From The ST. LOUIS POST-DISPATCH, Wednesday, May 7, 2008
Centene returns to downtown Clayton development plan By Margaret Gillerman
Clayton - Clayton officials made it official Tuesday that Centene Corp. - after flirting with a downtown St. Louis headquarters at Ballpark Village - has returned to its original plan to expand in downtown Clayton.
"They're planning to roll out their redesign," Mayor Linda Goldstein said Tuesday night. "It's very exciting."
The office and retail project is expected to be strikingly similar to - but smaller than - the $210 million development the company proposed there in 2005.
But the mayor and a Centene spokesman said the deal was not sealed.
"Centene has made it very clear to me that it's not a done deal," Goldstein said. "From our perspective, we have not negotiated a redevelopment agreement. There are a lot of loose ends."
Ken Fields of Centene said, "There are important factors to be addressed" before any deal with the city was signed.
Centene's earlier plan depended on Clayton's use of eminent domain to take property from unwilling owners, who won a Missouri Supreme Court case that blocked it. But those owners have since sold to a third party, which eliminated the condemnation obstacle.
In the interim, the managed health care company made plans to move to Ballpark Village; but no work was done, and that deal fell apart in March.
Clayton officials plan a forum Tuesday at the community center, The Center of Clayton, for the public to review and comment on the new Centene proposal. The meeting will be from 5:30 to 7 p.m.
Centene's plan is to redevelop the one-half block area bounded by Hanley Road, Forsyth Boulevard and Carondelet Avenue, expanding its current world headquarters.
"It will really revitalize that corner, bring in jobs and bring people to Clayton." Goldstein said.
The latest proposal is similar to the first, but Centene has indicated it would focus on the expanded headquarters space before building additional office space to lease out, she said. The development team will be the same, Goldstein said, with Centene, U.S. Equities of Chicago and Clayco of St. Louis.
The new proposal would include:
Initial construction of 560,000 square feet of office and 30,000 square feet of retail space.
Environmentally sound certification of the building for "green" purposes.
Landscaping, green space and public art.
An estimated 800 new jobs in Clayton, with a projected total employment count of 1,230 by 2015.
Centene's headquarters has been in Clayton since 1997, and it owns much of the property involved.
Goldstein recently disclosed that the city, county and state had entered into discussions with Centene to keep the corporation in Clayton.
Clayton has not approved any financial incentives, Goldstein said, but is considering partial tax abatement on real and personal property and sales tax exemption on construction materials.
Clayton is considering allowing a Community Improvement District that would impose a one percent gross retail sales tax on the retailers in the development. That was approved for the first Centene plan.
Goldstein noted Tuesday that the project was strictly office and retail and would not include any residential components.
Sister City agreement signing is Friday; St. Louis to partner with Bosnian district By Jim Merkel
Local Bosnian leaders hope a partnership between St. Louis and a district in Bosnia-Herzegovina will lead to extensive economic, health and educational exchanges.
A signing ceremony of a Sister City agreement between St. Louis and the 110,000-population Brcko District, BH, will be held 1:15 p.m. May 9 in Room 208, the Kennedy Room, of City Hall.
Representatives from Bosnia and the Brcko District will join Ibrahim Vajzovic, president of the United Bosnian Association in St. Louis, Mayor Francis Slay, County Executive Charlie Dooley, Missouri Secretary of State Robin Carnahan and state Sen. Harry Kennedy, D-St. Louis, for the ceremony.At a May 1 news conference announcing the agreement, Vajzovic acknowledged that Sister City agreements between St. Louis and 15 other cities around the world promote a mainly cultural relationship.
Vajzovic said at the news conference at Grbic Restaurant, 4071 Keokuk St., that this agreement could go beyond that.
"We have a huge number of Bosnians in St. Louis," Vajzovic said. "We think it's time for us to make a bridge between Bosnians and St. Louis."
Gerald Dunne, a local attorney working with the effort, said many thousands of people have come to St. Louis from Bosnia.
"The entire St. Louis area has benefitted. We want more Bosnian people," Dunne said. They'll be comfortable here because there are already Bosnians here, he said.
Work has been underway on this project for the last two years, Vojzovic said. Kennedy recently visited Bosnia-Herzegovina to finalize the agreement.
Representatives from Bosnia-Herzegovina will be in Jefferson City today to meet with state officials. They will tour this area and attend a reunion with people from the Brcko District Saturday night.
This is now a good time to invest in Bosnia-Herzegovina, before it joins the European Union, Vajzovic said. Afterwards, it may be more difficult, he said.
There are discussions about exchanging doctors and having Webster University start a school there, Vajzovic said. Bosnian nurses could ease the nursing shortage here, he said.
Webster University has no plans to start a school in Bosnia-Herzegovina, said Polly Burtch, the university's director of news and communications.
From the St. Louis Business Journal.Tuesday, May 6, 2008
Council of Development Finance Agencies names Richard Palank board chair By Matt Allen
Richard Palank was elected board chair of the Council of Development Finance Agencies (CDFA) having served on the board the previous six years.
Palank first joined the CDFA board in 2002, most recently serving as vice chairman.
Palank is the senior vice president of St. Louis County Economic Council's business finance division.
He also serves as the president and CEO of the Business Finance Corporation of St. Louis County; president and CEO of the St. Louis County Industrial Development Authority; and founder, president, and CEO of the Saint Louis Business Development Fund.
Council of Development Finance Agencies is a national association dedicated to the advancement of development finance concerns and interests.
St. Louis Enterprise Center Helps Small Businesses By Jennifer Blome
If you'd like to be your own boss and you have a good business plan, the St. Louis Enterprise Center might be your answer. People with home-based businesses often apply to the Enterprise Center when their businesses are growing, but they can't afford new space.
Richard Palank is with the St. Louis County Economic Council, which oversees the Enterprise Center.
"The Enterprise Center client has very little overhead. They don't have to hire a secretary. They don't have to buy phone equipment, fax equipment, it is all here for them", Palank explains.
Lisa Simpson is one of those clients. She has a gourmet baking business called Sweeties to Go. Lisa operates her business out of the Enterprise Center's kitchen incubator. It is a large commercial kitchen, which currently houses six companies.
"I can't believe everyday that I get up, people pay me to make cakes and cookies and all these wonderful desserts," says Simpson. "My goal is to become Sara Lee's competitor, only we're going to do gourmet. That's our ultimate goal."
Ollie Dowell recently graduated from the Enterprise Center, and found space for her public relations firm in downtown St. Louis. Ollie runs the Information and Paging Booth at Lambert St. Louis International Airport. Her company will also manage two full-service spas opening at the airport this fall.
"All of this grew out of one contact at the St. Louis Enterprise Center. That is one of the best kept secrets in the city of St. Louis for anyone who is wanting to start a business," says Dowell.
Edward Jones Seeks Rebate for $260M Expansion By Robert Carr
DES PERES, MO-The St. Louis County Council will consider a request Tuesday to grant a $17.8 million tax abatement for Edward Jones’ south campus expansion, which includes a 225,000-sf addition and a four-story parking garage. The project is part of the investment firm’s $260 million expansion plan in the state, that includes three new office buildings in Maryland Heights, MO, totaling 650,000 sf, at the company’s north campus.
The company is asking for a 50% abatement on the property taxes for the addition (taxes will continue to be paid on the main south campus building) for a 10-year period. The building is set to be complete by November 2009. The firm will pay about $27 million in taxes until 2020, when the abatement will drop off, and the new taxes will increase by about $4.5 million annually.
