I don't know. I'm just relaying what was told to me by a guy who has been at the very center of negotiations with the Chinese since the beginning. They were attached to the $300 million in Aerotropolis, and this simply won't fly in the absence of tax incentives. Stephen Perry and the Chinese have reportedly had it with Missouri. The Chinese are moving on if they don't feel confident that necessary infrastructure will develop quickly, and tax incentives to the American air cargo industry are apparently the only way to provide them with such assurances. CIncinnati has more of this infrastructure already in place, and Delta's recent decision to leave Cincy opens up space at the airport.
We had serious, serious connections working for us, but Perry now apparently thinks we are a bunch of backwards, xenophobic idiots, and he wants nothing to do with us if (when) we screw this up. Basically, as goes Perry, so go the Chinese. He is that well connected, and relationships apparently matter that much to the Chinese.
Opportunities like this don't come around very often for cities like St. Louis, and Missouruh is almost certainly about to completely sabotage this. Again, be angry
^ So basically 4 years of work will benefit another city, because outstate legislatures are xenophobic and hate St. Louis. Perfect. Can St. Louis ever get anything right? WOW! But I can say that it isn't the regions fault for once, but the state we are in. I just dont see how a few outstate senators can bring down such an important bill. This is very ridiculous and shows how broken and corrupt politics have become.
I'm wondering what the Midwest China Hub Commission will say once this falls through. I just cant believe there was no back up plan. St. Louis City, St. Louis County, and St. Charles County were all for this. Is there any way we can come up with a regional finance plan? Maybe there is hope next legislative session. We cant just let this die. Even if other cities benefit from our immediate idiocy. St. Louis is just TOO perfectly positioned for this. The Chinese did say there would likely be more than one hub.
the incentives were suppose to be spread out over 16 years correct? Is there anyway we can get something anything off the ground with enough money for year one? Even if its jut one warehouse for now. I agree with everyone else there has to be a backup plan. After 4 years we just can't let this just die on the vine. There has to be a hail mary somewhere in the playbook.
According to insiders, there is no viable back up plan. We also have real competition for this. We were winning going into the fourth quarter, but it appears as though the coaching staff is just going to call it quits. I mean, calling an effective play would entail "picking winners and losers," right? I guess they think they can avoid "picking winners and losers" by simply walking away.
I blame this on lukewarm supporters in the legislature (e.g. Lamping and Tilley) as much as I do on the steadfast opponents. I got the sense that GC, Count, and I put more effort into persuading opponents the day we went to Jeff City than these "supporters" put forth during the entire special session. Truly sad considering that the three of us are just ordinary St. Louisans who have no obligation to advance regional interests.
It looks like Nixon called the special session largely as a means to divide the Republicans and try to push his tax incentive program in place of Aerotropolis. If the alleged consensus ever truly existed, it was extremely fragile. Crowell, the Show-Me Institute, and the Tea Party in general fractured this alleged consensus early in the session, and Nixon jumped at the opportunity to expand his jobs program. According to my source, Nixon was pushing some version of his jobs program in place of Aerotropolis all summer (Compete Missouri, Quality Jobs, or BUILD-which is a blend of Compete and QJ). This apparently further eroded any consensus that might have once existed.
Eric Schmitt seems like the only local politician with any balls. I can't believe I'm saying this about a Republican, but he's the only MO politician who I now actually kind of admire. Nixon is dead to me, our local leaders are worthless, and don't even get me started on the Tea Party.
I can't help but feel depressed/angry when I think about how we could be well on our way to becoming an international trade hub if this had passed during regular session. Speaking of providing assurances, this doesn't give me much assurance that Missouri is a serious state.
Just noticed that Lambert is the 6th most underused airport in the entire world: http://www.infrastructurist.com/2011/10 ... the-world/
The China hub (global trade hub, really) is the only thing I can think of for which this distinction would actually work in our favor. In light of what will almost certainly happen tomorrow, it looks like it we will only move up this list.
Things are so bad in the Missouri Legislature that they approved a resolution calling for the building of the Texas made fighter jet over the Saint Louis made Boeing Super Hornet. Utter fools.
