Local business coverage

J O I N U S O N L I N E S T L T O D A Y. C O M / B U S I N E S S

SUNDAY • 04.02.2017 • E

PEABODY SOLVENT AGAIN Slimmed-down coal miner ready to exit bankruptcy in less than a year

DAVID NICKLAUS St. Louis Post-Dispatch

Peabody Energy didn’t want its bankruptcy case to celebrate a birthday.

The St. Louis coal mining giant said last

April 13, when it made the Chapter 11 filing, that it expected to complete its reorganization in less than a year. It plans to make good on that vow Monday and its stock should resume trading Tuesday under its old ticker symbol, BTU. That stands for British thermal unit, a measurement of a fuel’s heat content.

See NICKLAUS • Page E3

Peabody CEO Glenn Kellow

“The strength of our business is our people along with the quality and diversity of our products and our locations.”

MINORITY REPORT St. Louis struggles to attract immigrants — and Trump complicates the effort POPULATION CHANGES, 2010-2016 Population change Births vs. deaths

Domestic migration* As a percentage of 2010 metro Immigrants area population

ST. LOUIS METROPOLITAN AREA POPULATION

ST. LOUIS AREA NET MIGRATION

2006-2016

2006-2016

3 million

130,000

St. Louis

U.S.

Kansas City

Foreign born population

110,000

2.8M

4 pct.

Net new immigrants

Chicago

90,000 2.6M 70,000

2 2.4M

50,000

0 -2

2.2M

30,000 NOTE: In the years leading up to 2010, the Census Bureau used a forumla that reported inflated population in the St. Louis metro area.

10,000

-4

2M 2006

2008

2010

2012

2014

0 2006

2016

2008

2010

2012

2014

2016

* U.S. domestic migration is an average of large metro areas | SOURCES: U.S. Census, East-West Gateway Council of Governments | Post-Dispatch

BY JACOB BARKER St. Louis Post-Dispatch

PHOTO BY SID HASTINGS

Staff of the Hispanic Chamber of Commerce of Metropolitan St. Louis, (from left) office manager Alicia Hernandez, program manager Vanessa Garcia, business counselor Gabriela Ramirez-Arellano, membership manager Carlos Restrepo and president Karlos Ramirez, gather for a meeting at Mi Lindo Michoacan restaurant in the Bevo Mill neighborhood of St. Louis on Wednesday.

After looking at some new census numbers last year, the Hispanic Chamber of Commerce of St. Louis added two new employees, almost doubling its staff to five people. One of those new workers is solely devoted to growing membership.

“We learned there’s 3,000 Hispanic-owned businesses, and we don’t even have 10 percent of that (as members),” said Hispanic Chamber President and CEO Karlos Ramirez, who has headed the organization for six years. “When I started, it was me and a secretary.”

Strengthening business and social networks among ethnic minorities is what demographers and immigration experts say ultimately attracts new immigrants. When people put down roots and feel part of a community, family members and others with a similar ethnic makeup tend to follow.

The entry points of the country — cities such as New York, Los Angeles and Miami — are still taking in the bulk of new immigrants, but their offspring are increasingly looking beyond those cities.

See IMMIGRATION • Page E4

SSM makes good on first promise Mercy makes major SLU Hospital’s first major project in 31 years opens Tuesday

moves toward expansion

BY SAMANTHA LISS St. Louis Post-Dispatch

BY SAMANTHA LISS St. Louis Post-Dispatch

On Tuesday, St. Louis University Hospital will open a new $12 million building on campus, the hospital’s first major capital project in 31 years.

For SLU, the building also represents the beginning of major renovations at the campus that will soon include replacing the current hospital, a project slated to start this fall.

The 9,000-square-foot building, which will be used for radiation oncology, also alleviates the long-simmering frustrations

Over the last year, Mercy has significantly enlarged its footprint in the St. Louis area, adding more than 2 million square feet of health care space either through acquisitions or planned construction.

“We have been slowly and quietly growing market share and growing nicely over the last couple of years,” said Donn Sorensen, a regional president with Chesterfield-based Mercy.

Most recently, Mercy announced a major expansion at its

See HOSPITAL • Page E3

SSM provided a photo of a portion of the new $12 million Center for Radiation Medicine on the campus of St. Louis University Hospital.

