Missouri

Reinsurance Group of America Breaks Ground on $140M Headquarters

Reinsurance Group of America (NYSE: RGA), one of the world’s largest life reinsurance companies, broke ground for its $140 million global headquarters in Chesterfield, Missouri.

RGA

Photo – RGA/wikipedia

The company has committed to adding 300 new jobs over the next five years as moving into the new 405,000-square-foot facility facilitates RGA’s growth.

The plan to build a global headquarters and add 300 jobs was first announced in November last year. In order to secure RGA’s relocation and expansion project, St. Louis County offered the company a 50 percent property tax and personal property tax abatement.

In addition to the local incentives, the company is eligible for state tax incentives worth $10.5 million, based on its commitment to create 300 new jobs and invest $140 million.

The incentives offered will not only create new jobs, but also save the 800 existing RGA jobs in the St. Louis region, most of which are located at the existing leased offices in Chesterfield.

The new 17-acre site for the global headquarters across from Chesterfield City Hall is just a couple of miles away, and construction of the two five-story office buildings, connecting two-story atrium lobby, parking garage and other infrastructure is expected to be completed by the end of next year.

Although the current design calls for development of 405,000 square feet, the site can accommodate future expansions to add more space up to a total of 650,000 square feet.

Missouri Governor Jay Nixon said it was always exciting to see companies that have already been located in the state for a long time make more investments. He added that RGA’s expansion was more evidence that efforts to foster a stable and pro-business environment were paying off.

RGA reinsures life insurance policies sold by insurers, and is a Fortune 500 company with 1,655 employees located across 25 countries. As of the end of last year, the company had assets worth $40.4 billion and had life reinsurance worth $2.9 trillion in force. RGA generated revenues worth $9.8 billion last year.

Monsanto Announces $400M R&D Expansion in Chesterfield, MO

Creve Coeur, Missouri-based bioscience and sustainable agriculture company Monsanto (NYSE: MON) announced that it is planning to consolidate its St. Louis-based R&D operations onto a single campus, which will require a $400 million expansion of its Chesterfield research facility.

Monsanto

Photo – Monsanto/wikipedia

The expansion will create 675 new high-paying jobs, in addition to 700 construction jobs. The 1.5 million-square-foot Chesterfield Village Research Center already has 1,000 employees.

Apart from the new research building, the expansion also involves the construction of 250 laboratories and 36 greenhouses, in addition to other plant growth chambers that can be set to climates from different parts of the world.

The existing site already has 250 labs, greenhouses over two acres, and 122 plant growth chambers. Once this expansion is complete, labs currently located in the headquarters in Creve Coeur will be moved to Chesterfield, freeing up more space for other uses.

The building, which is expected to be LEED certified, should be complete and ready for occupation by 2017.

Gov. Jay Nixon said in a statement that the major investment by Monsanto and the hundreds of high-tech and high-paying jobs further establishes Missouri as a powerhouse in the biotech sector.

Jerry Steiner, executive vice president, sustainability and corporate affairs at Monsanto, said the expansion ensures that the company’s researchers would have the facilities required to come up with the next generation of agricultural products.

St. Louis County Executive Charlie Doole said that Monsanto had turned into a magnet for attracting some of the world’s leading scientists to the region, and this new expansion would have a huge impact on the local economy.

Monsanto considered other locations, but their long relationship with the state (founded in St. Louis in 1901) coupled with the county’s plan to provide $22 million in tax breaks for Monsanto sealed the deal.

The Missouri Development Finance Board has been asked to provide Build Missouri bonds worth $9.5 million, and the company also qualifies for $22 million in tax credits under the Quality Jobs program.

Monsanto generated $13.5 billion in revenues last year, and the company has around 22,000 employees all over the world.

Good Jobs First Report – The Job Creation Shell Game

The Washington, D.C.-based non-profit Good Jobs First has released a report which says that state and local governments are wasting billions of economic development dollars each year on getting companies to relocate, instead of focusing on the creating completely new jobs.

