The City of St. Louis is close to approving economic incentives aimed at helping the prominent Anders CPAs + Advisors accounting firm stay in the region’s downtown and double its workforce over the next decade.
The legislation, sponsored by Ward 8 Alderwoman Cara Spencer and Ward 14 Alderman Rasheen Aldridge, would establish a mechanism for the city to reimburse 85% of Anders’ payroll, earnings and net profit taxes from new hires at the firm. The full Board of Aldermen plans to consider final passage of the bill this week.
“We’re seeing a lot of business interests and businesses leaving our downtown,” Spencer said while presenting the legislation to the board’s Housing, Urban Development and Zoning Committee. “I’m excited that Anders wants to double down and make an investment in downtown.”
Her legislation would form an agreement between the city and Anders over the next 10 years under which the company would only receive the reimbursements if it has more than 224 jobs with an average wage above $100,000 a year.
Spencer clarified that the 85% reimbursement rate would only apply to taxes generated from new hires and not to the existing payroll, earnings and net profit taxes the company pays. She said it wouldn’t apply if Anders brought on new employees by acquiring another firm.
“Making sure that’s true organic growth for our business community here in the city,” Spencer said. “It has to be a net increase.”
Anders partner Craig Campbell said the firm has been located downtown since 1965, first in the Railway Exchange building, later at 705 Olive and currently in the Bank of America Plaza at 800 Market. Occupancy in that building has dropped in recent years, making it challenging for the firm to stay committed to downtown, he added.
“We see our firm succeeding in the city, and we’d like to continue to be part of the revival of downtown,” Campbell said. “We’re looking for a partnership to continue our growth.”
The reimbursed tax revenue wouldn’t just go back to the company’s balance sheets, but instead would support $2.2 million in capital improvements Anders plans for the roughly 60,000-square-foot office space it currently occupies.
“We’re in the process of continuing to hire new graduates to join our firm,” Campbell said. “Part of that entails making sure that the office space is state-of-the-art and is attractive for young people in technical careers.”
This type of redevelopment project hasn’t been as common for the city in recent years, said Maggie Kost, chief business attraction officer at Greater St. Louis Inc. Many of the new projects coming to St. Louis have been industrial or lab projects, she said.
“We are not seeing a lot of office projects,” Kost said. “So when we do have an employer, especially an office tenant, we want to make sure that we’re really fighting for that job creation that’s happening here in particular.”
St. Louis’ downtown office vacancy rate is slightly higher than the national average, she said. One reason is that the region’s urban core has more lower-grade available office space that isn’t as attractive, Kost said.
“We want to make sure our companies, employers, developers and building owners are investing in their space and bringing that up to the quality that [they] need to retain and recruit new employees,” she said.
The proposal did draw concerns from board members, who expressed concern about the appearance of removing a company's obligation to pay the city’s earnings tax.
“That is just such a big part of how the City of St. Louis pays its bills,” said Ward 1 Alderwoman Anne Schweitzer.
The 1% tax levied on the salaries of people who either live or work in the city makes up a third of the city’s general revenue fund. It has become less certain recently, as it must be reauthorized and has been challenged in lawsuits.
“I don’t think [reimbursing earnings tax] is something that we should be using lightly and often,” Spencer said. “Moving forward I do not want to set a precedent that this is something we’re doing across the board.”
Spencer called Anders’ case unique as its current building is in receivership, meaning the firm doesn't have an owner with whom to directly negotiate rent. And she added that if Anders were to leave the city while under the agreement with the city, it wouldn’t receive any abatement or value.
Ward 7 Alderwoman Alisha Sonnier added that what Anders was asking and committing to helped ease her concerns about approving such an agreement and tool that she said board members should be skeptical of.
“It’s the full package that does make it work,” Sonnier said. “Having such an ambitious growth goal of 200 employees [and] being a business that has some history [downtown]. You didn’t just come and ask for this right away.”
The proposed legislation is set for third reading and final passage at the Board of Aldermen this Friday.