See MERCY • Page E3

MERCY ADDITIONS Aug. 2016 Chesterfield clinic and urgent care opens Aug. 2016 Hazelwood clinic opens Sept. 2016 Butler Hill clinic opens, includes women’s health providers Sept. 2016 Seeks approval to build Florissant clinic Nov. 2016 Warrenton clinic opens Feb. 2017 Announces master plan changes, ER expansion Feb. 2017 Announces intent to acquire St. Anthony’s Feb. 2017 Seeks approval for Creve Coeur surgery center

BUSINESS

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BUSINESS

04.02.2017 • Sunday • M 1

ST. LOUIS POST-DISPATCH • E3

MOUND CITY MONEY tax payments.

• PayKey of Tel Aviv, Israel, a peer-topeer money transfer system that can be integrated into banks’ mobile applications.

SixThirty was founded in 2013 and named for the height of the Gateway Arch. It is based in the T-Rex incubator downtown. (03.28)

From David Nicklaus’ blog about St. Louis business. STLtoday.com/moundcitymoney Professor’s vaccine startup lands $500,000 from Japanese firm • A Japanese biotechnology company has invested $500,000 in Precision Virologics, a St. Louis firm developing vaccines for diseases such as Zika and chikungunya.

Precision Virologics was founded by David Curiel, a Washington University professor of radiation oncology and cancer biology. It has licensed the vaccine technology from the university.

Precision says its Zika vaccine is biologically targeted to achieve a higher level of immunity than vaccines that are currently available.

The investment is from Tokyo-based Oncolys BioPharma.

In a regulatory filing, the Tokyo-based company says it will have a 14 percent voting stake in Precision Virologics. The filing says Curiel owns 64 percent, and Chief Executive Daniel Katzman owns 24.7 percent. (03.29)

Ag-tech company Benson Hill raises $25 million • Benson Hill Biosystems, a crop technology company with offices in Creve Coeur and North Carolina, has raised $25 million in venture capital.

The company’s series B round was led

by Lewis & Clark Ventures, a Clayton firm that launched a $20 million fund last year for agricultural investments, and Prelude Ventures of San Francisco.

Fall Line Capital of San Mateo, Calif., and S2G Ventures of Chicago also made firsttime investments in Benson Hill. Several previous investors also participated, including Cultivation Capital and iSelect Fund of St. Louis, Prolog Ventures of Clayton and the state-funded Missouri Technology Corp.

Benson Hill, founded in 2012, raised a $7.3 million Series A round in 2015. It said the new money would be used to enhance CropOS, its computational “cloud biology” platform, which helps seed companies improve crop genetics for a fraction of the time and cost of conventional methods.

David Russell, a Lewis & Clark partner, said in a statement that Benson Hill “delivers not just better products but also a whole new approach to genomic innovation that stands to greatly benefit the world’s agricultural food supply.” (03.28)

Missouri and Illinois remain laggards in income growth • A turnaround in farmers’ fortunes wasn’t enough to boost income growth above the national average last year in Missouri and Illinois.

The Commerce Department reported Tuesday that personal income grew 3.5 percent last year in Missouri and 3.1 percent in Illinois. The national growth rate was 3.6 percent.

Missouri’s personal income growth has now trailed the nation for seven straight years. Illinois has been a laggard for six of the seven years since the 2008-09 recession.

In 2015, both states were hurt by a slump in agriculture. Last year, though, farmers’ earnings grew by 48 percent in Missouri and 267 percent in Illinois.

The health care and social assistance sector was Missouri’s biggest contributor to earnings growth. In Illinois, the biggest contribution came from professional, scientific and technical services earnings.

Missourians’ personal income came to $43,723 last year, or 88 percent of the national average. The per capita figure for Illinois was $52,098, which is 105 percent of the national average.

Wyoming was the only state where personal income shrank last year, by 1.7 percent. Nevada had the fastest growth at 5.9 percent. (03.28)

Arch Coal CEO gets $10.2 million stock award • For Arch Coal Chief Executive John Eaves, bankruptcy giveth and bankruptcy taketh away.

Arch’s proxy statement, filed Wednesday, contains the first full disclosure of executive compensation since the coal miner emerged from bankruptcy in October.

Eaves received stock Eaves valued at $10.2 million for leading the company through Chapter 11, and those grants made up more than threequarters of his nearly $13 million in 2016 compensation.

Arch executives forfeited some other forms of pay during the bankruptcy, though.

Eaves had to forgo $1.7 million of retention payments that were promised in a 2015 agreement. Long-term incentives for him and other officers were reduced by 70 percent, and annual bonuses were reduced by $6 million companywide.

In addition to the stock, Eaves received $1.3 million in salary, $192,188 in retention bonus and $1.3 million in incentive bonuses.

Of the latter amount, $460,354 was for 2016 performance, and $841,819 is a performance award that depends on safety and environmental compliance over a threeyear period.

