NGA project could cost city and state $130 million
The city of St. Louis is estimating it will cost $130 million to bring the National Geospatial-Intelligence Agency to the north side.
The figure was released Wednesday during a meeting of the Board of Aldermen’s Housing, Urban Development and Zoning committee. That money would come primarily from city and state sources, although those were not made public.
The committee is considering a board bill to authorize a $20 million loan to help the city acquire land within the NGA footprint. That vote was delayed when several members asked for a cost benefit analysis of the entire project.
The total cost came out during an exchange between Alderman Antonio French and St. Louis Development Corporation executive director Otis Williams.
French: How much is this going to cost us?
Williams: So currently we have in the total sources $130 million.
French: $130 million. Now that includes the money the state is putting in?
Williams: Yes, everything.
French: And that is to retain how much in earnings tax? Because the only revenue we get from the NGA is earnings tax.
Williams: Currently with 3,100 employees, it’s $2.4 million.
Half of those earnings taxes would be used to help offset the costs of bringing the NGA to north city if the federal agency chooses the site next year.
Williams said the state of Missouri currently gets $8.5 million in withholding taxes from NGA employees, as well. Governor Jay Nixon signed a bill this week that would allow the state to give to the city half of those withholding taxes to help pay for the project, if the NGA chooses the north city site.
Other aldermen expressed concerns about taking out a loan to help pay for the property within the proposed site. The bill, sponsored by 5th Ward Alderwoman Tammika Hubbard, would use the city’s building at 1520 Market Street as collateral, rather than three buildings as indicated in the bill.
Cara Spencer, the alderwoman from the 20th Ward, said it’s important to keep the NGA in the city. But she said she’s concerned about taking out a loan without a plan to repay it if the federal agency goes outside the city.
"What concerns me is taking out a loan without a secured revenue stream to repay it, and I want to make sure that we’ve thought through this and it doesn’t have to come out of a general revenue," Spencer said.
The $20 million loan would actually use only $13 million to acquire property within the NGA site. St. Louis Municipal Finance Corporation president Ivy Pinkston said $6.6 million is still owed on the 1520 building and would be refinanced as part of the loan.
The committee went into closed executive session for more than hour to discuss real estate involved with the NGA project. When the meeting opened again, committee chairman Joe Roddy said it would take the loan measure up again on Friday.
French told St. Louis Public Radio several members of the committee had asked for a financial analysis of the entire project.
"We now know that the total project may cost up to $130 million, so there’s been a request to really see what the benefit will be versus the total cost," French said. "What we know is there’s a certain amount where it just doesn’t make any sense any more, whether that’s $100 million or $250 million, we don’t know that yet."
The St. Louis Development Corporation's Otis Williams has estimated it will cost $10-12 million to buy out home owners and relocate them and at least another $25 million to acquire property from businesses. Part of the cost will be in buying out developer Paul McKee, who owns more than half of the parcels in the site.
Some of McKee's land was put on the auction block Tuesday and sold to Kansas entity Titan Fish Two for $3.2 million. It's not yet clear what that will mean for the city's efforts to buy the land, although the mayor's office has said they will continue acquiring the land, no matter the owner.
Williams said the SLDC will provide the cost benefit analysis of the project to committee members by Friday. The committee will reconvene Friday morning at 8:30 to take up the loan measure again.
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