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Centene HQ proposal undergoes major design theme
(by Mitch Schneider - June 04, 2008)
The long-discussed, new-headquarters project for Centene Corp. continues to evolve as the company has announced it intends to swap the position of the two office buildings within the project.
The area that Centene has in mind for the project is in the city block in Clayton bordered by Forsyth Boulevard to the north, Carondelet Avenue to the south, Hanley Road to the east and Bemiston Avenue to the west. The firm currently has office space on Carondelet, as well as in the former Library Limited building at the corner of Forsyth and Hanley. Its holdings also include the parking garage behind the Library Limited building. According to Roark Frankel, senior vice president with U.S. Equities, a Chicago-based firm that is co-developing the project, that garage is structurally unstable and is not used.
Under the revised plan, the Library Limited building would be demolished in phase one of the project to make way for a 22-story office tower. Under the plan discussed two weeks ago, the parking garage was to be demolished first to make way for the equivalent building, while the Library Limited building continued to be used as temporary office space.
Centene’s current proposal, like the previous one, is a two-phase project with a second phase starting at an unspecified date in the future, dependent on market conditions. In the second phase, a similar-looking but much shorter office building would be built next to the first one on Hanley.
Clayton Mayor Linda Goldstein said the project is about revitalizing the corner of Hanley and Forsyth — the corner of Main and Main, as the city’s politicians are fond of calling it — and by placing the larger of the two buildings at this corner ensures the development will be “a premier project.”
The employees who work in the converted Library Limited building will be relocated to other locations during construction. At a public meeting two weeks ago, the company said a key advantage of having a two-phase project and keeping the Library Limited building standing was that it would minimize the need to displace workers to satellite offices.
The amended plan will increase Centene’s costs, but the fact that the company even considered a redesign “shows that Centene is committed to making it a win-win situation for everyone,” Goldstein said.Groups within the Clayton community have been digesting claims about the project’s impact on the area, working out how the project would affect local taxes.
At the May 27 meeting, Steve Singer, a member of the Clayton School District Board of Education, read a prepared statement on behalf of the school district expressing its support for the project.
The project’s size means that it will generate extra tax revenue, even during the abatement period, Singer said. “In 2005, the city ... included a provision in the original redevelopment agreement that required Centene to agree to not protest its assessed value during the period of the tax abatement. The city has assured the board that the new redevelopment agreement will also include such a provision,” Singer said.
In addition to discussion of the changes to the plan, the recent meeting also included an overview of some of the financial incentives Centene is seeking. Among those incentives are $19.1 million in tax credits through the state’s Quality Jobs program and a sales-tax exemption on personal property; $8 million in Missouri Build tax credits; and 50 percent tax abatement on real-estate property taxes generated from certain properties within the project.
“The project will not happen without incentives. We have obligations to our shareholders, and have a fiduciary responsibility to look at where we place our headquarters,” said Jim Mello, an attorney representing Centene.
Mello said that the rules governing tax abatement allow for local governments to provide the abatement to firms who are relocating or maintaining their headquarters facility in that municipality, and he said that Centene’s headquarters thus qualifies for the abatement. He said that even though the abatement can be in place for up to 20 years, Centene’s projections indicate that there will be enough revenue generated by the project to end the abatement after 16 years.
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