Of the $10.2 million in stock, Eaves can claim $4.48 million simply by staying at Arch for three years. The remaining $5.76 million depends on what happens to Arch’s share price. It must top $125 within three years for him to receive the full amount, and he could get nothing if it stays below $65.

Eaves’ compensation also included $189,651 of increased pension value and a couple of perquisites: $13,633 worth of financial planning services and $10,680 in club dues. (03.24)

Spanish and Israeli firms join SixThirty accelerator class • SixThirty, a four-year-old financial technology accelerator based in St. Louis, says this spring’s selection process was the most competitive and the most international yet.

SixThirty received 170 applications, with half from outside the United States. It chose two foreign and three domestic firms for its spring class. Founders of the five will come to St. Louis for 14 weeks of training, mentoring and networking, and SixThirty will invest up to $100,000 in each company.

The new portfolio companies are: • Bridge Financial Technology of Chicago, which provides back-office automation software to financial advisers.

• CFX Markets, also of Chicago, which runs a secondary market for private real estate investment trusts.

• Cognicor of Barcelona, Spain, developer of artificial-intelligence software that interacts with customers by voice or text message.

• Painless 1099 of Buffalo, N.Y., which helps independent contractors set aside money for

J.B. FORBES • jforbes@post-dispatch.com

St. Louis-based Peabody filed for Chapter 11 bankruptcy protection on April 13, 2016. Shown here are Peabody operations in Campbell County, Wyo. Peabody used bankruptcy to shed $5.2 billion in debt while raising $1.5 billion of new equity. Its equity now covers 150 percent of its debt.

Paying down debt is priority NICKLAUS • FROM E1

Coal isn’t as dominant in the world’s fuel mix as it was in 2001, when Peabody first listed its stock as BTU, but its future looks brighter than it did a year ago. Prices are up, and President Donald Trump is reviewing rules that would have hastened the shutdown of coalburning power plants.

Peabody has made itself more attractive, too. It used bankruptcy to shed $5.2 billion in debt while raising $1.5 billion of new equity. The result, Chief Executive Glenn Kellow says, is “a capital structure designed to weather what we still see as a cyclical commodity industry.”

In the old Peabody, shareholders’ equity was enough to cover just one-eighth of the debt. Now it covers 150 percent.

This year’s financial priority, Kellow said in a phone interview, is to pay down debt. In 2018, Peabody will be allowed to pay a dividend. “In this space, shareholders are very focused on cash returns, and that’s something we’re cognizant of,” Kellow said.

Investors seem ready to welcome the world’s largest private-sector coal miner back from bankruptcy. Peabody’s recent $1 billion bond offering was oversubscribed, and a report from Clarkson Pitou Securities of New York puts a “buy” rating on the new BTU shares.

In the report, analyst Jeremy Sussman praises Peabody’s “combination of size, likely trading liquidity, a strong balance sheet and geographical diversity” and writes that the company should trade at a premium to other mining companies.

Peabody’s timing may not be as fortuitous as that of crosstown rival Arch Coal, which emerged from bankruptcy last October and saw its shares rise 35 percent within a month.

Arch benefited from a rally in coal prices last summer and fall, and then

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Before (2015)

After (2016)

$5.6 million

$4.7 billion

$7.2 billion

$1.97 billion

Shareholder $870 million equity

$3.1 billion

Revenue Debt

Source: Peabody filings

from enthusiasm over Trump’s election.

Its shares have retreated as coal prices have leveled off, but remain 9 percent above where they started in October.

Coal companies don’t have great growth prospects, according to Morningstar utility analyst Charles Fishman, but they should at least have a future.

“It’s going to be a tough business, but it’s not going away,” he said.

Kellow maintains that Peabody has the best assets in that business. It operates seven mines in Illinois and Indiana, seven in the western U.S. and nine in Australia, although one Australian mine is for sale.

The Australian assets had been considered troubled because of falling demand from China, and Peabody’s descent into bankruptcy can be blamed on a poorly timed $5.2 billion Australian acquisition in 2011.

Kellow, though, says the Australian assets are worth keeping. He says Thailand, Vietnam and South Korea are importing more utility-grade thermal coal, and India will become the largest importer of metallurgical coal, used in making steel.

“The strength of our business is our people,” Kellow said, “along with the quality and diversity of our products and our locations.”

Speaking of people, Peabody did an unusual thing in its reorganization plan.

It set aside shares not only for top executives, but for all 7,000 employees, including 355 at the downtown headquarters.

You can bet they’ll be watching the ticker closely on Tuesday.