Good Jobs First Report – The Job Creation Shell Game

Good Jobs First Report – The Job Creation Shell Game (photo – goodjobsfirst.org)

The report, titled “The Job-Creation Shell Game,” details case studies and provides recommendations for solutions on the state and federal levels to stop what they call “interstate job fraud.”

“What was long ago dubbed a second war between the states is, unfortunately, raging again in many parts of the country,” said Greg LeRoy, executive director of Good Jobs First and principal author of the report. “The result is a vast waste of taxpayer funds, paying for the geographic reshuffling of existing jobs rather than new business activity. By pretending that these jobs are new, public officials and the recipient companies engage in what amounts to interstate job fraud.”

The case studies include the Kansas City metro area, where companies have been getting eight-figure subsidy packages to move from the Missouri side to Kansas, or vice versa.

The report authors call Georgia the Poach State, which stunned officials in Ohio by successfully luring the headquarters of NCR from Dayton, where the company had been based for 125 years.

According to the report, Mississippi is poaching jobs from Memphis, TN, while Tennessee created a new subsidy program to lure the North American headquarters of Nissan from California.

The 16 counties in North Carolina and South Carolina are poaching from each other, and Illinois is being blackmailed by Sears Holding Corp., which has continued to shed jobs despite getting a second nine-figure retention deal from Illinois.

“The costs are high and the benefits are low, since a tiny number of companies get huge subsidies for moving what amounts to an insignificant number of jobs,” added LeRoy. “The flip side is job blackmail: the availability of relocation subsidies makes it possible for companies that have no intention of moving to extract payoffs from their home states to stay put.”

The report lists the largest relocation subsidies provided ever, with the $275 million Sears got last year to stay put in Illinois at the top of the list. The second one is Prudential Insurance, which got $250 million from New Jersey in 2011, also to stay put. The third one is Nissan, which got $244 million in 2005 from Tennessee to move its headquarters from Gardena, California to Nashville.

The report does say that as many as 40 states have clamped down on this by making some incentive programs unavailable for jobs that are being moved around in-state. The report also recommends that states end their business recruitment activities that are explicitly designed to pirate existing jobs from other states.

It also suggests the federal government should reserve a small portion of its economic development aid for those states that amend their incentive codes to make existing jobs ineligible for subsidies and certify that they no longer engage in interstate job poaching.

Read the full Job Creation Shell Game report by Good Jobs First – Download (pdf)

Construction Design Firm Clayco Relocating HQ from St. Louis to Chicago

Clayco, Inc. announced that the company will be moving its national headquarters to downtown Chicago, Illinois from St. Louis, Missouri.

Clayco

Photo – claycorp.com

The company already has 280 employees in the Chicago office and the field, and expects to nearly double that Chicago number in the next couple of years, adding new architects, designers and project managers.

“Clayco is exactly the sort of company we are looking to attract to Chicago,” said Chicago Mayor Rahm Emanuel. “I am committed to bringing new and technologically advanced businesses to Chicago, especially those that want to grow and expand their businesses, and Clayco is exactly this sort of firm. I look forward to partnering with them as they make Chicago their new home.”

The new headquarters will be on the 13th and 27th floors (30,000 square feet) of the 35 E. Wacker building, also known as the Jewelers Building, in the heart of Chicago’s loop.

The company has relocated all of its Oakbrook Terrace employees downtown but plans to keep its St. Louis office intact where key projects continue and Clayco has just signed a 15-year lease. Accounting and IT will remain in the St. Louis office and no layoffs will occur as part of this move.

“Clayco is embarking on an exciting period in our company’s history,” said Clayco CEO Robert Clark. “With a record backlog of projects, and increasing travel around the country and the globe, we see Chicago as an integral part of our expansion strategy as we add talent and build Clayco into the nation’s leading full-service real estate development, architecture, engineering and construction firm.”

Clayco, Inc. finances, develops, designs and builds large, complex projects across the nation and is seeking a growing global presence. The 28-year-old company has annual revenues of more than $820 million. Subsidiaries include a full service architecture and design firm, Forum Studio, and Concrete Strategies Inc.

Local clients of Clayco include the University of Illinois, Kraft Foods and Blue Cross Blue Shield.

