Schlichter honored with St. Louis Award
This article originally appeared in the St. Louis Beacon. - When it comes to St. Louis, Jerry Schlichter is bullish on the future. It’s a sentiment he hopes the entire country will share one day.
“I think there is a pent-up feeling on the part of a lot of people in St. Louis that they want to change the national narrative that we all know and are tired of,” he said. “(We need) a different narrative about St. Louis as a great place for startups and early stage companies.”
Schlichter, co-founder of Arch Grants, is working to do just that. And for his efforts, he is receiving the St. Louis Award. Schlichter will be the 86th person to receive the award, which has been handed out since 1931. It was created by philanthropist David P. Wohl, a fact Wohl kept secret until his death in 1960.
The award goes to a resident of the St. Louis area who “during the preceding year, has contributed the most outstanding service for its development … or [who] shall have performed such service as to bring the greatest honor to the community.”
As for this year's recipient: “My view is that if you live in a community you ought to care about the community,” Schlichter said.
Caring about the community is something the Mascoutah, Ill., native has specialized in during a long career in the legal profession, a field which has brought him notoriety both locally and at the national level.
Schlichter held down two jobs in college but still managed to earn his degree in business administration from the University of Illinois in just three years. The school returned the favor by offering him a full-ride scholarship to study law. His response however was a surprising one.
“I turned it down,” he recalled with a smile.
Instead, Schlichter made his way to the West Coast to get his law degree from UCLA where he was active in the campus political scene, taking part in protests over Vietnam and civil rights.
In some sense, the very idea of law school might have seemed a strange choice for Schlichter who didn’t know any attorneys growing up and had little background knowledge about the field. “I didn’t know what I wanted to do. I thought going to law school would be a way of deferring making a decision while learning about how society works in the process so that whatever I ended up doing, it would be helpful,” he said. “Then I got involved and I saw the impact that can happen with using law in a way that benefits others.”
He began dispensing that help upon returning to the area after school and being a plaintiff’s lawyer in East St. Louis. He eventually moved to the Missouri side of the river, and in 1989 set up offices in downtown as the founding partner of what would become Schlichter, Bogard & Denton, where he still serves as managing partner.
“It was raw space when I started. I had boxes lined up on concrete floors when I founded the firm,” he chuckled. “I’ve been here as long as the building has.”
Schlichter has always represented individuals, whether they are plaintiffs in product liability cases, railroad workers claiming discrimination or residents of the former Missouri town of Times Beach suing over dioxin contamination.
More recently, he has taken cases relating to allegedly excessive retirement plan charges, a matter which has earned him coverage in the New York Times.
“We spent almost two years looking into industry practices and I came away convinced that a lot of people were being charged excessive fees in their 401k plans, which can make a big difference in retirement,” he said. “No one had filed any lawsuit about this ever. The Department of Labor, which oversees all 401k plans, had never brought any enforcement actions for excessive fees.”
That case, like others he’s handled, represented a huge amount of risk and required a large commitment of resources, time and money, often based only on a passionate belief in the case. In some ways, Schlichter said it mirrors his work in the entrepreneurial community.
“It’s entrepreneurial law – not that different from a start up,” he said. “If the business doesn’t succeed, you don’t get anything.”
Schlichter’s desire to help people also extends to helping the community, often by seeing a problem and trying to find the right solution. For example, during the 1980s, fSchlichter said the Gateway City led the nation in historic rehabs, using federal tax credits. But when those credits dried up so did the work of preserving St. Louis’ rich architectural history. Unable to demand the high rents of places like New York or San Francisco, the area lacked much reason for developers to pick up the slack.
“Everything died,” he recalled. “And it was depressing frankly to see that there was nothing going on and we would lose these great assets, these wonderful buildings.”
The frustration was intensified by fights over demolition permits, crumbling cornices and fenced off buildings. “We have turn-of-the-century residential and commercial architecture that many cities would kill for, yet without some kind of incentive, the numbers don’t work for rehab of those buildings,” he said. “It’s costly for things like asbestos removal.”
The answer lay in new tax credits; and in 1998, Schlichter helped build a coalition at the state level that created exactly that. Since then, Schlichter said that about $7 billion in historic rehab has taken place in the state. Once again, the city is a leading light in the country for urban areas looking to rebuild their historically valuable infrastructure. About $4 billion of work has been done in St. Louis alone.
“We’ve become a national model for historic rehab,” he said. “To this day, I get calls from all over the country asking me how we did it.”