David Nicklaus • 314-340-8213 @dnickbiz on Twitter dnicklaus@post-dispatch.com

SSM makes good on first promise HOSPITAL • FROM E1

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PEABODY NOW AND THEN

of physicians and staff who wanted the hospital’s previous owner, Dallas-based Tenet Healthcare, to make major investments during its 17-year ownership period.

“It has been a nice visible reminder for physicians and staff that it is a new era,” Kate Becker, president of St. Louis University Hospital, said of the new Center for Radiation Medicine.

Creve Coeur-based SSM Health acquired the St. Louis University Hospital in 2015 and quickly announced plans to invest $500 million in the campus.

It will replace the current hospital and build an outpatient center. The Catholic health system recently released renderings of the project.

A portion of the hospital dates back to 1933. The last major construction project at the hospital took place three de-

cades ago, at a time when the university actually owned its namesake hospital.

On Jan. 30, 1988, the university opened the doors to a $39 million addition, situated directly behind the original hospital.

The new Center for Radiation Medicine is also a major improvement for patients, said Dr. John Dombrowski.

“In the current hospital we’re located on the service level, which is basically a fair distance away from where they would park and meander through the hospital and entire building, to get to us,” he said. “This new facility has excellent access, almost a drive-up access for them.”

It also provides more space for patients, such as rooms for changing before treatment.

Samantha Liss • 314-340-8017 @samanthann on Twitter sliss@post-dispatch.com

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Mercy makes moves around region MERCY • FROM E1

main hospital campus in Creve Coeur.

The health system plans to build an outpatient surgery center immediately south of its 70-acre campus near Interstate 270 and Highway 40 (Interstate 64).

To make room for the surgery center, Mercy has bought up nearby medical buildings and already demolished one.

It’s also planning an expansion to its emergency room and hinted at other “significant changes” with upcoming changes to its master plan.

But key to recent expansion plans was the acquisition of St. Anthony’s Medical Center.

St. Anthony’s Medical Center, the third-largest area hospital, has long dominated the market in south St. Louis County and over the years was a prime candidate for takeover by the region’s major health care systems.

The addition of St. Anthony’s, a 693bed facility, will help Mercy close in on SSM Health, which is the second-largest health provider in the area in terms of market share. Mercy is third.

But instead of competing for traditional market share that is measured by how many people are treated at hospitals, Mercy also is trying to focus on out-

patient facilities.

“The future is keeping people out of the hospital and keeping them well,” Sorensen said.

Hospitals are increasingly paid for quality instead of quantity. Or in other words, they are paid by how well they treat patients instead of simply taking care of more patients to make more money, although volume is still an important factor.

To better navigate the transition of payment from quantity to quality, Mercy expansion plans have included the addition of nearly 70,000 square feet of outpatient center space alone.

The largest portion of that additional space will be a clinic in north St. Louis County.

This year, Mercy also began making plans to build a 50,000-square-foot medical office building near Florissant, which also helps round out their presence in many areas of the St. Louis region.

“People don’t want to drive far, and they want to be able to see their provider quickly and efficiently and get back to their lives,” Sorensen said.

Samantha Liss • 314-340-8017 @samanthann on Twitter sliss@post-dispatch.com

BUSINESS

E4 • ST. LOUIS POST-DISPATCH

M 1 • Sunday • 04.02.2017

Networks encourage more immigrants IMMIGRATION • FROM E1

“That’s been spreading out over time, and it depends on social networks and family networks and recruitment policies on the part of businesses and local communities,” said William Frey, a demographer at the Brookings Institution.

For the last several years, St. Louis business and political leaders have looked to immigration as a salve for the region’s stagnant population and economic growth. After a 2012 report citing the region’s low attraction to immigrants compared to other cities, they launched the Mosaic Project to help integrate immigrants and ethnic minorities into the region’s economy. They’ve touted the work of the International Institute of St. Louis, which resettles refugees and offers English classes and other services to new residents.

But with what many view as anti-immigrant rhetoric coming out of President Donald Trump’s administration — through cuts in the number of refugees admitted to the U.S. and talk of curbing both the number of immigrants and those admitted through a visa program for highskilled workers — the region’s task just got harder.

“Cities like St. Louis then are competing for a smaller pool of newcomers,” said Anna Crosslin, International Institute president and CEO. “Immigrants are not the answer to a community’s economic woes, but they are a very important part of a plan to turn around communities.”

PHOTO BY SID HASTINGS

Staff of the Hispanic Chamber of Commerce of Metropolitan St. Louis, including program manager Vanessa Garcia (left), business counselor Gabriela Ramirez-Arellano and membership manager Carlos Restrepo, discuss business during lunch.