“On behalf of World Business Chicago, I welcome Clayco and commend the company on its choice of Chicago for their new corporate headquarters,” said World Business Chicago vice chairman Michael Sacks. “We look forward to working with Clayco as it continues to grow and create significant economic opportunity and job growth throughout Chicago.”

Clayco has agreed to work with City Colleges of Chicago as part of the College to Careers program, and will seek to design curriculum that will be useful in training students.

No relocation incentives were asked for by Clayco, and none is being provided by Illinois or the City of Chicago.

Auditors in Missouri Release Report Criticizing Economic Development Department

http://missourisportsmag.com/?p=45316

Auditors in the state of Missouri have released a report in which they criticized the Department of Economic Development.

The report criticized the department for a failed sucralose plant and a lack of oversight. The audit came after a myriad of lawsuits, legislative hearings and criminal charges which ultimately left the sweeteners plant in debt that sums up to approximately $39 million dollars.

The DED was the main focus as they developed an incentive package and approved tax exempt bonds. Bringing back Mamtek to the state of Missouri was important to the leaders around the community.

The agency for the state did not check the claim by Mamtek that it had approximately $7.2 million dollars in cash. As a result, the $40 million dollar plant could not be built.

The DED supported Mamtek as they pinpointed that they received no state incentives. There were also no jobs created within the company. Critic Tom Schweich elaborates on how the Department of Economic Development puts its stamp of approval on a project which ultimately affects other smaller entities. Critic Schweich was asked if he was planning on auditing the city of Moberly for its failed deal with Mamtek. Schweich pinpoints that the city cannot be audited unless it is approved by the local Governor.

The office of Schweich looked at nearly 15 other economic development projects and there were a few other shortcomings.

Some of the shortcomings include:

  1. Failing to complete checklists for research
  2. Authorizing nearly $2.7 million in incentives to a company that had been sued.
  3. Approving nearly $1.3 million in incentives to a particular company whose CEO was on probation for writing bad checks.

The screening process was defended by the DED as one of the companies did not receive any state money. Changes were made to the due diligence process back in the month of February 2011.

Overall, the audit will be a negative factor for the Economic Development Department as they move forward.

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Google Fiber Bumps Into Kansas City Socioeconomic Divide

Back in July, Google opened up registrations for its Google Fiber broadband network in Kansas City, Missouri and Kansas City, Kansas. They divided Kansas City into fiberhoods and set a minimum threshold for providing connectivity. If a fiberhood got enough signups, they would hook up all those who registered with high speed broadband.

Google Fiber, Kansas City

Google Fiber, Kansas City (Photo – Google.com)

The pre-registration period is over and done with, the results are in and Google will soon be setting up the first fiberhoods in both states (Hanover Heights, MO and Crown Center, KS) with their connections.

A close look at which areas got a high number of registrations and which did not get enough signups shows that Google’s attempt to level the playing field by providing broadband has run into a socioeconomic and racial divide in Kansas City.

The western side of the city has mostly met the threshold and then some. But the eastern part of the city on the other side of Troost Avenue is a challenge, with registrations in most neighborhoods falling short of the threshold.

Michael Liimatta of Connecting for Good, a nonprofit working to bring broadband access to low-income residents in Kansas City, told Wired.com that “the white, affluent neighborhoods qualified and the primarily black, lower-income neighborhoods didn’t.”

Google did attempt to address the issue, and even conducted a survey before actually wading into the project. They found that affordability ($70/month) was only part of the problem, and 25 percent of Kansas City residents did not have any kind of internet at home and said they didn’t need it.

Many people who did not have internet or an email account didn’t sign up because the pre-registration process required a Gmail account and a $10 fee to be paid with a credit or debit card. Google sent out 60 employees armed with chromebooks to go door to door and convince people to register, but the signups still ended up following the digital divide.

Google does not want to give up just as yet. “We’re committed to addressing the digital literacy and relevance problem head on,” Jenna Wandres, an associate on the Google Fiber communications team told Time. “We’ll have micro-grants available for community organizations who want to start up digital literacy programs in Kansas City.”