OK, if the General Assembly is going to fail us, we'll have to figure this out ourselves...
My thoughts are that, from Tuesday on out, a new front could be waged utilizing some form of public-private partnership. There remains strong support for the Trade Hub in STL City, STL County, and St. Charles County, all three of which have positive rankings for municipal bonds and public projects. We can then add-in our area's business strengths in commercial real estate, public finance (municipal bond writing), and three major broker/dealers with strong municipal bond underwriting departments and access to large pools of private equity. If the General Assembly is too weak and short-sighted to accomplish a simple economic development package, then we must seek out a new financing package, and doing so of, by, and for the STL Metro Area.
Any Lawyers with a background in Real Estate: Is this possible? Does there exist the proper statutory language that could see this come into existence? Or, does such language not exist, rendering this futile?
Any Underwriters: How would it look to seek a series of muni bonds, perhaps sponsored by STL City, STL County, and St. Charles County (or all as a new entity specifically for bondwriting a Trade Hub) that could put together a large muni bond offering to support the creation of such a hub? Would a 20-year bond be feasible for accomplishing the Trade Hub independent of the State of MO, and doing so without ruining any high S&P rating?
Any Investment Professionals with ties to Private Equity: Can a P/E fund be established with a combination of public financing and private monies? Could we get some CT hedge funds or P/E speculators to invest in building the Trade Hub infrastructure? After all, the ROI forecasts are already ridiculously profitable.
Wealthy Families in Ladue, Wildwood, Huntleigh, etc.: This is when you step up and help the community at-large. You have the means, the wealth, the sheer ability to accomplish what us regular middle-class folk can't do ourselves. With the neighborhood surrounding STL Country Club being ranked the 6th most affluent neighborhood in the US, we know we have the locals who can make this happen, who have the business acumen to lead, and who have affection for STL. And while it does not come with a gala celebration (just yet) in support of itself, supporting the Trade Hub is when your affluence and fortune exists to help us all. Plus, as your family office managers are sure to tell you, there is a ridiculous amount of ROI here.
Organized Labor: How about some of the funds in your pension funds help with this? I know of unions that had supported private developments beforehand, which had been profitable, and which more than paid for themselves with returns superior to other investments made with your funds. Not only do you get the opportunity to profit, but the chance to ensure work for decades. And, sticking it to the out-state guys who don't support you already.
(Put "Scabby" next to the Capitol while you're at it)
What about the Bank of China, another Chinese bank, or a sovereign wealth fund? There are billions of dollars sitting around the world right now, many of which lost double digits in market exposure in the 3rd Quarter of this year, seeking diversification outside of equities or bonds especially as the dollar vs. renminbi fighting is still going on at the Federal level. Perhaps we could offer the lands around Lambert at cut-rate prices to the Chinese to develop themselves, without taxation. Sure, we wouldn't be getting the new tax revenues from the projects directly, but we'd still recognize tens of thousands of new local jobs that won't materialize otherwise.
City Hall & County Offices: Do This! This is the crucial time, whether STL as a Metro Area remains a place for business to thrive or if we're subservient to economic self-interest by graduates of non-accredited universities in the Bootheel. Tell me that we have a contingency plan and that my thoughts are just redundant.
Make no mistake: Whether STL remains a going concern for global business is at hand.
If you can help, do so.
Can we get an updated list of people to call/email, or is it too late for that? If not too late, can we get a short list of talking points, just to remain consistent?
^Call the MO Senate; directory's available online. Say you support the Lambert Trade Hub and the tens of thousands of jobs it'll bring to MO, the massive increase in MO exports (including agricultural), the billions of new investment to MO, and how the tax credit program offered is the most fiscally responsible form of tax credit to be written. Stress that all of MO will prosper, and that the name of the game really is jobs for all of MO. Oh, and remind them that you do vote.
^ interesting article. The good news for St. Lou is that Denver just isn't ready yet and it will take years to build up the manufacturing/export end of things there. I think a place like Dayton, OH would be a much more ready place to steal our China Hub future.