In many ways, Schlichter’s work with the historic building tax credit would presage his efforts with Arch Grants. Both were driven by the same motivation: the idea that St. Louis could do better whether with preserving buildings or creating businesses from the ground up. It’s why he returned to St. Louis in the first place.
“I chose to come back here because I think there is an authenticity to people and it is a quality of life that is not easily duplicated,” he said.
Sustainability -- not ‘one and done’
In helping to create Arch Grants, Schlichter knew quickly that he didn’t want to duplicate a standard-issue business plan competition that would take a chunk of equity in the target company. Instead, Schlichter believed the best option was a nonprofit grant initiative.
That would give two advantages,” he said. “One, this opportunity in St. Louis would be more attractive to startups because they wouldn’t have to give up any part of their company. And two, the companies themselves would be more attractive to follow-on investors because they’d have 100 percent of their company retained and thereby be able to give a bigger piece to an investor. Follow-on capital is so critically important to the life of a startup.”
Instead of a “one and done” deal, the idea was to build something sustainable.
“We wanted to be sure at the outset that we had the ability to do this for multiple years and that we have scale,” he said. “By that I mean enough companies that some of them would bubble up. It’s like fishing lines. You put out enough fishing lines and you are going to get some bites.”
The result was Arch Grants. It opened early last year with the intention of awarding $50,000 grants to entrepreneurs who were either already in town or willing to relocate to the St. Louis area. This year, the program, which attracts hundreds of entrants, expanded to 20 companies from 15.
That’s good news for Schlichter. He said that innovation in the region hinges on the fate of companies like the awardees.
“We historically had a disproportionately large number of Fortune 500 companies headquartered here. Success was typically defined as going to work for one of those companies and after 30 years retiring with a gold watch, much like in other cities,” he said. “But there wasn’t a real entrepreneurial culture in St. Louis and there weren’t a lot of jobs in (start up companies). Many of (the Fortune 500) companies have either been acquired, moved, downsized or some combination, and if we are going to be a robust entrepreneurial city that attracts and keeps young people and builds companies, we’re going to have to do it from the ground floor.”
Schlichter said that the innovative energy he’s seen here hasn’t existed before and funding sources are increasingly interested in St. Louis start ups. Being a part of an early-stage company is now a genuine career option in a way that it wasn’t just five years ago.
“You can have an impact in St. Louis. You can make a difference in a way you can’t in someplace like New York City or LA or San Francisco,” said Schlichter. “People really care about the community here. It’s a combination of authentic values, quality of life and a community that has a lot of richness.”
Schlichter has also played a role in other aspects of the community. He and wife, Sue, founded the not-for-profit Mentor St. Louis nearly a decade ago. The initiative, which places volunteer mentors in the lives of children in the city’s public schools, arose partly out of Schlichter’s experiences volunteering with youth during a stint in New York City.
“Just getting out and interacting with the kids, I saw what a difference a little bit of attention would go toward kids who maybe had a single-parent upbringing or had difficult lives. I came away with the view that those early years are so important,” he said.
Eventually, the Schlichters’ effort would become the mentoring arm of Boys and Girls Club of St. Louis.
Now with Arch Grants and his position as co-chair of the Economic Development Advisory Council for the Partnership for Downtown St. Louis, he is hoping to impact a different group of young people, those who are trying to change the world themselves.
“One of the realities is that a lot of young people with options about where they live aren’t here. Many young people no longer go to where they get a job,” he said. “They choose a city they want to be in and then they go there and look for a job. We need to be on that list.”
- Hometown: Mascoutah
- Education: B.S., business administration, University of Illinois; J.D., UCLA
- Admitted to the bar: California (1972); Illinois (1973); Missouri (1982).
- Career: Founding & managing partner of Schlichter Bogard & Denton LLP, St. Louis
- Past national president, Academy of Rail Labor Attorneys
- Community involvement: Founder of Arch Grants (Winning entrepreneurs stay in or come to St. Louis and receive $50,000 and such support services as mentoring, housing and office discounts and free legal and accounting services.)
- Driving force behind the Missouri State Historic Tax Credit, the Missouri “Rebuilding Communities Act” and the “Neighborhood Preservation Act”
- On the board of Community Improvement District of the Partnership for Downtown St. Louis
- Co-chairman of Economic Development Committee of the Partnership for Downtown St. Louis
- Co-founder of Mentor St. Louis, which finds adult mentors for elementary students in the St. Louis Public School System
- Awards include multiple listings in the peer-selected Best Lawyers in America, the Levee Stone Award and "What's Right With the Region Award"