County executive Charlie Dooley, backed by the St. Louis County Economic Council, is supporting the request, which will be heard at the county’s 5 p.m. council meeting Tuesday. Dooley said in a statement that the county is fortunate to have a company adding instead of subtracting space. “During a time when the economy is sluggish, Edward Jones continues their growth plans,” Dooley said.
The investment firm has said the expansion plan will add 500 office jobs to the state when completed, and up to 1,000 jobs by 2016. The company has begun the construction of the three buildings in Maryland Heights, and expects a 2011 completion. In a previous interview,
a company spokeswoman told GlobeSt.com that the expansion and new hires will help support the growth of its branch office network, which employs more than 10,000 representatives. The firm has also received almost $50 million in incentives, including road development and state tax cuts, for the projects in the two communities.
From the St. Louis Business Journal. Friday, May 2, 2008
Tough times call for big names in retail market Grocery-anchored centers remain steady during downturn By Chris Birk
Anchored by a bustling Schnucks grocery and a 124,000-square-foot Target, the once flailing Northland Shopping Center in Jennings now boasts a 99 percent lease rate a year and a half after reopening.
The refurbished center serves as a prime example of how corners of the retail market are weathering the housing market slowdown and the overall shift in the national economic climate: Big hubs with big names may provide the best bet. Along with its core anchors, what's now known as the Buzz Westfall Plaza on the Boulevard, which is owned and managed by the Sansone Group, also has tenants such as Starbucks, Foot Locker, U.S. Bank and National City Bank.
Grocery-anchored centers and infill areas linked to stable populations continue to lead the way.
"Infill grocery-anchored retail centers and high-density population areas with sound income -- they're prospering off the necessity buying," said Joshua Roedemeier, retail specialist with Colliers Turley Martin Tucker. "Folks still have to buy groceries when times are bad, if not more so."
Times aren't terrible in the retail sector, but they started to tighten as 2007 came to a close. The region's retail market vacancy rate hit 10.7 percent in the fourth quarter of 2007, up from 10 percent in the previous quarter, according to Grubb & Ellis research.
Vacancy rates shot above 12 percent in five areas: eastern St. Charles County (15.7 percent); Jefferson County (13.8 percent); St. Clair, Ill. (12.7 percent); south St. Louis County (12.5 percent); and central St. Louis County (12.4 percent).
Asking rents for all product types rose to $12.62 per square foot in the fourth quarter from $12.26 per square foot in the third quarter, according to Grubb & Ellis.
With the recent downturn in consumer spending and confidence, some larger big-box retailers are delaying expansion plans or even shuttering stores, adding another wrinkle to the retail picture.
"I think you've definitely seen a bit of a slowdown in sales," Roedemeier said. "In turn, it's caused some of the retailers to pull back and take a wait-and-see approach to what's going to happen in the coming months."
But some larger retail projects that can bank on significant anchor tenants are moving ahead with little concern for waves in the housing market. Sansone is working on a couple of major initiatives in Richmond Heights along the Clayton Road and Highway 40 corridor, including a 32,000-square-foot retail strip called Pinnacle Square where the Shell gas station and Burger King currently sit.
Meanwhile, some of the fringes and bedroom communities of the St. Louis metropolitan area are witnessing both the boom and bust associated with a fluctuating economy.
High-growth communities in Illinois, such as O'Fallon and Edwardsville, continue to offer prime opportunities for retailers, according to Grubb & Ellis. For example, O'Fallon has seen several major projects come before City Council members, including the Creekside Promenande development, which includes plans for a Walgreens and other retail shops, as well as a Starbucks, an Aldi's grocery and a massive hotel/conference center park in the $100 million ballpark. The 82-acre site is expected to be home to a Hilton Garden Inn, its conference center and a Hampton Inn Hotel.
More traditionally agrarian areas in Missouri south of St. Louis, like Washington and Farmington, also fit the bill for developers. The eastern end of Washington off Highway 100 has seen a retail boom over the past few years, including the addition of a 127,000-square-foot Target last year.
But the spate of new-home construction in St. Charles during recent years is slowing, meaning a change in the retail market for those once-bustling areas. In other areas on the suburban fringe, the pace of housing construction has yet to catch up with the retail growth that arrived first in anticipation.
"You start to see retail saturation and so much home growth, but now with it slowing, tenant interest slows as well," said Mike Pettit, director of retail services for the Sansone Group.
Despite the slowdown in the St. Charles area, retail centers and developments with those big-name hubs should be able to ride out the waves, Pettit said.
"It's just a matter of intelligent site selection," he said. "With a good draw, a grocery or a Walgreens or a Starbucks, you should be able to hedge against your risks."
In some respects, the smattering of store closings and halting expansion plans is part of the normal retail cycle, Roedemeier said.
"Tenants are always in a state of flux, even during strong economic times," he said. "Some are closing -- those were more of the tenants that had more of an undisciplined growth mode the past few years."
There are also some tenants seizing the opportunity and taking advantage of the topsy-turvy economy. For example, Dunkin' Donuts is gearing up for a move into the St. Louis metro area.
The company plans to open at least five new eateries in St. Louis and is offering franchise opportunities in counties surrounding the region, including Washington, Jefferson, Franklin and St. Charles in Missouri and Madison, St. Clair and Clinton in Illinois.
Other retailers are cashing in on under-market rates in some prime locations, Roedemeier said.
"Those more pragmatic and disciplined (tenants) continue to grow, taking advantage of the market right now," he said.
From The ST. LOUIS POST-DISPATCH, Thursday, May 1, 2008
China: Bi-partisan success
Back before things got so polarized, it was said that American politics stops at the border. Democrats and Republicans might squabble at home, but they'd present a united front abroad.
Every now and then, there are signs that the good old days might return. Recently a bipartisan entourage set off from Missouri to China, and came back with the makings of a possible air transport deal for Lambert Field.
Gov. Matt Blunt, a Republican, was on the trip, and he invited along former Gov. Bob Holden, a Democrat. There were Missouri's two senators, Republican Christopher S. "Kit" Bond and Democrat Claire McCaskill, along with Rep. Russ Carnahan, St. Louis Mayor Francis Slay, and St. Louis County Executive Charlie Dooley, all Democrats.
Also on the trip were executives from the Regional Chamber and Growth Association, World Wide Technology; Pfizer; Peabody Energy; Unigroup, McEagle Properties and the World Trade Center of St. Louis.
Republicans, Democrats and business leaders pitched the same message: St. Louis is a good place to do business, and we have things that China wants to buy.
They pitched Lambert Field as a hub for air freight between China and the United States. They pointed out that Lambert is an all-weather airport, now that it has a new runway. An expansive industrial park is being developed on its fringe. The airport has plenty of extra capacity since American Airlines downsized its operation here. The Chinese can avoid the delays that plague Chicago's O'Hare airport, where much Chinese air cargo now arrives, and still reach Midwest markets.
The Missouri group came back with an agreement from the Chinese for a joint study of the Lambert proposal. That's pretty vague, but it's the most that could be expected from an introductory meeting. A high-level Chinese delegation paid a visit to St. Louis last week; discussions continue.
Mr. Blunt says an air cargo hub could create hundreds of jobs in Missouri. But that would be just a start. The Chinese present a rapidly growing market. Missouri's exports to China have grown from $70 million in 2000 to $1.02 billion last year, according to the U.S.-China Business Council.
