The September 2019 analysis of hotel rooms commissioned by Otis Williams and the Land Clearance for Redevelopment Authority illustrates how city government spends extraordinary amounts of time, money and resources planning public giveaways to private enterprise. The report presents foregone conclusions that the city must subsidize not only new hotels but also provide financial incentives to upgrade existing hotels in the central corridor of St. Louis.
There is a large section of the analysis that points to cities with similar tax giveaways like Kansas City, Memphis or Indianapolis to justify contributing public money to private enterprise. The report’s conclusions find that developers want the same tax incentives in every market, cautioning St. Louisans, “Offering the familiar provides a sense of comfort to the developer.”
These aren’t mom-and-pop businesses. The top nine North American hotel chains with revenues over $1 billion have profits of up to hundreds of millions of dollars a year. The report does not attempt to answer what happens if you completely stop handing public wealth to corporations.
The author, Chesterfield firm H&H Consulting, says part of the problem is a lagging hotel occupancy rate in St. Louis as compared to other cities. Yet, the report does not detail how the poor condition of the city outside the central corridor is a major factor in the desirability of St. Louis as a place to visit.
The report goes on to say (their emphasis), “National developers pit city against city and go where their efforts would generate the most benefit. This is true even if a project makes sense without inducements or assistance.”
The real question is why do city officials participate in a broken system like this? There are many other innovative capitalist solutions. Building a better city is central to those solutions. There should be a vision for a city that includes everyone, not just wealthy deal-makers. The corporate tax breaks with the most direct impact on the average citizen, tax-increment financing and property-tax abatements, have cost St. Louisans $1 billion since the year 2000.
A billion dollars would build four of those north-south light rail lines that there is perpetually no money to build. The diversion of public funds hurts the city. I live across from Fanning Middle School in St. Louis. There is peeling paint around all of the school windows and doors, and the long window wells on either side of the entrance are full of trash. The front doors are ruined from neglect. The school has been like this for years.
The condition of Fanning school is symbolic of how city leadership feels about the people and neighborhoods of St. Louis. They wonder why children are dying when the adults running things can’t be bothered to love and respect the children enough to provide them with healthy, clean environments for their education.
Transferring public wealth to the wealthy is not working. After 20 years, the situation in St. Louis for jobs and revenue is the same or worse. This is even as population loss and stagnation continue, and crime problems are not being addressed.
There should be a citywide plan that includes north and south St. Louis, a plan that encourages small-scale capitalism, pedestrian access and transit-oriented economic development. New public spaces should be built, along with squares and plazas designed as transit centers to promote local markets and encourage commercial development. Public spaces like fountains and squares can be used to humanize the environment and transit used to tie attractions, market streets, squares and the city together.
Vendors, instead of being illegal almost everywhere in St. Louis, should be given many options, tax- and license-free, with little expense to encourage free enterprise. The standard should be allowing the grandma who has extra tomatoes to sell for a few months in the summer to pocket that money instead of paying for business licenses, fees and taxes.
Sweeping changes must be made in St. Louis. Policy should be addressing climate change and economic inequality, not bribing the wealthy for their presence. The bankrupt form of capitalism the report describes should be abandoned with a return to the basic purpose of a city: meeting the needs of its citizens while creating attractive surroundings with abundant economic opportunity. This is how old St. Louis was built and succeeded far beyond the hollowed out city that is St. Louis today.
Greg Michaud consults, writes about and lives in south St. Louis.