Google is also working with the University of Kansas Medical Center and local public schools to provide them with free broadband. They plan to help pipe advanced placement classes from schools where they are taught to those where they aren’t.

GAO Study – BRT Projects Promote Economic Development

The U.S. Government Accountability Office (GAO) has come up with an in-depth study on how bus rapid transit (BRT) projects that have been federally funded with grants have promoted economic development in addition to improving riders’ experience.

Healthline Cleveland, OH BRT

Healthline Cleveland, OH BRT (Photo – rtahealthline.com)

All 15 of the BRT project sponsors who provided data said that ridership and service had improved as compared to the previous transit system with reduced average travel times of 10 to 35 percent.

Capital costs for BRT projects were generally lower than for rail transit projects. BRT projects accounted for over 50 percent of projects with grant agreements since fiscal year 2005, even though the funding accounted for a small percent of the Federal Transit Administration (FTA) “New, Small, and Very Small Starts” grants.

As per the report, local officials believe that BRT projects are contributing to localized economic development. The economic development part in the report begins on page 37 in the “Overview of Case Study Findings” section.

The GAO visited five case study locations that have implemented a BRT project, including Healthline Cleveland, OH; Franklin EmX, Eugene, OR; Troost MAX, Kansas City, MO; Metro Rapid System, Los Angeles, CA; and RapidRide A Line, Seattle, WA.

In Cleveland, Ohio, officials claim Healthline has contributed to rail-like economic development benefits, with an estimated $4-$5 billion worth of investment in the corridor since the Healthline began operations.

City officials in Eugene, Oregon informed GAO that $100 million worth of construction projects are under way downtown near the Franklin EmX line, including a boutique hotel, office space renovations, and expansions to a community college. The University of Oregon is looking to lease space downtown and there has been developer interest in new student housing.

Kansas City, Missouri has won a $25-million federal grant for urban reinvestment, which is being used for a variety of streetscape improvements within a 150 square block area that includes three Troost MAX stations. According to transit agency staff, the area was chosen for federal investment in part due to its proximity to the BRT.

In Los Angeles, California, metro staff attributed a few development projects to the presence of Metro Rapid lines, but noted that other factors have likely influenced most of the development.

In Seattle, Washington, local officials said that developers are interested in the corridor, in part because of complimentary planned light rail service. In addition, they noted that other BRT corridors in the region are attracting transit-oriented development and that BRT will eventually connect most of the region’s significant growth centers.

The GAO report further delves into what particular aspects of a BRT project can fuel economic development. They came up with three major points, as listed below:-

-         physical BRT features that convey a sense of permanence to developers;

-         major institutional, employment, and activity centers along or near the BRT corridor that can sponsor development projects; and

-         transit-supportive local policies and development incentives.

Read the full GAO study on BRT projects and economic development – Download (pdf)

Google Fiber Kicks Off High-Speed Broadband in Kansas City

The much-hyped and long-awaited Google Fiber broadband network finally kicked off in Kansas City with Google opening up pre-registrations for 170,000 households that qualify for the network across Kansas City in both Kansas and Missouri.

Google Fiber high speed broadband network

Google Fiber high speed broadband network

It was a long-drawn site selection process, with more than 1,100 cities across the US responding to Google’s initial call for a pilot broadband project site. The city of Topeka, KS even changed its name to “Google” for a month to impress the search giant.

“It’s easy to forget how revolutionary high-speed Internet access was in the 1990s. Not only did broadband kill the screeching sound of dial-up, it also spurred innovation, helping to create amazing new services as well as new job opportunities for many thousands of Americans,” said Milo Medin, Google vice president for Access Services, in a blog post on the Google Fiber blog.

You can check out how fast it works at Kansas City’s Google Fiber Space, where you can experience a gigabit first-hand and check out TV in crystal clear high definition.

Customers who sign up now can pre-register by paying a $10 deposit. The actual cost is $70 for the internet and $120 for internet plus television service, with the latter including a new Nexus 7 tablet that you can use as your remote control. You can also get free 5 Mbps broadband connection, but it comes with a $300 construction fee.