Area leaders think St. Louis could be the cargo hub for China for a 20-state region. That may be overly ambitious, but setting sights high rarely hurts.
St. Louis has plenty of competition for the China trade. Officials from Dallas - another town with a big all-weather airport - were in China this week promoting their vision of an inland port, where Chinese goods could clear customs and be dispatched across the nation. Kansas City, with its huge under-utilized airport, also has eyes on the prize.
In the Metro East, officials of St. Clair County are promoting MidAmerica St. Louis Airport in Mascoutah as a landing point for cargo from Asia. MidAmerica defines the term "under-utilized airport," and it's bordered by land ripe for development.
Heartening as it was to see politicians from both parties leave aside their differences to promote business and jobs for St. Louis, the next step would be to apply that bi-partisan attitude at home.
St. Louis would do much better in the contest for funds from Jefferson City and Washington if its politicians united to pursue our region's common interests, rather than dividing along party and ideological lines.
From the St. Louis Business Journal. Wednesday, April 30, 2008
Dooley supports $17.8M tax abatement for Edward Jones expansion project By Matt Allen
St. Louis County Executive Charlie Dooley requested on Tuesday night the County Council grant Edward Jones a 50-percent tax abatement of $17.8 million over a 10-year period beginning in 2010 for its expansion project of its south campus headquarters in Des Peres, Mo.
In total, Edward Jones would pay an estimated $27 million in taxes over the 10-year period on its south campus. If legislation is approved, after the 10-year tax abatement period expires, the amount of taxes the firm will pay will be approximately $4.5 million per year.
The south campus project, which includes a 225,000-square-foot addition and four-story parking garage, is part of Edward Jones' $260 million expansion plan that was approved last summer. The expansion is expected to create at least 500 high-quality, permanent jobs over the next five years and generate 800 construction jobs, according to the St. Louis County Economic Council.
Edward Jones has begun construction of 650,000 square feet of office space and parking garages at its 60-acre north campus in Maryland Heights, Mo. That project is scheduled for completion in 2011. The south campus project is expected to be completed in November 2009.
"Adding a minimum of 500 high quality jobs with one of the area's leading employers will only add to the strength and diversity of the local economy," said St. Louis County Economic Council President and CEO Denny Coleman.
Coleman said the Council will vote on the measure at next week's meeting.
St. Louis-based Edward Jones is an investment brokerage and financial services firm with offices throughout the United States, Canada and United Kingdom. The company has more than seven million clients and employs more than 32,000 people.
From The ST. LOUIS POST-DISPATCH, Wednesday, April 30, 2008
Dooley wants tax abatement for project in Des Peres By Phil Sutin
CLAYTON - St. Louis County Executive Charlie Dooley on Tuesday asked the County Council to grant Edward D. Jones and Co. and an affiliate $17.8 million in 10 years of tax abatement to help finance a $145 million addition that could add hundreds of jobs at its headquarters in Des Peres.
The company wants to build an addition of 225,000 square feet and a four-level parking structure at the headquarters, at Interstate 270 and Manchester Road. The abatement covers half the taxes Jones would pay on the new structures in 10 years starting in 2010.
Earlier this month, the council granted Jones property and sales tax abatements totaling about $37 million. They are to run from 2009 to 2022 to help finance construction a $246 million project with three office buildings and parking garages totaling 817,000 square feet along Progress Parkway just east of Interstate 270 in Maryland Heights.
The two expansions would generate a minimum of 500 new permanent jobs at 800 construction jobs, the county economic council said.
At the council's public forum, Tom Sullivan, a civic activist, said the council should reject Dooley's request. The county may not benefit from the abatement, and it would encourage developers to think they are entitled to tax abatements for every project, he said.
The council also granted nearly $3.1 million in tax abatement and exemptions to help finance an office building of 146,000 square feet at 13610 Riverport Drive, also in Maryland Heights.
The benefit would go to Elsevier Inc., a publisher of science and health information from Amsterdam, Netherlands, that would use the structure, and Duke Construction Limited Partnership, which would develop and build it.
From The South County Journal, Monday, April 28, 2008
National media rank Lemay in top 100 places to start business By Steve Birmingham
As far as some Lemay business people are concerned, CNN and Fortune magazine are saying what they already knew.
Lemay is a great place to start a business.
CNNMoney.com and Fortune Small Business recently ranked Lemay 85th in the "Top 100 Places to Live and Launch" a business, citing the "new casino and excellent resources for entrepreneurs."
"Until recently, Lemay's older population and aging infrastructure made it a rather sleepy place to live and launch," the web site's report stated.
The story also cites the River City Casino and Hotel, the St. Louis Enterprise Center (a 20,000 square foot startup incubator), a supportive county economic council and its strategic location as pluses for the community.
Dennis and Jan Gerfen, owners of Nottlemann Music Company, in the 1500 block of Lemay Ferry Road, already knew all that and said the community is a great place to live and work.
"I know this area is very established with a lot of second- and third-generation families," Dennis Gerfensaid. "People don't seem to move too far so it's a well-received area by a lot of people. The housing is affordable compared to the other areas and so that has a lot to do with it."
Jan Gerfen is herself a third-generation business owner, since he father started the music store 55 years ago.
The couple's store offers musical instrument sales and lessons to individuals and school band members.
"Off the top of my head 70 percent of our business comes from Lemay and surrounding area," Jan Gerfen said. "This is the third generation and we're hoping it continues on, and we think it will since we have no plans of leaving the Lemay area, we plan on staying right where we are."
Dennis Gerfen thought Lemay's location was a big plus.
"Putting in the casino here puts us a little bit more on the map and people see what's happening here so they start investing in the area," he said.
William J. Cocos, president of Wm. G. Cocos Plumbing Company, in the 700 block of Lemay Ferry Road, said his grandfather, William G. Cocos, started his plumbing business in Lemay in 1936.
He thinks Lemay's future is bright for a couple of reasons, namely Pinnacle Entertainment's River City Casino and Hotel.
Cocos said not only does the construction mean about 1,000 construction jobs, but an additional 2,000 permanent, full-time jobs come along with it.
"If you add to that a tremendous geographic advantage Lemay has with access to Interstate 55, rail and our proximity to downtown, particularly now with the gas prices, I think you can see why some people would think of Lemay as a great place to locate a new business," he said.
Pinnacle is currently paying for construction of a new road that will give access from Carondelet
Boulevard into the casino site. The new road, as yet unnamed, will intersect with both Lemay Ferry Road and South Broadway and is expected to be completed in February 2009.
Cocos thought people coming into the area to work at the casino once it opens will want to live nearby, which will spur opportunities for smaller retail businesses to open in the area.
Having the St. Louis Enterprise Center, operated by the St. Louis Economic Council, as well as the Lemay Development Corporation and the Lemay Chamber of Commerce as proponents of the area is "a big advantage" in creating new businesses opportunities, Cocos said.
"They have everything down there from a company that develops Web sites to one that does
construction work on cell phone towers," Cocos said. "It's a pretty broad spectrum, but what we haven't seen is retail coming in."
Midwest Bank Centre (formerly Lemay Bank) vice-president Dan Berra said the bank has served the area for 102 years and that the listing on CNNMoney was a boon for the city.
"We're just thrilled with that designation," Berra said. "The whole community is made up of small businesses that are service-related or small manufacturing, so the designation is probably appropriate."
He also cited the construction of River City as a main factor in the selection.
