On May 13,
the last day of Missouri’s 2011 legislative session, the so-called
“Aerotropolis” proposal died when legislators couldn’t resolve
their differences on tax credit reforms to a larger economic
development bill. Aerotropolis had been bundled as part of that
development package.
“font-size: 9.0pt; font-family: Verdana;”>Advocates of Aerotropolis claim its tax incentives would spur the creation of 23,000 construction jobs and 13,800 new permanent full-time jobs.
“font-size: 9.0pt; font-family: Verdana;”>They also say it would put St. Louis in a better bargaining position to attract major new cargo and passenger landings at the airport, which could attract other kinds of business development by making Lambert a more accessible and competitive air hub.
“font-size: 9.0pt; font-family: Verdana;”>For any of this to be possible, legislators need to come to a resolution soon, said Republican state Sen. Eric Schmitt, who sponsored the legislation in the Missouri Senate.
“font-size: 9.0pt; font-family: Verdana;”>“It’s time for us to act,” he said, “to bring this thing home. It’s real. We are well positioned at this moment.”
“font-size: 9.0pt; font-family: Verdana;”>For legislators to act now, Gov. Jay Nixon would need to call a special session of the Legislature. Will he?
“font-size: 9.0pt; font-family: Verdana;”>According to Scott Holste, the governor’s press secretary, special sessions should be reserved for significant issues of immediate importance.
“font-size: 9.0pt; font-family: Verdana;”>“That’s the standard we will use in determining whether a special session would be appropriate on this or any issue,” Holste said.
“mso-spacerun: yes;”>
“font-size: 9.0pt; font-family: Verdana;”>The St. Louis Regional Chamber & Growth Association claims Aerotropolis is of “immediate importance.”
“font-size: 9.0pt; font-family: Verdana;”>Mike Jones, chairman of the Midwest China Hub Commission, said if the governor or Legislature does not force a special session, a year will be lost.
“font-size: 9.0pt; font-family: Verdana;”>“The session starts in January, but nothing gets done until May,” Jones said. “That may as well be forever.”
“font-size: 9.0pt; font-family: Verdana;”>The sense of urgency comes from the commission’s ongoing bargaining with China over a deal to bring major new cargo freight to St. Louis.
“font-size: 9.0pt; font-family: Verdana;”>“We have unique opportunity, and not just because the world’s largest trading partner is at the table,” Schmitt said. “This is our offer sheet to the world.”
“font-size: 9.0pt; font-family: Verdana;”>Other countries, including South Africa, have started making inquiries as well.
“font-size: 9.0pt; font-family: Verdana;”>“We could miss out on a huge opportunity to increase our footprint globally and what domino effect an increasing global footprint would mean for our ability to export Missouri goods,” said state Rep. Tishaura Jones, assistant minority floor leader.
“font-size: 9.0pt; font-family: Verdana;”>“The real question,” Mike Jones said, “is: how can we take that opportunity and develop it into something transformational for the region and state?”
“mso-bidi-font-weight: normal;”>
“font-size: 9.0pt; font-family: Verdana;”>‘A new urban form’ “font-family: Verdana;”>
“font-size: 9.0pt; font-family: Verdana;”>To get a grasp of the Aerotropolis bill, it’s helpful to understand the term. John D. Kasarda, the director of the Kenan Institute of Private Enterprise at the University of North Carolina at Chapel Hill, coined the term. Kasarda
Aerotropolis as “a new type of urban form comprising
aviation-intensive businesses and related enterprises extending as
far as 60 miles from the inner clusters of hotel, offices,
distribution and logistics facilities.”
“font-size: 9.0pt; font-family: Verdana;”>The Missouri legislation was crafted to offer tax incentives for development needed to turn the low-performing Lambert into such a hub.
“font-size: 9.0pt; font-family: Verdana;”>Breaking down the incentives in the Missouri bill, $60 million would go towards tax breaks on freight weight. This would encourage freight forwarders or “travel agents of air cargo” to move exports through St. Louis, rather than a busier freight airport like Chicago.
“font-size: 9.0pt; font-family: Verdana;”>Then over 15 years, $300 million would go towards building hub-related facilities, including warehouses and assembly plants.
“font-size: 9.0pt; font-family: Verdana;”>The incentives would generate a minimum of nearly $22 billion in net new economic output for the region and state over the 15-year term of the incentives, according to an economic impact analysis conducted by Biggins Lacy and Shapiro of Princeton, N.J. and Institute St. Onge, the York, PA-based international logistics advisory firm.
“font-size: 9.0pt; font-family: Verdana;”>Mike Jones – who has held a wide range of policy positions in St. Louis city and county – has long argued that job creation and economic development in the African-American community is much more likely when the overall regional economy is expanding.
“font-size: 9.0pt; font-family: Verdana;”>“And in Aerotropolis, we are talking about construction, warehousing and assemblage jobs where African Americans will be able to compete for these jobs,” Mike Jones said. “font-family: Verdana;”>
“mso-bidi-font-weight: normal;”>
“font-size: 9.0pt; font-family: Verdana;”>Unseating Chicago “font-family: Verdana;”>
“font-size: 9.0pt; font-family: Verdana;”>“Chicago is the incumbent, and this legislation is meant to unseat the incumbent,” Schmitt said.
“font-size: 9.0pt; font-family: Verdana;”>Chicago
airport hub is built out, with little room to expand, he said. Air
cargo is growing fast, he said. And being the point of
consolidation for goods would be prosperous for St.
Louis.
“font-size: 9.0pt; font-family: Verdana;”>Opponents say that Chicago O’Hare hosts international gateway operations for numerous Asian, European and Latin American passenger carriers, as well as the freighter operations for these airlines.
“font-size: 9.0pt; font-family: Verdana;”>Proponents counter that tax breaks would bring more landings to Lambert, and more landings would enable the airport to decrease landing fees. This in turn would attract new passenger carriers, making St. Louis more competitive with cities like Chicago.
“font-size: 9.0pt; font-family: Verdana;”>Schmitt said historically St. Louis leaders have let many regional development opportunities go to other cities. St. Louis had the opportunity to become the region’s railway center for goods in the 1860s, but leaders hesitated and Chicago seized the chance.
“font-size: 9.0pt; font-family: Verdana;”>Legislators missed their chance during the session because of Republican infighting between the two houses.
“font-size: 9.0pt; font-family: Verdana;”>“The House position on tax credits was not nearly as stringent in rolling back caps on tax credit programs,” said Tishaura Jones, explaining the failure of the economic development bill.
“font-size: 9.0pt; font-family: Verdana;”>Now some legislators want another chance.
“font-size: 9.0pt; font-family: Verdana;”>“I’m tired of reminiscing on the 1904 World’s Fair,” said Schmitt, who represents southeastern St. Louis County in the Legislature.
“font-size: 9.0pt; font-family: Verdana;”>“Now is the time for leaders to be leaders. I think we can make a difference and really have an opportunity for job growth that we haven’t had for a while.”