What?
No context. Nothing.

for those of you in the know, what's the real story behind this possible tragedy? Is it:
1) In-party fighting amongst both parties?
2) Anti Gov. Nixon-ism?
3) Anti St. Louis-ism?
4) Anti fat-cat developers?

What is it? What's the real story?

Sorry if it has been pointed out already, but airport decisions tend to have HUGE local and even regional impacts.

My understanding is that back in the day Atlanta and Birmingham were relative equals, and that Birmingham turned down the opportunity for a large international airport that eventually went to Atlanta. Now we see they are today.

Perhaps the problem here is that this has never been positioned as a competition between other similarly sized cities, it was more about STL is trying to get this if it happens at all?

Imagine if it was some new auto plant or corporate headquarters with interest in STL, INDY, CIN, and Columbus, the politicians would be falling over themselves to throw money at getting this.

But because its the Chinese and there are no pretty pictures of exactly what will be, and to this point who else in the US was trying, they're fine to let it go?

Again, I urge everyone to direct their dissatisfaction toward Steven Tilley. This is what Count, GC, and I were told last week when we were at the capitol, and it's what the P-D seems to suggest.
email: Steven.Tilley@house.mo.gov
phone: 573-751-1488

He actually does respond. I've been emailing back and forth with him today

^I agree. I emailed him earlier today as well. He responded rather quickly.

My emails to these politicians are getting edgier, nastier...I need to stop but my basic message is "What makes Missouri's economy so special that we can forgo an opportunity that others are salivating for?"

^^I feel you. It's hard to remain civil, particularly when I think that they are clearly wrong. However, you are more likely to get them to take you seriously and respond if you keep a cool head. I just try to be assertive without being antagonistic.

more from Will Kraus in response to my last email (see above):

Adam,

The returns come from a Department of Economic Development analysis of the Form 14 submitted to the DED. My understanding is that the analysis includes all economic revenue return to the state (state sales tax, income tax, corporate tax, etc.). It would not include local return such as increased local taxes, since that does not benefit the state.

The original Aerotropolis proposal paid out tax credits once a warehouse was built. That alone guarantees no jobs or economic return to the state. If a company where to build or renovate a facility or apply for receive and use the associated tax credits, and then go out of business without moving/building a single product, the state would lose that money.

The current thought is to allow the companies to apply through Compete Missouri where certain job growth standards are applied. That process lowers the state's risk, in my opinion.

My door is always open,

Will Kraus

will be writing to Steve Tilley this evening...

If a company where to build or renovate a facility or apply for receive and use the associated tax credits, and then go out of business without moving/building a single product, the state would lose that money.

I could be wrong, but I think Kraus still doesn't get it (or is refusing to concede the difference between tax monies and tax credits.)

You're right; under the original legislation (I haven't read BUILD), a facility must engage in either level 1 or level 2 air cargo transport in order to receive credits, which means the scenario described by the legislator could never happen.
In order to qualify for level one credits, at least 20% of an air cargo facility's operations must involve the shipment of international air cargo. Such facilities would receive tax credits for up to 6% of annual eligible costs (eligible costs are expenses that are necessary to make a facility capable of handling time-sensitive cargo. See pages 67-68 below). In order to qualify for level two credits, at least 10% of an air cargo facility's operations must involve the shipment of international air cargo. These level two credits are capped at 4% of annual eligible costs.
Moreover, freight forwarders are only awarded credits to the extent that they export American made goods. They receive 35 cents per kilo for perishables and 30 cents per kilo for all other goods. As such, all incentives under the bill are tied to the shipment of air cargo to or from international destinations.
Both types of credits are heavily back-loaded, which means that the bulk of the incentives would not be disbursed until after Missourians are in a better position to assess the success of the hub. Under the original bill, freight forwarder credits ($60 million over 7 years) are capped at $850,000 in the first fiscal year and $7.5 million during the second fiscal year. The credits for facilities ($300 million over 15 years) are capped at $2 million during the first fiscal year, $15 million during the second, $16 million during the third, and $20 million a year until the year 2020.
In short, the legislator is wrong in asserting that one could receive credits without directly contributing to hub operations. The bill also makes it clear that one may only receive credits for engaging in international cargo operations that commenced after May of 2011, which ensures that credits would only go toward new business activity. These wouldn't be tax breaks to companies that already engage in the desired business activity.