"There are some very direct dollars that will be paid by that casino out of their revenues that will come into the community," Berra said. "It's going to be a windfall, especially for the school district in the community itself."
The Hancock School District could receive as much as $2.2 million when the casino opens. The money will go to the South County Education Foundation to be divided between the Hancock Place, Bayless and Mehlville school districts, other civic organizations and school-related programs. The money will come from contributions from Pinnacle paid to St. Louis County in lieu of taxes.
Berra also cited the proposed Iron Works development at Weber Road and I-55 as proof of Lemay being a good place to start businesses as well as a potential boost to housing development.
"They casino will employ 2,000 new employees, so those people may want apartment living, or in some cases residential housing that they can own near the workplace," Berr said. "I think we're going to see opportunities to redevelop the area for both housing and retail."
From The ST. LOUIS POST-DISPATCH, Monday, April 28, 2008
St. Louis places a trade bet on China By Tim Logan
They call it "the big idea."
It is a plan, hatched by local business leaders, to hitch this city to the world's fastest-growing economy. To use our underutilized airport, our rivers, roads and rails, and our location smack in the middle of the heartland to build St. Louis into something like a gateway to the Far East. To build an air freight hub connecting the Midwest and China.
It is an ambitious idea, to say the least, and one that is a long way from reality. But it is an idea that, if it ever flies, could create hundreds, maybe thousands, of jobs here and reposition St. Louis as an essential link in the ever-more-global economy.
It began a couple of years ago, with conversations between Paul McKee, whose McEagle Properties is developing a 550-acre site just east of Lambert-St. Louis International Airport, and Steve Stone, a Clayton lawyer whose cousin is a leading British expert on trade with China.
They approached the cousin, Steve Perry, about the prospects of luring Chinese cargo flights to Lambert, and of building a portal here for the entire Midwest.
"I said, 'Is this a serious question?'" Perry recalled in an interview last week. "(Stone) said, 'Yeah.'" So they began studying it and enlisting local business support. They developed a lengthy study on markets here and across the Midwest, on weather patterns, distribution networks, and the costs of St. Louis compared with Chicago and Columbus, Ohio. They began reaching out to the Chinese government, which is trying to develop more air freight to the U.S., and they found interest.
"This idea is real," McKee said.
MISSOURI DELEGATION
It became a lot more real last month when a delegation led by Missouri's two senators, Gov. Matt Blunt and a congressman traveled to Beijing to meet with Chinese aviation and economic authorities. After two days of talks, the group came away with a deal to spend six months studying closer economic ties and the potential of a St. Louis air freight hub and, perhaps, passenger flights.
Those studies are beginning now, gathering data on what kind of goods from Missouri and surrounding states might be shipped to China, what competitive advantages St. Louis offers and what kind of facilities would be needed here.
The studies are being funded on this end by Lambert, the Regional Chamber and Growth Association, the World Trade Center-St. Louis and the Missouri Partnership, and also by the Chinese government. They should be complete by October.
"We have a long way to go," said RCGA President Richard Fleming. "But the pace at which this has moved so far indicates that this is being taken very seriously.
" Indeed, the Chinese are moving quickly. Just this weekend, Li Zhaoxing, who heads the foreign affairs committee of the National People's Congress, visited St. Louis and discussed the air cargo proposal at a dinner with local business leaders Friday night.
In an interview Saturday, Ping Huang, China's Midwestern consul general, said there is great opportunity for better links between his country and this region of the U.S., including St. Louis. And while a lot of work needs to be done, an air hub here would help that a lot.
"It's not just a big plan, a big dream," Huang said. "We'd like to see it become reality."
Of course, it's not just St. Louis that wants to be China's gateway to the Midwest. Much of the region's air freight today goes through Chicago, with all of its global business infrastructure and direct overseas flights.
Nashville, Tenn., Dallas and Columbus also have regular Asian cargo flights, with planeloads of laptops and clothing flown in every week and trucked across the country. And mega cargo hubs already exist in Memphis, Tenn., home of FedEx, and Louisville, Ky., where UPS has its international sorting center.
St. Louis shares those cities' central location and favorable weather patterns. But it lost out on the domestic air freight boom of the 1980s, when Lambert was jammed with TWA flights and the big shippers chose to locate farther east.
Now those TWA flights are gone and Lambert has a new third runway, with capacity to spare. And the Chinese are looking.
McKee and others hope to persuade them to bypass Chicago traffic and O'Hare delays and bring their own U.S. flights into St. Louis, a relatively easy drive from much of the Midwest.
But this takes more than a good airport, says Panos Kouvelis, a logistics expert and business professor at Washington University. If St. Louis hopes to be a freight hub, it also must develop the industry to get goods where they need to go from here.
"Our location is as good as any," he said. "But it's a matter of not only having the airport but having the businesses around the airport that are going to provide services this industry needs."
Indeed, that might be the single biggest challenge, said Ned Laird, a consultant with Air Cargo Management Group in Seattle. The companies that specialize in this tend to be based at the big gateway airports on the coasts, where most air freight comes in.
TWO-WAY TRADE
Just as important down the road, experts say, will be two-way trade. Empty planes going back to China are not economically feasible, which has been a problem for cargo routes to other U.S. cities.
"What we've got to convince the Chinese is that, if they bring in Air China, the plane is going to come in pretty full and go out pretty full," Perry said.
There's hope for that. Perry points to rising exports from the U.S. to China, and hunger amid the growing Chinese middle class for high-quality goods made overseas.
While U.S. imports from China still dwarf exports to it, the exports are growing faster, and that may accelerate if the dollar continues its slide. Last year, China bought $65.2 billion in U.S. goods, according to the U.S.-China Business Council, up 300 percent since 2000, the year before it joined the World Trade Organization. In Missouri, the growth is even faster, to $1 billion last year, up 12-fold from 2000.
Much of that trade now is in heavy goods - waste and scrap metals, minerals and ores - things much more likely to be shipped than flown. But as China's economy matures, demand is growing for high-value items like semiconductors and complex machinery, and for just-in-time delivery of the most basic of needs: food.
That's where the breadbasket of America can really benefit from a direct link, Perry said.
"The U.S. has the most efficient agricultural production system in the world," he said."And there you've got 1.4 billion people who need to be fed."
So whether it's Monsanto seeds, Caterpillar tractor parts or Omaha steaks, which McKee saw selling at a Beijing restaurant for $95 per 10-ounce filet, there is, they say, a market across the Pacific for what's made in the Midwest. Throw in industrial equipment and advanced manufacturing, and that market only grows.
Being a gateway for this kind of global trade could be a big deal for St. Louis, say several who are involved in the effort.
It could help replace at least some of the manufacturing jobs that have gone overseas and attract investment here from Chinese companies looking for a foothold in the Midwest. It would help St. Louis thrive in a business world that, increasingly, is about China and India just as much as Chicago and Atlanta, said former Gov. Bob Holden, who went on the trip and is vice chairman of the Midwest U.S.-China Association.
"We can't stop globalization," Holden said. "What we can try to do is shape it so it benefits us as well as others."
But there are many hurdles between here and there. The first is the feasibility study under way now. If that pans out, it will become important to make sure both sides know what they're getting into, Laird said, and that St. Louis has a firm commitment in hand.
"The Chinese are really good at joint ventures that never lead to anything," he said. "It's important to get some realism as to exactly what Air China would be hauling and to what destinations, what kind of facilities Air China is going to demand? What do those things really cost?"