Google has divided Kansas City into “fiberhoods” and those fiberhoods that get enough registrations will get the service first. The actual roll-out begins in the fall and all fiberhoods that get enough registrations will have the service active by the end of the year.

Everyone from the United Nations to Site Selection magazine have come up with reports and studies on the use of broadband as a means of economic development.

A UN report published last year by the Broadband Commission for Digital Development urged countries to implement national broadband plans or risk losing the benefits of the global high-speed digital communications. The Commission was set up jointly by UNESCO and the UN International Telecommunications Union (ITU).

The report says – “Developing isolated projects or piecemeal, duplicated networks is not only inefficient, it delays provision of infrastructure that is becoming as crucial in the modern world as roads or electricity supplies.”

Over five billion people in the world have still never experienced even low-speed Internet connections. Google did not say when or how they plan to expand the one gigabit network beyond Kansas City, Kansas and Kansas City, Missouri to other cities or nationwide.

New Economic Super Board Established In Kansas City, Missouri

http://www.advancekc.org/

An economic development super board is being established due to a brand new restructuring plan for the region of Kansas City, Missouri.

The reform plan is called AdvanceKC and would ultimately replace a myriad of economic development agencies into a single super board. The super board will literally enact itself according to the Kansas City Council.

Some of the agencies that will merge include:

  1. DESA
  2. IDA
  3. Port Authority
  4. LCRA
  5. EEZ
  6. PIEA
  7. TIF

Tax incentives programs will also be run by one particular development agency. The Missouri General Assembly also has to approve the development agency and the tax incentive programs.

There are also many benefits to a super board such as:

  1. Eliminating competition between agencies
  2. Clarifying procedures to many businesses and developers
  3. Reducing the tension in politics and agencies such as the Financing Commission

The initiative called AdvanceKC began nearly 2 years ago and was started to effectively organize the economic development projects. The proposal in the past called for the Economic Development Corporation to be brought to City Hall but many of the local leaders did not agree with it. A Councilman named Ed Ford states that it would not have been beneficial to bring the Development Corporation to the City Hall.

After the board rejected the past proposal, Market Street Solutions was paid by the city to conduct a review, hold focus groups and research how Kansas City ranked against other competing cities. The CEO of the Economic Development Corporation elaborates on how the board came up with a goal that would focus upon continuity. CEO Pete Fullerton states that the plan is community based and will continue on even without any administration. There were also other recommendations made in the board meeting.

Overall, the super board is going to be an asset to the region of Kansas City.

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Economic Development Department in Missouri Receives Poor Rating

http://ded.mo.gov/home.aspx

The state of Missouri and its economic development department has unfortunately received a poor rating from the auditors.

According to the auditors, the economic development department overstated the overall benefits of the job incentive program. The department also inadequately verified with businesses to check to see if they were doing what they proposed. The auditor who conducted the investigation was Tom Schweich and the poor rating was finalized for the administration of the job incentive program. The economic development department did not agree with the assessment that the auditor made and rejected any recommendations and conclusions that were suggested.

The audit is now another problem for the state of Missouri as they are currently struggling with the tax credit policies. Some individuals are proposing that existing initiatives be withdrawn while others say that initiatives need to be expanded in particular industries. Spurring job creation is also an important issue that the state of Missouri is also dealing with as the legislature and governor’s office are constantly debating. The quality jobs program focused upon giving grants and breaks to businesses that created a certain number of jobs ranging from 10 to 100. The jobs that were created also paid out average wages and covered health insurance premiums.

The job program was initially created in 2005 as it was signed into law by Governor Matt Blunt and Jay Nixon. All the way up to 2011, the jobs program and the economic development department created nearly 45,646 jobs across the state of Missouri. According to the audit, nearly 40 percent of those supposed jobs created failed to meet minimum thresholds. The auditor states that only 7,176 jobs were actually created under the specific guidelines. Also, the project applications show that nearly 4.9 billion in investment was to be reported but only 1.1 billion was actually documented.

Overall, the economic development department needs to properly organize the way information is reported.

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