Nov. 16--The Clayton Board of Aldermen unanimously approved a tax abatement agreement with Centene Corp. on Tuesday night that paves the way for the fast-growing health insurer to build a huge new office campus for 2,000 additional employees.
An agreement between the Medicaid managed care company and Clayton knocks 40 percent off real property taxes on the new buildings planned along Forsyth Boulevard in downtown Clayton. Half of the personal property taxes are to be abated.
The vote came despite opposition from some residents, who complaints included the hefty tax incentives, the lack of a public vote on the plan, congestion from the project and construction noise while it is built.
Mayor Harold Sanger, while expressing empathy for residents' concerns, said board members ultimately made the decision they believe is best for the community, including the school district.
Sanger added that some opposition to the proposal was based on misinformation, namely people believing that a tax abatement means the city is taking public funds "and writing a check" to Centene to build.
In all, the agreement is projected to save Centene about $75 million over 20 years, or about $40 million in today's dollars, on the $772 million project. The company has also won approval for $10 million in Missouri BUILD bonds and has requested some $35 million in state incentives for companies that add enough new workers.
Clayton officials have said they were able to negotiate with Centene for an incentive package that was less than the company originally asked for. The company first wanted half of the value of its new buildings abated.
Centene, which runs Medicaid programs for states, is one of the region's fastest-growing companies and already employs about 1,000 people at its headquarters in downtown Clayton. It plans to add about 1,000 new jobs, some from locations outside the region, and consolidate 1,000 jobs from other offices around St. Louis County.
By 2020, Centene hopes to build two office towers of around 30 stories each. One would include a hotel and an auditorium and plaza that could be used for public events. Centene would occupy only half of the buildings initially, leaving room for roughly 3,000 additional employees at other companies. A final phase with no timeline could add a third, 25-story office building.
While the first office buildings are being constructed, Centene would also be adding a parking structure with about 130 attached residential units. Throughout the developments parking structures, Centene is expected to add somewhere around 5,800 parking spots.
Resident Stacey Smith was among about 100 people who attended the board meeting, which was moved to Wydown Middle School to accommodate the crowd. She said the choice to not include residents in project talks was dismissive and condescending.
She and her brother, Scott Smith, are partnering with lawyer Frederick Berger to create a political action committee in opposition to the measure.
They say the group We Want A Vote believes the decision to give incentives to Centene should not be up to the board but to local homeowners.
"The people who put you in office never voted to put this large of a project in motion," Berger said during the meeting.
"Let them have a say. It's their money," he added later.
The PAC is collecting signatures to have the issue put on the ballot.
The aldermen said they wanted to avoid giving Centene a reason to build outside of Clayton by not approving the deal.
Like some others on the board, Alderman Ira Berkowitz said he too understood residents' concerns. In a "perfect world ... a company that makes $40 billion in revenue wouldn't be saying they needed a tax break" and there would be legal measures in place to prevent that, Berkowitz said, but the board didn't see putting the issue to a public vote as a viable option.
It's not the first time Clayton residents have challenged the city's tax abatement packages. In May, Clayton settled with a group of residents that had sued in 2014 to force a vote on a tax break package for a 26-story apartment building going up on South Meramec Avenue. The settlement dropped the abatement from 50 percent to 20 percent and is projected to save the city and other taxing jurisdictions $5 million.
The next step in the process is to approve the design of the project.
Jacob Barker --314-340-8291
@jacobbarker on Twitter
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