Then there is competition. While China doesn't appear to have this kind of study under way anywhere else, that could change as more U.S. cities chase a tighter relationship. All St. Louis has is a head start.
But that's an important thing in this kind of relationship, Perry said. And while he admitted to being "a bit biased" about the deal he helped pull together, he was optimistic that this "big idea" may one day become a reality.
"I'm hopeful," he said. "It's more than a 50-50, I'd say."
From The ST. LOUIS POST-DISPATCH, Friday, April 24,2008
Centene may revive Clayton plans By Margaret Gillerman
The mayor of Clayton said today that new negotiations with Centene Corp. leave her "cautiously optimistic" that the company will restore plans to build its world corporate and a retail complex in that city.
Last month, Centene abandoned plans to move its headquarters from Clayton to the Ballpark Village site beside Busch Stadium in downtown St. Louis.
Clayton had been the company's original choice, but the plan got mired in eminent domain issues that do not appear to be an obstacle any longer.
Regional and state officials are a part of Clayton's new discussions with Centene , officials said.
"While we are cautiously optimistic that the mutual needs of Centene and Clayton can be met, it's never a deal until it's done," said Mayor Linda Goldstein.
"We are hopeful Centene will see its current home in Clayton is a good one to build on for the future," Goldstein said. "We received positive feedback about the project and have been in negotiations."
Centene spokesman Ken Fields said the corporation appreciates "the ongoing support of the city of Clayton and its constituents."
"We remain hopeful that we can work together with the city of Clayton to keep our growing company in the St. Louis region," Fields said.
He noted that there were still "a number of steps that must be taken in order to solidify an agreement. " Until those details are addressed, we will continue to evaluate other potential options for the location of our world headquarters, both in and out of the St. Louis region."
The talks have been underway for about a week and a half, an official said. Goldstein said she is seeking a broad-based consensus from Clayton residents and businesses.
Centene's headquarters has been in Clayton since 1997, and it owns much of the block west of Hanley Road , between Forsyth Boulevard and Carondelet Avenue.
The city previously approved an expansion project - - estimated to cost $210 million -- for a headquarters and retail center. The city and Centene worked hard to promote it, hailing it as a boon to the entire region.
But the project fell through after owners of key parcels won a Missouri Supreme Court judgment in a fight to keep their land from being condemned by the city for Centene's benefit. Those owners have since sold the land to a third party, presumably making the eminent domain issue moot.
St. Louis County Executive Charlie Dooley issued a statement today that said, "We work hard every day to keep high-quality companies like Centene in our region. We believe the opportunity to keep their proposed mixed-use development in Clayton will provide this important and growing company with a state-of-the-art world headquarters that will serve them well for years to come."
Gov. Matt Blunt said, also in a prepared statement: "We have been firmly committed over the last three years to creating an economic climate that helps Missouri businesses grow and expand their presence in our state," He continued, "Our proposal is a sound investment in the St. Louis region's economic future and I am pleased to partner with the Missouri Development Finance Board, the City of Clayton and St. Louis County to help this Missouri employer create more jobs for workers and families."
From the St. Louis Business Journal. Friday, April 18, 2008
St. Louis companies cash in as Missouri's exports to China top $1 billion
Randy Logan and Josh Wallach weren't sure how deep the Chinese market was when they created Wallach Trading Co. Inc. seven years ago to sell scrap metal to foreign nations.
So far, the market has paid off well. Wallach Trading has increased its revenue by double digits every year and now boasts annual sales of about $100 million, Logan said. The Chesterfield-based company brokers sales of scrap copper, bronze, aluminum and other metals, which China is gobbling up in large quantities to recycle into materials for manufacturing and construction.
Wallach Trading is among several Missouri companies, both large and small, that have grown their business in China significantly in recent years. In 2007, Missouri's exports to China broke the $1 billion mark, up nearly 32 percent from $769 million in 2006 and double the $500 million in 2005, according to the World Trade Center St. Louis.
The increase equals about 40 percent of the $600 million rise in Missouri's total exports last year when the state sent $13.4 billion worth of goods to more than 200 countries.
Canada remains Missouri's largest foreign market, taking in $4.96 billion worth of goods last year. But China is quickly gaining on the next two trade partners -- Mexico ($1.35 billion) and Korea ($1.2 billion) -- and very well could surpass them by the end of the decade.
China last year imported $48 million worth of copper waste and scrap from Missouri, compared to $20.6 million in 2005. Logan's company, which buys significant portions of scrap metals from companies in the St. Louis area, benefited from the trade.
"Our revenues have gone up 10 times greater than they were four years ago," Logan said. "Half of that is because of price, and the other half is volume. When we started in 2001, the price of copper was 65 cents per pound. Now it's $3.85 per pound."
China's rise is a factor in that price increase, too. The nation of 1.3 billion people needs to support a booming economy and a sizable and growing population that's becoming more affluent and consuming more, said Timothy Nowak, executive director of the World Trade Center St. Louis. Nowak said Missouri exports to China in the past three years have grown at a faster pace than exports to its other top trading partners, and that commerce is expected to rise further as the state pursues a closer relationship with the nation.
Nowak was part of the delegation of Missouri political and business leaders who visited China last month on a trade mission. Other members included Gov. Matt Blunt, U.S. Senators Kit Bond and Claire McCaskill, St. Louis Mayor Francis Slay, St. Louis County Executive Charlie Dooley, former Gov. Bob Holden, RCGA President and Chief Executive Dick Fleming, World Wide Technology Chairman David Steward, Pfizer Government Relations Director Drew Duncan, and executives from Peabody Energy, Unigroup, McEagle Properties and Lambert-St. Louis International Airport.
During the week-long trip, Blunt signed agreements with Chinese officials aimed at creating a new transportation hub for Air China in St. Louis and increasing trade between China and the state.
The trade growth comes amid global concern about China's human rights record and safety standards. Blunt spokesman Spence Jackson said U.S. commerce with the nation, however, is helping it adopt higher industrial safety and labor standards. He also pointed out that increased trade with China will help reduce the United States' more than $250 billion annual trade deficit with the Communist nation, the largest trading gap the U.S. has with any country.
"The biggest retail market in the world right now is here," said Gentry Sayad, partner in Armstrong Teasdale's Shanghai office. "If someone is selling stuff here, that's golden."
Boon to Missouri business
Jim Grubbs, vice president of sales and marketing at Maryland Heights-based Doe Run Co., said the mining company's exports to China have skyrocketed over the past four years thanks to the country's need for lead, which is used to make batteries and other industrial products.
Data shows Missouri exported more than $101 million worth of lead ores and concentrates to China last year, nearly double the figure from 2006 ($53.8 million). Concentrate is processed lead in sand-like form from which lead metal can be created.
On April 5, Doe Run opened a new 20,000-square-foot shipping facility on the banks of the Mississippi River in Scott City, Mo., to meet increased demand for lead. Grubbs said the new facility has capacity to ship more than 125,000 tons of lead concentrate annually, the bulk of it destined for China. He said Doe Run mined all the lead sent to China from its six mines in the Virburnum area of southern Missouri. Within the past four years, the privately held company has shipped about 500,000 tons of lead concentrate valued at more than $300 million from Scott City, Grubbs said.
"The U.S. ran a $256 billion trade deficit with China last year, because as a nation, we bought more goods from China than we sold," Grubbs said. "Doe Run's shipments move the other way. Our exports through this port over the last four years averaged $75 million per year, and the lion's share of our exports went to China."
