The St. Peters Board of Aldermen has voted to issue $50 million in industrial revenue bonds to build a 496,209-square-foot FedEx complex in the Premier 370 Business Park that may generate close to 300 full- and part-time jobs.
The board voted 7-0 last month to approve the resolution issuing the bonds. Scannell Properties, an Indiana-based commercial real estate company, will build and develop the facility on 113 acres on the east side of Spencer Road and the south side of Premier Parkway. The city will lease the project to Scannell, which will sublease the project to FedEx.
State law allows a municipality to issue the bonds and act as a conduit for financing. However, FedEx will make payments covering the principal and interest of the bonds.
The plan and city cost-benefit analysis for the project states the city will provide a 10-year abatement of property taxes of up to $5.84 million involving 10 local taxing jurisdictions and the state of Missouri. The abatement is up to 50 percent of property taxes that would have been due without an agreement. The company would make payments in lieu of taxes, a repayment method known as PILOTS. Property taxes without the abatement would be $11.6 million.
The Fort Zumwalt School District, the largest property tax recipient affected, would receive $3.58 million between 2019 and 2028 in PILOTS, compared to $7.17 million in that period without the abatement.
According to the plan and analysis, the size of the annual property tax break will be based on the number of and benefits for employees. The cost-benefit analysis for the project assumes at least 125 full-time jobs, having an average base wage of $16 an hour, beginning in 2019 and maintained through the 10-year lease with the city, and associated health insurance.
Scannell and FedEx will receive up to 1 percent tax abatement for every two full-time “quality jobs,” with the abatement capping at 50 percent.
Currently, the property is generating little tax revenue. The assessed valuation for the 78 acres of the site owned by the Lakeside 370 Levee District is zero. The district provides levee protection for the park that is along the Mississippi River floodplain. The assessed valuation of the remaining 35 acres is $3,624.
There will be no abatement of personal property taxes on an estimated $51 million in equipment; however, the city is granting a sales tax exemption on building materials. If $19.6 million in construction materials are purchased in Missouri, the valuation of that exemption to the state would be $828,100.
According to the analysis and to secure bond financing, FedEx has stated that 53 full-time jobs and 237 part-time jobs will be generated at the site.
The analysis also cites other benefits to the city including anticipated growth in construction jobs during construction and workers contributing to the local economy.
The project will “provide collateral benefits for local suppliers during the construction period” and an increase in businesses that support the project’s employees and operations. “These ancillary impacts were not measured for purposes of this plan,” the analysis states.
City officials say the FedEx facility will expand package distribution in the region.
The city has been working for years to develop the more than 800-acre development at Hwy. 370 near Interstate 70. Several projects, some using industrial revenue bonds, are already underway.
Work on Premier 370 was stalled for years by a court battle with Great Rivers Habitat Alliance, an environmental group and St. Charles County. The suit was settled in 2012. The levee district also settled a debt restructuring issue involving the levee that protects the business park.
County Executive Steve Ehlmann has long opposed developing the floodplain. He spearheaded a state law passed to prohibit the use of tax-increment financing for development on the floodplain. In 2015, St. Peters officials were unsuccessful in getting the county government to ease a ban on residential housing on the floodplain. That opposition is still there. During the public comment portion of board’s Sept. 28 meeting, David Stokes, executive director of Great Rivers Habitat Alliance, urged St. Peters aldermen not to approve the resolution.
He said he didn’t want to refight some of the issues that were settled in the lawsuit but he said he knew the harm of subsidies.
“If this development is economically viable it should stand on its own without $5.8 million in corporate welfare,” Stokes said. “And that’s what it is, corporate welfare.”