If anything, those occupySTL people should be protesting this. This just shows that during the greatest economic downturn since the Great Depression, nobody is leading on jobs. We had this teed up for us, and legislators still struck out. They also managed to thumb their noses at the second largest employer in the state in the process. This is a failure of competence, a failure of honesty, and generally an epic failure of governance.
Seriously, occupySTL, much like the occupy movement in general, doesn't seem to have much coherence or direction. A concrete issue like the failure of the legislature to pass a no-brainer of a jobs bill in the face of Tea Party opposition could breathe some life into the local movement.
The Beacon on last week's occupySTL protest: http://www.stlbeacon.org/region/113421- ... ms-to-grow
"Edwards, 30, is a former Marine who was out of work for more than a year before a fellow veteran helped him find a job. Edwards said the frustration about the flagging economy and low-paying -- or non-existent -- jobs was palpable among many of his acquaintances."
Reading stuff like this makes me feel more angry than depressed: http://www.chinadaily.com.cn/usa/epaper ... 800914.htm
Opening sentence: "WASHINGTON - A China-United States partnership in the aviation industry could be the best way to get more badly needed manufacturing jobs back to the US and provide China with the best aviation services."
The Aerotropolis bill was carefully crafted to minimize any adverse effect on the state's existing revenue streams. It accomplished this by specifically targeting business that doesn't exist in the region through performance-based incentives. Moreover, the MDED study showed that by the end of the 15 year life of the bill, it would ultimately produce more revenue for state coffers than it expended in tax credits in every situation analyzed. Most importantly, it was specifically designed to attract necessary players, which provided the Chinese with the assurances they need. I can't believe this is about to fail. This is insane!
From the St. Louis Association of Realtor's (of which I'm a member) daily message on the MLS today:
Last Call: Aerotropolis Event Tomorrow at SLAR
From: Richard A.Capelli (ID: rcapelli)
Want some inside information on the Aerotropolis Bill and China Hub negotiations? Join us at SLAR tomorrow (Wednesday, October 12th)from 7:30-9:00am in the lower-level classrooms for an update on the China Hub/Aerotropolis negotiations. Our featured speakers Rhonda Hamm-Niebruegge, Lambert Airport Director, and Sen. Eric Schmitt, sponsor of the Aerotropolis legislation will give a presentation you don’t want to miss. A complimentary continental breakfast will be served; registration is required. Seating is limited! To RSVP, please email Ali Pauluhn at apauluhn@stlrealtors.com. Please visit the Governmental Affairs event page on www.stlrealtors.com for more information.
Looks as though Scmimtt and Hamm-Niebruegge are still on the war path, attempting to garner some support for this bill. Its a no-brainer on how much this legistlation, if successful in building a Hub, would benefit ancillary businesses such as Real Estate. I personally know many people buying long term positions in real estate in Hazelwood and Florissant in anticipation of the passing of this bill.
I'm going to completely go against the typical defeatist/"Show-Me" Missouri mind-set with this statement: Missouri passes this bill. That said, keep up the pressure, keep sending messages to the Legislature.
It still unbelievable to me that both houses agree on at least the $60 million dollar tax credit. Both houses are controlled by the Republicans. And they still can't seem to find a way to pass even that portion of the China Hub bill.
It reminds me of the old Woody Allen joke about being kidnapped as child. His parents got a ransom note, but his Dad had bad reading habits and took the note to bed with him, but fell asleep after reading the first half of it.
Do they not sense any urgency or opportunity here, or do they just have bad law passing habits?
Good news. Honestly, I expected it all to die yesterday.
It's important, however, that the bill includes more than just the $60 million for freight forwarders. Moreover, the General Assembly should pass some version of the original Aerotropolis bill designed to encourage the construction of facilities.