International Ingredient Corp., a subsidiary of Fenton-based International Cos., pushed into China 13 years ago, said President Jim Sullivan. The bet on China, he said, is paying dividends for the company, which is owned by Fred Brown and his family.
International Ingredient, whose parent company generated revenue of $271.4 million in 2007, makes animal feeds from dairy products. Sullivan declined to disclose International Ingredient's revenue.
"We are a relatively small company, and exports accounted for about 30 percent of our business last year," Sullivan said. "China was our biggest market."
Sullivan said the company is capitalizing on growing consumption of pork in China to sell its animal feeds, which are made from cow milk and its byproducts. China consumed 51 million metric tons of pork in 2006, roughly half of the world's total pig consumption, according to the U.S Department of Agriculture (USDA).
China's demand for food also has helped Missouri's soybean farmers, said Brent Babb, director of communications and program development at the St. Louis-based U.S. Soybean Export Council. The country is the largest consumer of U.S. soybeans, which it uses to make food for poultry, seafood, pigs and humans.
China last year imported more than 11.8 million metric tons of the legume from the U.S., Babb said. The country imported $107.4 million worth of soybeans from Missouri, according to World Trade Center St. Louis data.
"China buys over 10 percent of all U.S. soybeans, and every farmer in Missouri is touched by the demand," Babb said. "Without that demand, soybean prices would be much less."
Warren Stemme has noticed that increase. He owns a 1,100-acre farm in Chesterfield, which generates $400,000 in gross revenue from the soybeans, wheat and barley he plants.
"We've seen some unprecedented prices of soybeans. In February, cash prices for delivering in St. Louis were $15 per bushel," Stemme said. "They were probably $7 two years ago and have been rising for the last 18 months."
Like most farmers, Stemme does not export soybeans overseas directly, but sells his crop to big food or silo companies, including Clayton-based Bunge North America Inc. or Wayzatta, Minn.-based Cargill Inc., which then ship the crop to foreign markets.
Among the bigger St. Louis area companies that have gained from China's rapid expansion is Sigma-Aldrich Corp., which makes a wide range of chemicals used in the life sciences sector. The Asia-Pacific market accounted for about 20 percent of Sigma-Aldrich's $2 billion in revenue last year.
Gilles Cottier, president of research essentials at Sigma-Aldrich, said Japan is Sigma-Aldrich's largest export market in Asia, but the Chinese and Indian markets are growing at a very fast pace as both countries expand research and development in life sciences.
"Ten years ago, our sales in countries like China and India were small, compared to Brazil and Russia," said Cottier. "Now China and India have outpaced those two countries."
From the St. Louis Business Journal. Friday, April 18, 2008
Brown Shoe anchors $568 million project
Brown Shoe Co. is expanding its headquarters in Clayton within a massive $568 million mixed-use development that will be one of the largest commercial developments under way in St. Louis County.
The state approved subsidies this week for Brown Shoe's planned new global headquarters, on the heels of the company's two-year search effort that could have meant the loss of one of St. Louis' oldest and largest public companies. The state's approval moves forward Brown Shoe's plans for a headquarters that will anchor a mixed-use project with 1.25 million square feet of office space, 300 condos, a hotel and 70,000 square feet of retail space on the 12.5 acres where the company is based at 8300 Maryland Ave.
The project's development team, including Clayco Chief Executive Bob Clark, traveled to Jefferson City this week to make the case for $6 million in tax credits for the project. Details for the mixed-use project were presented to the Missouri Development Finance Board on April 15. The board, led by Chairman and Lt. Gov. Peter Kinder, unanimously approved the tax credits. Additionally, Brown Shoe's request for $8 million in BUILD bonds for construction was approved.
"You could sit on this board for five years and not see a project as good as this," Kinder said.
Clark said the project is in the earliest design stages and still must go through a variety of zoning and other approvals. "We are winding our way through what is a very complex process," Clark said. "Brown Shoe's goal and objective is to bring their people together in one place."
Clayco, a developer and general contractor, and developer U.S. Equities Realty of Chicago, the 50-50 co-developers on the project, also will make a total cash contribution of $12 million to cover infrastructure costs related to the development. Clayco and U.S. Equities Realty plan to own the development site and will ultimately lease more than 300,000 square feet of office space back to Brown Shoe. David Hutkin, principal of St. Louis-based Hutkin Development Co., will have a minority ownership stake in the development and will oversee the retail portion.
Clark said the development team is interviewing local and nationally based branding companies to develop a name and other marketing materials for the project.
The development team also has requested tax abatement from St. Louis County and other forms of public subsidies, including those available under Chapter 100 Planned Industrial Expansion Authority and Chapter 99 Tax Increment Financing. All public subsidies, including the approved state tax credits and BUILD bonds, will total an estimated $43 million, according to Brown Shoe.
"We are in discussions with Brown Shoe as to a potential abatement for the development," said St. Louis County Economic Council President and CEO Denny Coleman. "Brown Shoe is a very prestigious company, and the comprehensive nature of the proposed mixed-use development, which their new headquarters will anchor, will be one of the most exciting developments in the county's history."
Brown Shoe is a $2.4 billion company and is one of 20 Fortune 1000 companies with corporate headquarters in St. Louis. The footwear company has 13,000 employees worldwide. Brown Shoe's retail division, Famous Footwear, has 1,100 stores.
Brown Shoe announced April 10 that its Famous Footwear division will relocate 270 jobs here later this year from its current base in Madison, Wis. In total, Brown Shoe plans to add between 500 and 700 jobs in St. Louis over the next five years, according to the company's application for state tax credits. Brown Shoe currently employs 650 people at its corporate headquarters in Clayton.
Plans call for Brown Shoe's employees to continue working out of the company's current 70-year-old headquarters building while construction is under way next door on a 15-story, 650,000-square-foot building. The campus, designed by St. Louis-based Forum Studios, will accommodate Brown Shoe's future growth needs and several hundred thousand square feet of additional office space will be available for lease by outside tenants.
Brown Shoe's building will be constructed on the site of a vacant office building at 8500 Maryland Ave. Brown Shoe bought two buildings, at 8400 and 8500 Maryland, from Sara Lee Corp. in January 2007 for $11.5 million. Construction on that building is expected to span two years and be completed in mid 2010. The company will keep the shoe sculpture that sits outside its current headquarters.
After the first phase is completed, Brown Shoe's existing 223,574-square-foot headquarters building and the 8400 Maryland building will be razed to make way for the second phase of development, which will include two office buildings totaling 600,000 square feet of office space, a hotel, a 2,000-car parking garage and as many as 300 condos. "It will be a landmark project," Clark said.
Brown Shoe also is negotiating with the Clayton School District to acquire several adjoining parcels that total about an acre on the campus of Clayton High School for the second phase. The development team has presented its request to the Clayton School District but has not yet received approval from its board.
Several economic development entities, including the Missouri Department of Economic Development, worked with Brown Shoe to assemble an incentive package to help retain the company. Dubbed "Project Beacon" by state and local economic development officials, the search process first began in 2006. Missouri Department of Economic Development Director Greg Steinhoff said Dallas and Madison, Wis. -- the two other sites Brown Shoe had on its short list to build its headquarters -- were considered strong contenders by Brown Shoe.
"They did a thorough evaluation of those communities," Steinhoff said. "This was a battle." He said Clayton retained Brown Shoe's headquarters because it made the best business sense for the company. "We won because the package was attractive."
