This article first appeared in the St. Louis Beacon, March 2, 2011 - Gov. Jay Nixon and St. Louis Mayor Francis Slay joined Peabody Energy executives today at an event to announce that Peabody is keeping its headquarters in downtown St. Louis -- and turning back $10 million in federal "new-market tax credits'' aimed at stimulating job growth.
Nixon said later that he couldn't recall another case where a corporation has declined to accept tax breaks. "It's very significant,'' the governor said, adding that the money likely will be directed to other potential or existing city businesses.
"It shows this company is committed to the region," Nixon added.
Peabody chairman Gregory Boyce said that the energy firm -- a Fortune 500 company -- has signed a 15-year lease for its current location in the downtown high-rise at 701 Market St., and plans to use $25 million of its own money to renovate its quarters.
Peabody's decision to not accept the $10 million, which is doled out by the city, stems in part from its desire to see the money spur further growth downtown, he explained. "A vital downtown is critical to the regional health," Boyce added, observing that an energetic downtown is important to recruitment.
The company will qualify, and plans to take advantage of, another $2.5 million in city-state tax breaks -- but company and city officials note that money will be doled out only if Peabody adds jobs.
Slay said that the $10 million in federal help is to be used for city economic development, so it can be awarded to other pending applicants.
Peabody had looked at other locations in the St. Louis area, including Illinois and in St. Louis County, Boyce said. But he acknowledged that Peabody's preference had been to stay put, if it could make the necessary changes in its current quarters.
Being downtown and close to the Gateway Arch is good for recruitment and good for business, Boyce said. Throughout the world, when Peabody executives say the firm is based in St. Louis, everybody mentions the Arch, he said.
Slay, in turn, emphasized that St. Louis also benefits by retaining Peabody. "The prestige...is immeasurable,'' the mayor said.
There's also the benefit of jobs and taxes. Peabody's decision means that 600 jobs remain in St. Louis. "They're going to grow their business here, invest in the infrastructure,'' Slay said.
The firm and its employees also pay millions of dollars in St. Louis taxes, including about $1.6 million for the city's earning tax.
Besides lauding Peabody, Slay and Nixon -- who have been at odds on some unrelated issues -- made a point during the news conference of emphasizing their mutual respect and common goals.
"You and I have worked together on a lot of things,'' Nixon said, nodding to Slay. Achievements like retaining Peabody, the governor added, "would not happen without your leadership."
Slay, in turn, emphasized how his office "enjoys our relationship and working with you."
Afterward, the mayor said in an interview that he thought that the press' portrayal of his relationship with the governor had been "largely unfair. We're working together on a lot of things,'' Slay said.
"There's a lot of stuff we can't do (as a city) without state help and cooperation."
Any differences, Slay added, reflected the reality of their different jobs. "I represent the city, he represents the state,'' the mayor said. "He's got a broader constituency."
