Report Finds Cortex Is Stoking St. Louis Regional Economy
In nearly two decades, the Cortex Innovation Community transformed a once-blighted, industrial part of St. Louis’ Central West End neighborhood into a bustling tech haven.
A study of the district released Thursday found Cortex is bringing more money, jobs and development to St. Louis.
Cortex commissioned Ohio-based economic development research firm TEConomy Partners last year to conduct the study, which looked at the tech district’s first 16 years.
The report found that the innovation district has evolved from its early days as a biosciences-focused research campus into a successful innovation district.
It got off the ground in 2002 with an initial $29 million investment from its founders: Washington University, St. Louis University, the University of Missouri-St. Louis, the Missouri Botanical Garden and BJC Healthcare.
Today, BJC Healthcare is the largest single employer at Cortex, with more than 1,000 workers.
The district houses more than 400 companies, including corporations like Microsoft and Boeing, as well as research institutions and startups. Together, they employ nearly 6,000 people.
The report found Cortex is also boosting the regional economy.
Cortex-based economic activity and regional operations generate another roughly 7,300 jobs in the St. Louis region. In 2018, the district spurred more than $2 billion in regional business activity, according to the report.
Otis Williams, head of the St. Louis Development Corporation, said Cortex is a success story that shows how early public funding can pay off in the long run.
“People are coming to St. Louis because of the district, but they’re locating all over the region,” he said. “We see the energy even transferring to downtown, and hopefully we can get some of that energy transferred north and south.”
Investments are paying off
TEConomy’s analysis found that over the past few years, Cortex has generated more than $40 million in net new taxes.
The district has so far used about $100 million of an approved $167.7 million in tax increment financing assistance over a 30-year period starting in 2014.
Hank Webber, chairman of the Cortex board and executive vice chancellor of Washington University, said that money has helped create a desirable location for startups and corporations.
“In the first stage, you couldn’t get development without providing some financial assistance in order for people to enter here, and now developers are willing to pay market rents,” he said.
Webber added that some projects under construction — including the Aloft hotel slated to open this summer — haven’t received any public financing.
“Our goal is to move toward elimination of all public subsidies so there’s only gain from employee taxes — all the tax revenue that’s provided,” he said.
The report found that an additional $700 million in private investment has also helped develop nearly 2 million square feet in the district, including retail real estate and coworking spaces.
What makes Cortex successful?
Cortex got off to a slow start in the early 2000s, but more recently, occupancy and real estate development have taken off.
The report credits that success to the development of Cortex’ identity as a “live/work/play/learn” community that attracts established and new companies looking for a collaborative environment.
During a press event Thursday highlighting the report, CEO Dennis Lower said the presence of startups has attracted more than 20 established corporations to the district in the past few years.
“They’re moving in to follow these entrepreneurial startup companies,” he said. “They want to be close to that energy; they want to interact.”
Cortex has also tackled an important barrier holding back business growth in many cities — access to capital.
Data from Pitchbook analyzed by TEConomy shows that 58 Cortex tenants have raised nearly $400 million in capital. Several venture capital and risk capital organizations are located on site.
Lower, who is expected to step down from his position early this year, said it takes about 35 years to complete an innovation district like Cortex, which is almost halfway toward meeting its goals.
By 2030, Cortex aims to house 600 companies and 15,000 jobs.
Follow Corinne on Twitter: @corinnesusan
Send questions and comments about this story to firstname.lastname@example.org