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BJC, CORTEX minority goals questioned

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Posted: Thursday, October 11, 2012 12:05 am | Updated: 11:01 am, Wed Oct 24, 2012.

News update: The public hearing for the CORTEX TIF application will be held on Oct. 30, not Oct. 31 as stated in the TIF application, at 8 a.m. at the St. Louis Development Corporation,1520 Market St., Suite 2000.
 

The new BJC Administration building and future projects in the CORTEX research park will shoot for a goal of employing 15 percent minority and women workers on the proposed $2.2 billion phase of CORTEX construction, said project leaders at an Oct. 4 minority and women business outreach event. 

Fifteen percent marks the lowest goal for putting minorities and women to work on a St. Louis City project of this scale in the last several years.

The $19-million O’Fallon Park Recreation Center in North St. Louis City put 33 percent minority workers and four percent women to work. The Metropolitan Sewer District is aiming for 25 percent minority and 6.9 percent women workforce goals (on projects $500,000 or more) on its upcoming $4.7 billion projects.

In 2009, the city passed an ordinance (68412), which sets forth workforce goals on city-funded public works contracts of 25 percent minority, five percent women, 20 percent local workforce and 15 percent apprentices.

Although CORTEX leaders do not plan to follow the city’s workforce goals, Sandra Marks, who was recently selected as the BJC project’s diversity consultant, said the BJC administration building and all CORTEX projects will mirror the city’s goals on the business side. The projects will follow to the mayor’s executive order (#28) goals of hiring 25 percent minority business enterprises (MBEs) and 5 percent women business enterprises (WBEs).

 

Tiff in public financing

On Oct. 31, CORTEX CEO Dennis Lower will ask the Tax Increment Finance (TIF) Commission at a public hearing for $157 million in public financing for the proposed $2.2 billion project – which is expected to take 25 years to develop. Several city officials believe that if CORTEX, a private research park in the Central West End, wants public tax financing, they should also have to follow the city ordinance 68412 (also referred to as Board Bill 75) and promote diversity on its large development projects.

“The CORTEX Project has been riffed with controversy regarding land acquisition issues, and it would seem that not adopting Board Bill 75 is yet another poor example for CORTEX, setting a negative tone,” said City of St. Louis Comptroller Darlene Green.

The TIF Commission has the ability to make a condition that in order to receive the city’s assistance, an applicant must abide by any city law. One agency that could have significant influence on the commission’s decision to apply this condition is the St. Louis Development Corporation, which is the economic development agency for the City of St. Louis.

In an interview with the corporation’s executive director Rodney Crim, who was appointed by Mayor Francis G. Slay, Crim did not indicate whether he would encourage the TIF Commission to apply this condition.

When asked if he believed CORTEX should adopt the city’s workforce ordinance on its projects, just as it did the city’s MBE/WBE goals, he said, “I think that using that framework to have the discussion is a good place to start. Where it ends is based on our discussions for a non-public-service entity.”

When asked if he believes the city’s goals are attainable on this project, Crim said he did not know.

 

City leaders defend goals

Board of Alderman President Lewis Reed said his office will be sending a letter to the project leaders this week asking them to increase their minority workforce participation goals on the project.

“This mayor and his appointees have not made minority participation a priority for the city of St. Louis,” said Reed, who recently announced his candidacy for mayor, “and as a result, after nearly 12 years in office, has not increased capacity among the city's minority contractors so that there would never even be a question about whether fair goals on public projects are attainable.”

Michael Holmes, executive director of SLATE and who is charged with helping St. Louis residents find jobs, said he fully stands behind the city ordinance.

He said if the TIF Commission asks his opinion about CORTEX adopting the ordinance, he will say, “We have a workforce bill in place. If you can’t meet this, then explain why you can’t.”

Holmes, who is also appointed by the mayor, said he sat down with CORTEX leaders and gave them a copy of the ordinance weeks ago.

Marks emphasized that the 15 percent goal is a minimum. “We are getting a lot of pressure from the city to adopt Board Bill 75,” she said. “We are evaluating what has been achieved on other city projects.”

CORTEX is a non-profit biosciences district, founded by BJC Healthcare, Missouri Botanical Garden, Saint Louis University and Washington University. Lower said CORTEX will soon “finalize how best to advance workforce participation objectives” on the next phases of development.

“Research parks are developed over decades and not years,” he said. “Sustained development of CORTEX will bring significant construction and permanent job opportunities to the city.”

Alderman Terry Kennedy, who sponsored Board Bill 75 in 2009, said CORTEX is not legally bound to follow the ordinance because it is not a “public works” or civic project.

“However, it would be a good gesture and recognition of the public support that is coming to them,” Kennedy said. “It would be a good gesture for them to reciprocate.”

 

Tax dollars from the community

Yaphett El-Amin, executive director of the minority business advocacy group MOKAN, said her organization is not happy about the 15 percent combined workforce goals.

“At a minimum we should see at least a 25 percent workforce goal, being in the heart of the city,” she said. “The TIF would be taking dollars away from our school districts, so you have to see the dollars get fed back into the community in some way.”

Technically with a TIF, school districts don’t lose any taxes, but they don’t gain any either – at least not for the 23 years that the developers have to pay the bond.

A TIF is a tool for developing blighted areas, which involves capturing a certain amount of revenue from taxes when property value and sales goes up — rather than actually raising property or sales taxes.

For example, say a person owns a $20,000 house and about 60 percent of the owner’s property taxes go toward the school district. If a redeveloper comes in and rehabs the neighborhood and that property value goes up to $100,000, then schools will still only receive the amount of taxes on a $20,000 house. The other taxes go towards paying the development debt. For up to 23 years, school districts won’t get any additional funding from property taxes.

El-Amin said MOKAN will ask Mayor Slay to encourage his appointees to encourage project leaders to adopt the city ordinance – not only on CORTEX projects but other TIF-funded projects as well.

“We plan to appeal to the TIF Commissioners,” she said. “The school board has two commissioners and one of those is Roger Casey and he has been a champion for minority workforce participation.”

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