In a statement on Apri1 10, Brown Shoe Chairman and Chief Executive Ron Fromm said the new headquarters will enable the company to attain its goal of doubling its rate of profitability while doubling sales. "As part of the strategic earnings enhancement plan we announced in 2006, we determined that creating one greatly connected footwear company is the right thing to do for our business."
Diane Sullivan, Brown Shoe's president and chief operating officer, said as the company weighed the option of a headquarters relocation elsewhere it considered its history and heritage in St. Louis. It also concluded it would be less disruptive and less costly to move 270 jobs from Madison to Clayton than to move 650 people from Clayton to Madison, she said.
"Clayton is convenient, close to the airport, has great restaurants, and the work force is hard working and no nonsense," Sullivan said. "St. Louis has forward momentum. It added up as the right fit for Brown Shoe."
From the St. Louis American. Wednesday, April 16, 2008
Ollie Dowell Communications flies high with Lambert By Chris King
It would be appropriate for Ollie Dowell to celebrate with a spa treatment or two.
Yesterday her company, Ollie Dowell Communications, LLC, was awarded as the 2008 Women Business Enterprise of the Year by the airport’s Disadvantaged Business Enterprise Program.
That’s something to celebrate.
Dowell recently celebrated her 51st birthday - and she did so in Detroit, with a spa party thrown by her sister, Beverly Thacker.
“I don’t even want tell you how much money I spend on spas,” Dowell said.
“Right now I have two spa treatments booked, a $95 full-body massage and a $75 facial.”
In fact, a partnership in a local spa project is one of the contracts with the airport that earned her the WBE award. Her company will provide public relations and marketing for Xpress Spa, which is building two full-service spas at Lambert, one in the main terminal and one in the east terminal.
“On a day like today, when hundreds of people are stuck in the airport, they are going to need a massage, a pedicure, a manicure,” Dowell told the American last Thursday.
She said the spas are scheduled to open in the fall.
“Xpress Spas are popping up like Starbucks,” she said. There are 14 in operation and 16 in the works, including the project at Lambert. Her firm only has a contract on the St. Louis project.
Her first contract at the airport evolved from the interview process for a staff job she didn't get. Through the process of applying as public relations director for the airport, she learned of a request for proposals for a vendor to manage personal services. Dowell landed that $1.1 million contract.
She said Ollie Dowell Communications manages “all the training for customer service and the service at the Lambert Airport information and paging booth” and its 12 employees.
Her company also is the PR agency for the Airport Minority Advisory Council, a trade association based in Washington, D.C. Jack Thomas, assistant airport director at Lambert and head of the Disadvantaged Business Enterprise Program for the airport and the City of St. Louis, is the council’s regional director.
“I was just in Washington to lobby at the Capitol for more airport funding,” Dowell said.
“I’ve just sort of carved out a niche in airport contracting.”
Dowell credits Comptroller Darlene Green for helping her manage her airport contracts. Green recently presented a seminar on the subject.
“The comptroller is helping us understand the legal and accounting terms we need to know to help prevent any kind of mishaps,” Dowell said.
Dowell’s previous experience was in journalism. A St. Louis native, she studied journalism at the University of Missouri. After working as a TV reporter in Toledo, she returned to St. Louis as a reporter and anchor for Channel 30 in the mid-1990s “until they got rid of the News Department,” she said.
She was then a KMOX reporter from 1997 until she left the station to accept a position as PR director for the Metropolitan Sewer District in 2002. She has worked in PR ever since and started her now award-winning business in 2004.
Also honored yesterday by the airport authority were Kathleen Brady of Saint Louis University and Adriene Bruce of Ameren (Co-Owners of the Year); Janet Kolb of Dave Kolb Grading (Spirit of St. Louis Diversity Award); and Christine Bierman, Shiela Hudson, Christina Bennett and Sundy Whiteside (WBE Advocates of the Year).
Asked if she missed working in broadcast journalism, Dowell said, “Absolutely, positively not. When there are all these storms and flooding, I do not want be out on an overpass telling people to wear raincoats.”
Dowell lives alone in St. Louis County. She is single and has never married. “But,” she said, “now I am rising up to the level of the man that I want to attract.”
Brown Shoe, the parent company of Famous Footwear, is consolidating its corporate headquarters in suburban St. Louis, a move that will cost Madison some 270 jobs.
The company announced Thursday that it would begin immediately closing its offices at 7010 Mineral Point Road and moving those positions to Clayton, Mo. It plans to complete the move by the fall of this year.
Employees here will be offered jobs in St. Louis or a buyout package of 1.5 weeks of pay per year of service. The company also will offer relocation or outplacement assistance.
"Moving our Madison office, which has the smaller population of the two, will be the least disruptive to our business and our employees, enabling us to continue providing great products and service to our customers," said Famous Footwear President Joe Wood. "Nevertheless, we understand this will be difficult for some of our people, and we are committed to easing this transition for them."
Wood, who will be relocating himself, said it was too early to determine how many people might make the move to St. Louis.
Famous Footwear also employs about 130 people at its 750,000 square-foot distribution center in Sun Prairie. The firm also operates four retail stores here. Those operations are not affected by the move.
Brown Shoe said it will consolidate operations at its 12-acre site in Clayton, which houses its current headquarters and approximately 650 employees. Another 500 to 700 positions could be added there over the next few years, it said.
Also, Brown Shoe said it would take advantage of various Missouri economic development programs and eligible incentives totaling more than $43 million.
"This proposed redevelopment project is very exciting for our state and it assures the creation of about 700 new jobs and the retention of 600 existing jobs," said Missouri Gov. Matt Blunt.
Tony Hozeny, a spokesman for the Wisconsin Department of Commerce, said the state worked with Madison officials to try to land the Brown Shoe headquarters, but it wasn't enough.
"We put a very aggressive and complete package together," he said. "We really went after it."
Hozeny would not disclose how much was offered or what sort of package was put together.
Madison Mayor Dave Cieslewicz said today that he was "very disappointed by this decision."
"The city of Madison worked closely with the Wisconsin Department of Commerce, the Greater Madison Chamber of Commerce and others to develop an attractive package of incentives for Brown Shoe," he said. "I personally traveled to St. Louis to make the case for Madison, and city staff and I were in frequent communication with the company."
While rumors of a move have circulated for months, the decision today caught many Famous Footwear workers by surprise.
"We were blindsided today, as the message given a few months ago was that nothing would happen real soon," said an employee who did not want their name used. "We figured it would eventually happen, but thought we had some time."
The Madison area has absorbed the loss of several corporate headquarters over the past few years including Rayovac, American Girl, Lands' End and Nelson Industries. Those companies have maintained some operations here, although top brass is now located elsewhere.
Cieslewicz said despite the loss of nearly 300 jobs, the local economy remains strong.
"Our 3.5 percent unemployment rate is the lowest of any city in Wisconsin, and one of the lowest in the nation," he said. "But today's news reminds us that if we want our economy to remain strong, we need to aggressively implement our new economic development plan and other initiatives."
In the case of Famous Footwear, Brown Shoe announced in 2006 that it planned to consolidate its headquarters at one location. The firm is the 14th largest in St. Louis, with some 12,700 full-time and part-time employees.
It had hired a firm to research either moving its headquarters, expanding at its current site or moving elsewhere. Dallas, Madison and St. Louis had all been mentioned as possible sites.
