The St. Louis Board of Aldermen approved a tax incentive package Friday, sweetening a plan for Build-A-Bear to move its headquarters — and 200 employees — to downtown St. Louis from its current location in Overland.
After passing on a 22-3 vote, the bill now moves on to Mayor Lyda Krewson for a final signature, which a spokesman said she will provide.
Over the course of 10 years, the incentives would give Build-A-Bear access to up to $4 million to improve a leased office building at 415 S. 18th St. and construct a connected retail store in downtown west. According to the agreement, the city will give back 50% of all earnings and payroll taxes for those improvements.
Christine Ingrassia, D-6th Ward, sponsored the bill, and has been working with Build-A-Bear and the St. Louis Development Corporation since May on a deal that she says is significant for St. Louis.
“I can’t remember the last time we actually moved somebody from somewhere else into the city,” she said.
She said the move would also be a part of the revitalization of downtown west into a tourism-driven area. It will soon be home to the St. Louis Aquarium at Union Station, and it’s the site proposed for an anticipated Major League Soccer team.
Build-A-Bear CEO Sharon Price John said in a statement that she’s “excited with the prospect of relocating our global headquarters to the dynamic downtown St. Louis area.” But, she added that the company wouldn’t comment further until details of the lease are worked out and a final decision is made.
As malls around the country continue to decline, Build-A-Bear has shifted its model over the past few years to focus on smaller, more experiential locations.
Otis Williams, executive director of the St. Louis Development Corporation, said the move would be a symbolic and financial win for the city. Over the course of 10 years, his office estimates the deal will bring in nearly $1.6 million in net new city revenue.
“We are very conservative when we do our analysis. We know that this deal is going to be way better than the return we were reporting on, so I think it’s a good deal for the city,” Williams said.
A tax abatement during the 10-year lease has also been approved. That’s a more typical financial incentive, whereas payroll and earnings tax incentives are more rare, he said.
“The challenge here is that Build-A-Bear is not owning a facility; they’re just leasing, so we were trying to come up with a way to incentivize their move here by taking advantage of something that will impact the company instead of just the real estate,” Williams said.
Some have argued the city is handing out too many incentives to an area that’s already getting a lot of investment. For that reason, Alderwoman Heather Navarro, D-28th, voted no on the incentive package.
“It’s going into an area where there’s an aquarium, the Ferris wheel. There’s a lot of good development happening, so in a way there’s an incentive already built in for them to be in that space,” she said.
Williams disagrees with this criticism and noted that payroll and earnings taxes have also previously been given out to retain jobs at Anheuser-Busch, and in other cases.
“Many people think St. Louis is a magnet, or at least some feel we don't need to do anything to draw business to this area, but that’s the furthest thing from the truth,” he said. “While some will locate here because they have family ties, many people make decisions based on a business decision — whether or not there’s a return.”
While the move isn’t expected to create a significant number of new jobs, it does guarantee more than 170 jobs with an average annual salary of $85,000. If the employee count at the office drops to that number, Build-A-Bear would only get 25% of its payroll and earnings taxes reimbursed. If that number goes as low as 140, the incentives will cease all together.
Ingrassia said the clawback provisions also protect the city in case Build-A-Bear decides to leave in the next 10 years. In that event, the company would be on the hook for any incentives received up to that point.
Residency requirement waits
The sponsor of a bill that would ask residents whether they want to allow city employees to live outside the city will wait until after Labor Day to seek final board approval and send it to the mayor.
Aldermen narrowly gave first-round approval last week to the measure. But Alderwoman Carol Howard, D-14th Ward, said there were not enough guaranteed supporters in attendance on Friday to ask for final approval.
“What I find rather amazing is that as much as we talk about power to the people and let the people vote, I have people that articulate that but aren’t delivering that in practice,” she said.
Howard is “very sure” she will be able to secure the votes necessary while the board is on its summer break. Allowing city workers, except for elected officials and mayoral appointees, to live elsewhere will make recruitment easier, she said.
“I think we maybe need to look at what other cities are doing, as far as offering some incentives, and put that along with our outreach and widening our net by eliminating the residency requirement,” Howard said.
Opponents of lifting the requirement say it will lead to a mass exodus of residents from the city, especially from areas that are already struggling.
Howard proposed a similar measure last year, but the board never took a final vote, as the issue got tangled in the politics around a bill to reverse the pending reduction of wards from 28 to 14.
If the board approves eliminating the residency requirement, the issue would go to voters in 2020.
Tighter curfew fails
Also on Friday, the board quashed an attempt to set an earlier curfew in the city.
The bill from Alderman Brandon Bosley, D-3rd Ward, did not get first-round approval last week. Friday’s attempt to redo that vote failed.
“This year, we will probably once again be number one on homicides per capita in the United States, and I don’t think we’ve created any laws, specifically, that will change that for this year,” Bosley said in remarks to his colleagues after the procedural move failed. “We can have long-term solutions, but we need short-term solutions at the same time.”
Curfew in the city for those under the age of 17 is currently between 11 p.m. and 5 a.m. Sunday through Thursday, and midnight through 5 a.m. on Fridays and Saturdays. Under Bosley’s proposals, anyone under 17 would have to have been off the streets between 10 p.m. and 7 a.m. on the weekends, and 9:30 p.m. and 7 a.m. Sunday through Thursday.
The measure also proposed a higher fine for a first curfew violation, but reduced the amount of potential jail time. It added stiffer penalties for additional curfew violations.
Getting teenagers off the streets before midnight, Bosley said, reduces the likelihood they’ll engage in violence.
“A lot of these teens are getting shot after 11,” he said. “It’s 12, 1, 2, 3 in the morning and they’re still outside running around the city.”
The St. Louis police department has not issued a single curfew violation in 2019. Bosley said setting the curfew earlier would give police more time to talk to teens who might be out past curfew. Later at night, he said, they’re too busy running from call to call.
Bosley said he’ll propose a new curfew ordinance after the board returns from its summer break. It's adjourned until Sept. 13.
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