Contrary to the assertions of the Show-Me Institute, existing facilities are woefully inadequate to support a thriving trade hub. Disingenuously, they have asserted that there is 18 million square feet of existing warehouse space surrounding Lambert. However, this figure represents all of the existing warehouse space in Metro St. Louis, including Illinois. In reality, the warehouse vacancy rate in StL is significantly lower than the national average. Furthermore, using the word “warehouse” serves to create unnecessary ambiguity and controversy. Let’s be clear; vacant warehouses that serve as little more than crackhouses don’t count. We specifically need facilities that can support cold-chain operations and other business activity directly related to the trade hub. There is absolutely no question that we lack such facilities.
Currently, beyond the freight forwarder credits, it looks like only BUILD is on the table. However, in the words of my source, who has been directly involved in negotiations from the beginning, "Shanghai doesn't understand BUILD." As the bill needs to both mitigate risk for the American cargo industry and provide Shanghai with assurance that necessary infrastructure will eventually materialize, Shanghai's understanding of BUILD is an overriding consideration. They might come around, so it would be better to have BUILD than have nothing, but Aerotropolis is clearly superior to BUILD. Legislators need to consider the perspectives of parties outside of the halls of the Capitol. A good first step would be to actually engage people who have actually been directly negotiating with the Chinese. This apparently hasn't happened during special session.
The Chinese are skeptical of BUILD because it apparently ties tax credits to job creation and salaries paid to workers. Shanghai doesn't understand why someone would spend more on labor costs in order to receive a tax credit. BUILD is driven more by political motivations than economic realities. Such incentives might work in rural Missouri, but it's not suited to urban, high-density development. Politics aside, although it is admirable to work toward providing an abundance of relatively high-paying jobs, the reality is that no jobs will result if this doesn't make sense to Shanghai.
Additionally, Aerotropolis, unlike BUILD, is heavily back-loaded, which both suits the pace of development of hub operations and ensures that the bulk of the credits wouldn't be disbursed until taxpayers are in a better position to judge the merits of the initiative. BUILD disburses the bulk of potential credits upfront.
Also, Aerotropolis was designed to specifically target business activity necessary to support hub operations. BUILD is more of a general jobs bill. As such, it casts a wider net that has a much greater potential to provide credits to existing business activity wholly unrelated to the trade hub. Beyond diminishing taxpayer protections by potentially adversely affecting existing revenue streams, such businesses might exhaust much of the available credits before parties necessary for the development of a trade hub are in a position to fully take advantage of the incentives. The bill needs to be more tailored to the targeted business activity, both in terms of the timeline within which developments will unfold and the scope of business activity eligible for credits.
BUILD also gives Nixon significant discretion in disbursing tax credits. Unlike BUILD, which vests authority in the Nixon controlled MDED, Aerotropolis awards credits based on clearly defined, objective criteria. As such, there is no "kingmaker" provision in Aerotropolis. It's my sense that this is why Nixon is pushing BUILD.
Basically, barring a miracle, a bill only including $60 million in freight forwarding credits would fail in its essential purpose, which is to create a trade hub. Moreover, the original Aerotropolis credits designed to encourage the development of facilities is far superior to BUILD. As such, we should encourage legislators to reconsider the original legislation. Although it might not be practical to reinstate the full $300 million over 15 years, maybe we could work toward a compromise that keeps the substance of the bill but limits the duration of the incentives. The original consensus related to Aerotropolis, not BUILD. Let's get back to this original agreement. Let's get back to the bill that would provide Shanghai with the assurances they need.
"I don't see a solution," said Dan Mehan, president of the Missouri Chamber of Commerce & Industry. "And that's very frustrating.""
Also, this comment from what I take was yesterday's Realtors event mentioned upthread is interesting:
robert-s-63134 said on: October 12, 2011, 7:28 pm
I spent the morning listening to presentations on the China Hub. Interestingly, there were no overt pitches for the tax credit proposal. (Those came from members of the audience.) I also have to say that the current airport director is a huge improvement over Leonard Griggs in terms of character. That being said, after hearing some numbers, I became more convinced that whatever the intrinsic merits of the China Hub the airport needs this development as part of a survival program. Indeed, the China Hub if it lives up to full potential, still might be insufficient to save the airport from serious future financial trouble. The director was as realistic as I've heard anyone in regards to passenger traffic improving--don't expect it to happen. It just won't happen so the bet is on the hub.
