China Hub: Legislative Leaders Reach Economic Development Compromise

The announcement came after the chairman of a commission trying to steer Chinese cargo to Lambert-St. Louis International Airport briefed members of the St. Louis County Council on Tuesday in Clayton.

A proposed Missouri economic development package announced Wednesday includes incentives to create a China hub at the St. Louis airport.

At a news conference at Lambert-St. Louis International Airport, state legislators, business officials and local politicians extolled a plan that would include $360 million worth of tax credits to foster creation of a China hub for the region. An effort to send such a measure to Gov. Jay Nixon .

The news of a legislative breakthrough came one day after the chairman of a board trying to steer the China hub to Lambert-St. Louis International Airport said at a Clayton meeting that he is optimistic about legislative incentives passing later this year.

St. Louisans and Missouri legislators react to economic development package

"This compromise brings us a big step toward realizing our ambition of making this airport the international cargo hub we all know it can and should be," said St. Louis City Mayor Francis Slay on Wednesday at the airport.

St. Louis County Executive Charlie Dooley said the incentives would be a “game changer” for the region.

“It’s actually about jobs and opportunity, how we move our community forward,” Dooley said.

The economic development package would also include incentives aimed at luring high-tech jobs and national sporting events to Missouri. It would also feature reductions to the popular historic preservation tax credit, which has been used in St. Louis to revitalize old buildings.

Nixon’s office issued a news release Monday stating that he will make a “major economic development” this week. The Associated Press reported Wednesday that the governor will call legislators back into special session for the economic development bill.

House Speaker Steve Tilley, R-Perryville, and Senate President Pro Tem Rob Mayer, R-Dexter, both said during the news conference that they will discuss with Nixon the issue of calling the legislature into special session to pass the package.

China hub discussed at Clayton meeting

Mike Jones, the chairman of the Midwest China Hub Commission, provided an update Tuesday to members of the St. Louis County Council at the entity's Committe of the Whole meeting. The group has been trying to cement a China hub deal for several years, arguing the move could be transformational for the St. Louis region and the beleaguered airport.  

“Over the last three years, we’ve made extraordinary progress,” Jones said. “This started out as a dream that kind of got confined to an idea that is now in the final stages of actually possibly becoming a deal.”

Jones said there is a sense of optimism that the legislature will go back into session in the fall and pass an economic development bill that includes the China hub incentives.

“I understand and have it on very good authority that the House and Senate leadership have been meeting on their outstanding issues ever since the session ended,” Jones said. “They have every hope—as well as the governor—that they’re going to solve those issues so that no later than the veto session.”

Dooley 'very hopeful' bill will pass this year

Tilley said Wednesday that he had been talking with Mayer since the session ended to reach a deal.

"This is an important day for us," Tilley said. "Our state has some troubles. We've got budget deficits. We've got 100,000 fewer Missourians who are working than three years ago. We have an unemployment rate that is at or above the national average. We've got some real challenges. But those challenges need leadership. And this is a group of people that I'm proud to stand before that took that leadership seriously."

Asked if an economic development bill will pass this year with China hub incentives, Dooley told reporters on Tuesday that he “is very hopeful.”

“I think it’s in all of our best interests that we do something with the Midwest China hub that would be successful,” Dooley said.

Governor weighs in

Nixon announced in a letter Tuesday that he will be traveling to China later this year. Dooley said he is not planning to attend that trip.

Earlier in the month, Nixon invited legislative leaders to discuss the economic development package. The top two Republicans in the General Assembly— Tilley and Dexter—effectively rebuffed the invitation, saying lawmakers needed more time to hammer out a deal.

At a bill-signing in St. Louis City last week, Nixon said he was confident lawmakers would compromise.

“We’re working hard with lots of folks both in the business community as well as in the legislative branch to see if there’s ways to come to agreement,” Nixon said. “Those are complicated issues that require a lot of work. You’ve got an economic development side, you’ve got the how-to-pay-for-it side on tax-credit reform.”

“It was obviously a complicated rubric that didn’t get done in the regular session,” Nixon added. “So we are spending a fair amount of time to try and see if, in a cost-effective and efficient way, we can move forward on that.”

Lawmaker has misgivings about proposed tax-credit reductions

At least one lawmaker who attended the news conference expressed misgivings about some existing tax credits that could be reduced under the plan.

"I think Speaker Tilley is a very fine leader, he does a good job from his point of view" said Rep. Rory Ellinger, D-University City. "But as a progressive, I want to make sure that this is not being done at the expense of low-income St. Louisians or Missourians. They are really hurting."

Ellinger said he would have liked to see a discussion of options involving increased revenue. He pointed to the state's tobacco tax as an example.

"If we raise it by 78 cents, we'll get over $100 million a year," Ellinger said.

Where does Hazelwood fit in?

David Cox, the City of Hazelwood's economic development director, said in a previous interview that the China Hub would not have a great impact on Hazelwood initially. But over time, he said he was hopeful it could be one of the biggest development deals for the city.

“We’ve got Hazelwood Logistics Center, Aviator Business Park and lot of warehouse storage space,” he said. “A lot of initial processing would be done on the airport site, but there is limited space there. That’s where we would come in with cargo unloading and warehouse storage in Hazelwood.”

The is positioned between interstates 270 and 170, sits on a train line and abuts the airport making it an ideal area for shipping and freight. Tim Davidson, Hazelwood’s communications director, said the city followed the Northwest Chamber of Commerce's lead last month, and drafted a letter to the Missouri legislature requesting legislative talks and an emergency session in order to pass some sort of China Hub tax incentives agreement.

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