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Releases new study showing Downtown creates more benefit to City than it receives in funding
Regional business and civic leadership organization Greater St. Louis, Inc. today joined other Downtown employers, leaders, and residents to call on the City of St. Louis to make a landmark investment to enhance Downtown’s infrastructure and public safety.
“As St. Louis is the economic engine of the state, Downtown is the economic engine of the City and the region. Downtown is already the metro’s major employment hub, where nearly 60,000 workers from the City and metro come to work each day. It has a growing residential population and is the front door of our region for millions of sports fans, convention-goers, and tourists each year,” said GSL CEO Jason Hall.
“The pandemic hit Downtown St. Louis and many others hard, and decades of deferred maintenance are catching up. It is long past time for a transformative investment in safety and infrastructure that will attract investment, jobs, and new residents to Downtown so that we emerge from the pandemic stronger. Given the disproportionate impact Downtown has on the metro, we urge City leaders to join the private sector in making a major commitment to funding improvements to help continue to strengthen our urban core.”
The call for investment comes as a newly released economic impact study of Downtown commissioned by GSL found that Downtown generates around four times the amount of General Fund revenue ($102 million) compared to estimated General Fund expenditures for services allocated Downtown ($26 million). The study also found that Downtown generates 20% of the City’s general revenue fund, contains 27% of citywide employment, and is home to a steadily growing residential population – but receives a disproportionately small share – just 5% – of total citywide expenditures.
The infusion of City dollars into infrastructure and public safety would build on numerous private sector investments in Downtown and Downtown West, including Centene Stadium, Union Station, the Butler Brothers Building, 7th Street upgrades, the expansion of Ballpark Village, and others. And numerous businesses have recently announced relocations or expansions Downtown as well, including Advocado, Block (formerly Square), and Scale AI, which recently announced it is moving 200 geospatial jobs Downtown with plans to expand to nearly 500 in the future.
“Public and private investments and partnerships like the Downtown Engagement and Public Safety Initiative have already helped lay the foundation for a resurgence Downtown, and the business community has been proud to be a partner in that effort. We applaud Mayor Jones and City leadership for coming to the table and working through numerous issues that we have addressed over the past year,” added Hall. “We are seeing progress, but there is much more that needs to be done to make Downtown what we all know it can become.”
The group noted that areas to which the funding could be targeted address several elements of the Design Downtown STL plan, which was developed with input from Downtown residents, business owners, and civic leaders and was approved by the City of St. Louis in December of 2020 as the official neighborhood plan for the Downtown and Downtown West neighborhoods.
The public safety and infrastructure investment would install additional cameras throughout Downtown linked to the City’s real-time crime center, finish a Downtown-wide upgrade to street lighting, implement traffic-calming measures on key thoroughfares, and make other critical upgrades throughout the neighborhood.
Downtown leaders expressed their support for new funding for infrastructure and public safety. “Lighting upgrades, traffic calming measures, and additional infrastructure enhancements are all critical needs for Downtown,” said Kelli McCrary, Executive Director of the Downtown St. Louis Community Improvement District. “These types of investments will bring more residents, visitors, and energy to our neighborhood, helping to strengthen public safety in the process.”
Business leaders noted that a major infusion of funds was likely to spur additional private investment Downtown.
“We’ve already seen positive steps taken through Design Downtown STL and the Downtown Engagement and Public Safety Initiative. Putting additional investment behind those efforts would build confidence and help make Downtown a safe, family-friendly neighborhood, and is likely to secure additional private investment that will increase density and activity in the heart of the City,” said Mike Konzen, Chairman & Principal at PGAV and a member of the DEPSI.
A summary of the key findings of the Downtown St. Louis Fiscal Impact Analysis are below.
Summary of “Downtown St. Louis Fiscal Impact Analysis”
In spring 2022, Greater St. Louis, Inc. engaged local firm Development Strategies to analyze the economic impact of Downtown and Downtown West (“Downtown”) on the City of St. Louis.
The report found that Downtown has an economic impact greater than its relative geographic size and that its success is critical to the overall prosperity of the City. Each year, Downtown St. Louis generates around four times the amount of General Fund revenue ($102 million) compared to estimated General Fund expenditures for services allocated Downtown ($26 million). Key factors identified for continued competitiveness of Downtown and its relative contribution to citywide revenues will depend on the following factors: population growth, employment and wage growth, hospitality and retail spending, and real estate development.
Key Findings:
- Tax Revenue: In total, Downtown contributes an estimated $102 million in tax revenue annually, or nearly 20% of the city’s general fund revenue.
- City Expenditures: In total, the city expends $26 million in general fund expenditures annually Downtown, or approximately 8% of total citywide expenditures.
- Employment: There are approximately 57,000 workers Downtown, representing 27% of citywide employment. However, since 2010, Downtown employment decreased by 24%.
- Wages: Based on distribution of employment by sector and average wages by sector, on average, Downtown contributes $4.1 billion annually, or 32% of citywide wages.
- Sector Concentration: Thirty-four percent of private sector jobs citywide are located Downtown. Seventy percent of jobs in the high-wage and high-growth potential sector of professional, scientific, and technology services are located Downtown.
- Residents: Downtown has approximately 10,000 residents, representing just over 3% of citywide population. Downtown population growth has been strong over the last decade, adding 2,300 new residents since 2010 for an increase of more than 30%. This stands in contrast to the 3% decline in citywide population and the 2% increase in regional population during the same period.
- Housing Development: 1,700 new multi-family housing units were added Downtown since 2010, a 24% increase.
- Assessed Value: Despite having a very large share of tax-exempt properties, Downtown contains 19% of total citywide assessed value in just under 4% of total citywide land area.
- Real Estate: Average vacancy rates of just over 9% for multifamily (consistent with citywide average); 14% for office space (higher than citywide average); and 8% for retail (higher than citywide average).
- Hospitality Center: Downtown contains 78% of the citywide hotel room supply with 7,500 rooms, 570 of which have been added since 2010.
The report clarifies the relative positioning and trajectory of Downtown in terms of population, employment, and real estate trends and quantifies Downtown’s relative contribution to the citywide general fund and its share of citywide general fund expenditures.
The study primarily uses data from 2019 (the last year for which some included data is available), with some insights on more recent developments. Data sources include Esri, U.S. Census, Bureau of Labor Statistics, Bureau of Economic Analysis, and CoStar, as well as City of St. Louis tax revenues and expenditures from the Consolidated Annual Financial Reports and assessor data.
Conclusion
The data in the report makes clear that Downtown is critical to the economic success of the City and the region. Continued investment Downtown is not only important, but necessary to the health of the entire St. Louis metro. Failing to strengthen the Downtown neighborhood through enhancements to public safety infrastructure will resonate throughout the region.