The company markets shoes under the Naturalizer, LifeStride, Connie and Buster Brown brand names. In 1981, it acquired Famous Footwear, which started in Madison in 1960 as Neil's Factory Outlet Shoes at Todd Drive and the Beltline.
"This move will aid in achieving our vision of being a leading fashion footwear marketer as it will foster collaboration, increase our speed to market and strengthen our connection with consumers," said Brown Shoe Chairman and CEO Ronald Fromm. "Additionally, we believe it will further enable us to attain our goal of doubling our rate of profitability while doubling our sales."
In addition to Famous Footwear history, Brown Shoe has its own Wisconsin link. Fromm is a graduate of UW-Milwaukee and served as executive vice president of Famous Footwear before relocating to St. Louis in 1999.
The company said it expects pre-tax expenses of $25 to $30 million to implement the transition. That includes people-related costs for relocation, severance and retention, as well as asset write-off and lease termination costs.
Established in 1878, Brown Shoe has been part of the St. Louis community for 130 years. Its history includes launching the Buster Brown children's footwear brand at the 1904 St. Louis World's Fair.
Famous Footwear has 1,100 stores nationwide offering more than 80 brands.
Brown Shoe said it will continue its support of major charitable and civic partners in the Madison community for the next three years, and honor all longer-term commitments.
APRIL 10, 2008 -- A giant shoe sculpture sits in front of the Brown
Shoe Co. building on Maryland Avenue in Clayton.
( Huy R. Mach/P-D)
By Gail Appleson
ST. LOUIS POST-DISPATCH
04/11/2008
Brown brings good news to St. Louis
Brown Shoe Co. has decided that St. Louis is the right fit after all.
After considering a move out of the area, Brown Shoe will stay put, and move Famous Footwear from Madison, Wis., to its 12-acre Clayton campus.
On top of 650 jobs already in Clayton, Brown Shoe will transfer 270 Famous Footwear jobs and expects to create another 230 to 430 positions over the next several years.
Brown Shoe's decision follows Macy's announcement in February that it would close its Midwest regional headquarters downtown.
"We're elated. This is a huge, huge win for St. Louis and the entire region," said Dick Fleming, St. Louis Regional Commerce and Growth Association president and chief executive. "We are keeping a cherished headquarters, and there is also a prospect for significant expansion of that headquarters."
After the company decided to combine its Famous Footwear and Brown Shoe operations, the location was narrowed to Clayton or Madison.
Clayton was picked, in part, because it was less disruptive moving 270 employees to Clayton than 650 employees to Madison, said Diane Sullivan, Brown Shoe's president.
"We have 130 years of history in St. Louis," she said. "Our roots are deep and they mean a lot to us. St. Louis is still the right fit for Brown."
All Madison employees will be offered jobs in Clayton and relocation assistance. The move is expected to start in mid-July and be completed by late October.
The transition is expected to cost Brown Shoe $25 million to $30 million for relocation, severance and other expenses.
Brown, which is both a retailer and wholesaler, can better react to consumers' style choices and more quickly move products to the market by combining Famous Footwear and Brown Shoe into a single headquarters, Sullivan said.
Plans are still being developed as to how Brown's Clayton property will be used, Sullivan said. The company owns two vacant office buildings on the site, along with the headquarters building.
"I am absolutely delighted and excited about the announcement," said Clayton Mayor Linda Goldstein. "We'll be working together to determine what their specific plans are and what their facility needs are."
Famous Footwear is a family shoe store chain with about 1,100 stores and plans to open about 100 more this year. It has been in Madison since 1960, when it opened its first store as Neils Factory Outlet Shoes.
In the mid-1970s, the company renamed the stores Famous Footwear. Brown Shoe bought the company in 1981.
Brown Shoe, which once was based in downtown St. Louis, has been at its Clayton headquarters since 1952.
In addition to Famous Footwear, Brown Shoe operates 300 specialty retail stores in the U.S. and Canada under the Naturalizer, FX LaSalle and Franco Sarto names.
Brown also has an e-commerce subsidiary called Shoes.com. Its wholesale divisions market a range of brands including Naturalizer, Via Spiga, Dr. Scholl's, Etienne Aigner and Carlos by Carlos Santana.
Associated Press
By JIM SALTER 04.10.08, 5:22 PM ET
Brown Shoe to Stay in St. Louis
ST. LOUIS - Brown Shoe Co. will remain in suburban St. Louis and add hundreds of new jobs over the next several years, the company said Thursday.
Brown Shoe had been considering a move to either Dallas or Madison, Wis., where its Famous Footwear division has been headquartered for several decades. Now, the Madison operation will be moved to Brown's headquarters in Clayton, Mo. The 270 Madison-based employees will be offered jobs and relocation assistance. Those choosing not to relocate will be given severance packages.
But the expansion in St. Louis goes beyond the jobs coming from Madison. Brown Shoe expects to eventually create an additional 230-430 jobs.
Ronald A. Fromm, Brown Shoe's chairman and chief executive, said the company "determined that creating one greatly connected footwear company is the right thing to do for our business."
He said the consolidation and expansion "will further enable us to attain our goal of doubling our rate of profitability while doubling our sales."
Brown Shoe shares rose 41 cents, or 2.7 percent, to $15.85 on Thursday.
Missouri, St. Louis County and Clayton provided $43 million in incentives to help fund training and job creation, as well as for redevelopment of the 12-acre headquarters site, Brown Shoe president Diane Sullivan said.
"We just thought that after 130 years, St. Louis was still the right fit for Brown Shoe," she said. "It made our future here the least disruptive to our business."
Gov. Matt Blunt called the decision "an exciting announcement for our state."
Wisconsin Department of Commerce spokesman Tony Hozeny said the city and state offered a "very aggressive and competitive package" of incentives to convince Famous Footwear to stay put. In the end, he said Brown Shoe made a business decision to relocate.
"The company has been here a long time and these are quality jobs," Hozeny said. "We wanted to retain this facility here."
Brown Shoe is a $2.4 billion company with about 13,000 employees worldwide, including about 650 currently at its suburban St. Louis headquarters. In addition to Famous Footwear, Brown Shoe operates about 300 specialty retail stores in the U.S. and Canada under the Naturalizer, FX LaSalle, and Franco Sarto names, and operates an online division as Shoes.com. Its wholesale division also owns and markets footwear brands that include Naturalizer, LifeStride, Via Spiga, Nickels Soft, Connie and Buster Brown.
Famous Footwear was founded in Madison in 1960 under a different name. Brown Shoe acquired the chain in 1981. Famous Footwear is now one of the nation's largest footwear retailers with 1,100 stores. Plans call for an additional 100 stores this year.
Brown Shoes to move Madison, Wis. employees to St. Louis headquarters
SAN FRANCISCO, Apr. 10, 2008 (Thomson Financial delivered by Newstex) -- Brown Shoe Co. (NYSE:BWS) said late Thursday it will move employees from its Madison, Wis.-based retail division to its headquarters in St. Louis.
All 270 Madison-based employees will be offered jobs and relocation assistance, the company said.
Brown Shoe expects the relocation of employees to St. Louis to begin during the second quarter and be substantially complete by the end of the third quarter.
The company expects pre-tax expenses of $2 million to $30 million, or 37 cents to 44 cents a share, related to the relocation.
Brown Shoe owns a 12-acre property in St. Louis County's City of Clayton, which houses its current headquarters and 650 employees, and two adjacent office buildings not currently in use.