Reading his response makes me even more frustrated. How can he oppose the bill if he doesn't even understand the basics?

Aerotropolis starts on page 66: http://www.senate.mo.gov/11info/pdf-bil ... mm/SB8.pdf

Looks like the Tea Party Republicans are going to beat the business Republicans yet again in Missouri. We're racing to the bottom!

I guess I was just pessimistically thinking that legislators aren't likely to do anything other than shut down the session. The House is meeting tomorrow. We'll see what happens.
Tea Party is beating up on the regional economy here, not just pro-business Republicans.

What do you all think about submitting the Aerotropolis position paper, or something like it, to the P-D? I'm thinking about writing a letter to the editor regarding the stupidity of shutting this down because of Mamtek. Thoughts?

Update: here is the "letter to the editor" that I submitted to the P-D:


Artificial Connections

I am writing to express my frustration with recent attempts to link the Moberly debacle with the international air cargo trade hub initiative at Lambert. This paper, in fact, has suggested that this alleged connection accounts for much of Jefferson City’s mounting opposition to the trade hub. Moberly, however, effectively wired money to a “Nigerian prince” who emailed them regarding a tremendous business opportunity. The plan to establish an international trade hub at Lambert could not be more different.
To begin, Moberly’s losses stem from the decision to partially fund the construction of an artificial sweetener plant by issuing bonds to an inadequately vetted American-Chinese joint venture. Moberly incurred losses when this company defaulted on its bond payments. The proposed Aerotropolis (trade hub) bill, however, would only provide performance-based tax incentives; companies could only receive tax credits to the extent that they directly contribute to the shipment of international cargo. Furthermore, the bill targets business activity that does not currently exist in the region, meaning that the credits would not substantively impact the state’s existing revenue streams. In light of these realities, if the Chinese fail to follow through on their stated intention to turn St. Louis into a “major air trade hub,” the state would not incur losses suffered by Moberly.
Additionally, unlike the Moberly deal, which was concluded in 73 days, the trade hub initiative is the culmination of roughly 4 years of negotiations between regional leaders and officials representing the highest levels of the Chinese government. Furthermore, China Cargo Airlines, the company on behalf of which these officials have negotiated, is a subsidiary of one of the largest companies in China, hardly a fly-by-night operation.
The only thing that the company with which Moberly contracted shares in common with China Cargo Airlines is the fact that they are both linked to China. Refusing to move forward on the hub because of this tenuous connection is about as sophisticated as holding a grudge against all Chinese people because you once argued with a Chinese person.
The Moberly debacle teaches us to be cautious with the use of public funds and to adequately vet potential business partners. The Aerotropolis bill contains sufficient taxpayer safeguards, and China Cargo Airlines is probably more financially secure than the state of Missouri.
I urge you to contact your elected representatives and demand that they not squander this opportunity to position the region as a competitive player in the global economy.

In addition to your comments, I believe the Chinese airline(and all Chinese Airlines) is owned by the Chinese Government. No better backer in the world than the government that essentially owns our country.

Roger Wyoming wrote:Looks like the Tea Party Republicans are going to beat the business Republicans yet again in Missouri. We're racing to the bottom!

The problem is we don't have any Danforth type Republicans left (or enough of them at least) to stand up to the Tea Partiers

This group that is fading nationally (only 20% approve of the tea party in recent polls) has complete control of the Missouri GOP whether the remaining Republicans in the urban areas want to admit it or not.

If in their dying throes as a movement they manage to screw St. Louis out of this I will definitely be looking for a way out of this state. If I wanted to live in Alabama I'd be there already--they have warmer winters and a bit of coastline to make up for their political mindset.