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First China Cargo plane lands at Lambert

Friday Sept. 23, 2011 - St. Louis - A ground crew puts stop blocks on the wheels of a Boeing 777 after it landed delivering the first of weekly cargo shipments between St. Louis and Shanghai, China Friday at Lambert-St. Louis International Airport. The plane, from China Cargo, landed just before 5pm and was greeted by an arch of water canons. Christian Gooden cgooden@post-dispatch.com

They have tried and tried but not succeeded. And so they are trying again.

Supporters of Lambert-St. Louis International Airport are heading back to Jefferson City for yet another attempt to boost international cargo flights here. Now a bill to create tax incentives for the effort is starting to pick up speed in the Legislature.

The measure is a more modest version of the controversial Aerotropolis tax credit, which failed to pass the legislature in 2011 despite big support from business people in the St. Louis area.

Gone this time are $300 million in credits to fund real estate development around Lambert. Gone, too, is the lofty name; this version is dubbed the bureaucratic Missouri Export Incentive Act. What remains is an eight-year, $60 million tax credit strictly for air cargo flights from St. Louis.

“We want to keep it simple, and focused,” said Dan Mehan, chairman of the Midwest Hub Commission. “It’s very much slimmed down from what you’ve seen in the past.”

As with earlier efforts, the incentive is designed to lower the cost of shipping through Lambert enough that cargo airlines and freight forwarders — the companies that route most international air freight — decide it’s worthwhile to come here instead of more-established hubs in Chicago, Atlanta or Dallas.

Once that happens, the theory goes, the airport will develop a critical mass that can compete on cargo without subsidy.

“I think if we saw one come, we’d get a second,” said Lambert Airport director Rhonda Hamm-Niebruegge. “You’re not going to get dozens overnight, but people would say let’s give it a shot. Eventually you’d build something.”

But that’s been the plan since the Aerotropolis bill first surfaced two years ago, when it was proposed as a tool to seal the deal with Chinese airlines that Lambert had been courting. Those talks resulted in two flights from Shanghai in the fall of 2011, but those stopped after Aerotropolis died in the legislature, and there’s been none since.

China Cargo still has eight months left on its two-year warehouse lease at Lambert, but the airport now is looking for cargo partners well beyond China, to airlines from other Asian countries, Latin America and Europe. At one point, the airport was “really close” to landing a European carrier, said Hamm-Niebruegge, but it fell through.

Last year, St. Louis County established a $3 million fund to subsidize cargo flights, but it has not been used. Airlines, say Hamm-Niebruegge, worry that they would burn through that pot too quickly; having a program worth $7.5 million a year for eight years will give the effort more staying power.

“It’s so critical for us to have a long-term view,” she said.

A lack of incentives isn’t the only reason cargo has been slow to develop at Lambert. Cargo has been slow everywhere the last couple of years. Air freight shipments globally fell 1 percent in 2011, according to a recent report by Boeing Co., and were down roughly 2 percent through the first eight months of 2012. Freight from Asia to North America — the backbone of Lambert’s earlier effort — was down 5 percent as China’s economy cooled off.

Still, Boeing is predicting global air freight will double over the next two decades, and it makes sense for St. Louis to try to grow with it, said Sen. Eric Schmitt, R-Glendale, who’s sponsoring the new cargo bill.

“It’s important for the airport to remain viable, and cargo is a big piece of that,” he said.

Schmitt heads the Senate committee that is considering the bill and has scheduled a hearing on it for Wednesday. He’ll be a key figure in navigating it through Jefferson City, as will Rep. Anne Zerr, R-St. Charles, who sponsored a similar bill in the House.

The $60 million incentive was the more-popular piece of the 2011 Aerotropolis bill, which was a key ingredient in that fall’s special session. But it eventually got hung up in a broader debate over tax credit reform and died amid opposition to cuts to credits for historic rehabs and low-income housing.

That debate is still unresolved, though both Gov. Jay Nixon and legislative leaders have put economic development at the top of their agenda for this spring.

Both Schmitt and Mehan, who is president of the Missouri Chamber of Commerce, say they’ve heard good things from lawmakers about the cargo credits so far. But both acknowledge that it’s early in the legislative session and that any economic development bill will have many moving parts.

“Hopefully it’s part of a broader plan of how we position Missouri to compete,” Schmitt said. “Seeing how all this fits together is still an ongoing process.”

But, Mehan points out, this is the third time that lawmakers have heard the cargo hub spiel. And maybe, as they say, the third time will be a charm.

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