On a more optimistic note, there's this from the ^article:
"...A chamber-sponsored group of about 60 Missourians - including Sen. Jay Wasson, R-Nixa, and Rep. Todd Richardson, R-Poplar Bluff -- is touring China this week.
Nixon plans a China trip later this month, reportedly leaving around Oct. 21...
Mehan will join Nixon's delegation. Asked whether the bill's failure could prove awkward for those on the trip, Mehan said, "Potentially. But there are other things going on on that trip that will have very positive outcomes for the state of Missouri, whether this bill passes or not. We don't crawl into our shell. There's a vibrant exporting opportunity."
With regard to the above post, Nixon has no idea what the hell he is doing. Shanghai thinks his BUILD proposal is just about the dumbest thing they've ever read. His MDED was also the the entity that signed off on the Mamtek debacle. He probably just wants another free trip to check out the Summer Palace in Beijing.
"I don't see a solution," said Dan Mehan, president of the Missouri Chamber of Commerce & Industry. "And that's very frustrating.""
Also, this comment from what I take was yesterday's Realtors event mentioned upthread is interesting:
robert-s-63134 said on: October 12, 2011, 7:28 pm
I spent the morning listening to presentations on the China Hub. Interestingly, there were no overt pitches for the tax credit proposal. (Those came from members of the audience.) I also have to say that the current airport director is a huge improvement over Leonard Griggs in terms of character. That being said, after hearing some numbers, I became more convinced that whatever the intrinsic merits of the China Hub the airport needs this development as part of a survival program. Indeed, the China Hub if it lives up to full potential, still might be insufficient to save the airport from serious future financial trouble. The director was as realistic as I've heard anyone in regards to passenger traffic improving--don't expect it to happen. It just won't happen so the bet is on the hub.
Good lord! It was looking good for you three posts ago. Now its looking bleak? Nothing changed! C'mon, man! Everyone would do well to table their "Show-me" attitude for a moment and get off the roller coaster.
The Post is putting their own spin on things to keep readership up.
Some of the Legislature et al is touring China this week, per the linked article (even though the title of the article would imply something different). I can't imagine we have a decision on Aerotropolis until these folks get back from the Orient. Furthermore, do we need to have a decision this week? Is their a deadline of some sort? This is a huge decision for Missouri; we need to let nature take its course instead of trying to read too far into the three line articles the post reports everyday.
Again, keep writing the Legislature. Please continue to share with them your feelings on the passage of the full bill.
Frankly, I'm surprised more Republicans aren't on board with this. We're effectively providing an incentived low-tax environment for specific businesses to thrive. Its the same thing as providing a tax break on the back end for a successful logistics company.
What's changed for me is having a few email exchanges last night with one of the guys at the very center of this initiative. Things are looking bleak, to say the least. I agree, however, that people should keep pressuring legislators.
What needs to happen is that the General Assembly has to pass a bill that includes original Aerotropolis incentives designed to attract companies that will operate air cargo facilities. Rural legislators, fancying themselves international trade experts, think that the $60 million alone or the $60 million plus BUILD will suffice. The Chinese, however, have reportedly made it clear that they will not move forward absent credits for facilities, and Shanghai has said that they literally don't understand BUILD. I suppose they might come around, so I guess BUILD is better than nothing, but the chances of that happening are pretty slim. With the exception of Senator Schmitt, people in Jeff City have made no effort to listen to the people who have actually negotiated with the Chinese. As such, they have no idea what they are doing. It's all for show right now. One group of egos fighting another.
After laying low for a while, The American is back with an insightful piece on the sausage making that killed Aerotropolis: http://www.stlamerican.com/news/politic ... 03286.html
Nixon scored some serious political points here. Although he likely won't get to expand his authority over tax incentives by increasing available credits under BUILD (credits under BUILD are disbursed at the discretion of MDED, which has been staffed by Nixon loyalists), he's accomplished everything else he set out to accomplish by calling the special session.