SLOW-GROWTH BLUES Attracting more immigrants is a strategy many Rust Belt cities have emphasized to try and prop up population and economic growth that lags the coasts and Sun Belt metro areas.

“In order to grow, to get the kind of (gross domestic product) growth that we need as a country and as a region, we need more people,” St. Louis Regional Chamber President Joe Reagan said after a recent conference in St. Louis with New American Economy, a coalition of mayors and business leaders that touts the economic benefits of immigrants. “We need everybody. We cannot afford to close the door and turn our back on any individual.”

If the last U.S. Census estimates are any indication, immigration keeps the St. Louis metro from dipping into population losses most years. Yet the numbers still lag well behind most metro areas.

The St. Louis region was estimated to have lost about 1,500 people in 2016, according to census figures released last month. Since 2010, the area grew only about 0.6 percent, well below the national average and above only six other big cities including Chicago, Detroit and Cleveland.

And at 1.3 percent, the St. Louis region’s 2015 GDP growth was only about half of that in other U.S. metro areas.

There’s little to suggest the population growth here will change from current trends, said Charles Gascon, an economist at the St. Louis Federal Reserve Bank. It’s not all bad, he points out. True, population growth means economic growth and perhaps political power. But it can also mean congestion, pollution, spikes in the cost of living and greater inequality.

“It’s not necessarily the case that by pushing people in, you solve those problems,” Gascon said. “In some cases you can make them worse.”

Natives who leave the area are the biggest weight on the region’s lackluster population growth, a trend occurring across the Midwest as people move south and west.

“That would be way in the net negative if it weren’t for the steady stream of people coming from other countries,” said John Posey, director of research at the EastWest Gateway Council of Governments, the region’s planning arm.

Frey, the Brookings demographer, points out that New York consistently records among the highest percent of natives leaving, but immigrants offset that population loss and keep the nation’s largest city growing.

St. Louis has some work to do if it wants immigrants to help it grow at more than a tepid pace over the coming decades. The number of net new immigrants to the region has ticked up to above 4,100 for the last three years in a row, pushing the average number of immigrants to about 3,600 since 2010. That’s an increase from the average of 3,100 in the last decade.

But the region still ranks far below al-

CRISTINA M. FLETES • cfletes@post-dispatch.com

Ilily Haydary (left), 8, of Afghanistan, laughs with volunteer Jake Sher, 16, of Clayton, at the International Institute in 2016.

most all big metros in the percent of immigrants that make up the region’s 2.8 million people. With about 125,000 foreign-born residents, only 4.5 percent of area residents are immigrants, ranking St. Louis 249th in the country, according to the Migration Policy Institute, a nonpartisan think tank.

“Part of the challenge is that the base off of which we are building is small,” the International Institute’s Crosslin said.

Visas are limited, and national immigration policies form the bounds of how many immigrants local leaders can attract, Gascon said. But local initiatives like St. Louis is emphasizing can eventually bear fruit. “It takes time and effort, but it is something, with targeted efforts, you can see how that works,” he said.

GIVE ME YOUR STUDENTS The uptick in immigrants here in recent years appears to be correlated with an increase in international students. About 44 percent of the foreign-born in St. Louis have college degrees, higher than both the 31 percent of native St. Louisans and 30 percent of immigrants across the country with college degrees, said Migration Policy Institute President Michael Fix. “The immigrants flowing into many of these Rust Belt cities like St. Louis have strong human capital profiles,” he said.

“The factories have left, but the great universities remain.”

Younger immigrants may be attending universities in the region, but getting them to stay and start or join businesses is another matter.

“It’s not impossible, but there’s only so many routes you can take within the system to do that,” Gascon said.

Retaining more international students studying science and technology has been the focus of several reports cited by the Mosaic Project, which is housed in the St. Louis Economic Development Partnership. Area employers cite a shortage of high-skilled workers as the main obstacle to business expansion, according to a

ASSOCIATED PRESS

President Donald Trump prepares to sign an executive order for curbs on immigration on Jan. 25.

report from the Office of International Studies and Programs at the University of Missouri-St. Louis.

The rhetoric many see as anti-immigrant embroiling national politics may already be having an effect, Crosslin worries. Fix said he recently heard a corporate leader say university applications are taking a hit.

“The flow of high-skilled immigrants is slowing a little bit,” Fix said. “People are reluctant to come, particularly from India and China.”

‘IT CAN HAPPEN AGAIN’ While President Trump’s executive order barring travel from certain countries is tied up in the courts, his reduction in the number of refugees the country can resettle to 50,000 is already having an impact.

It cut in half the number allowed the prior year, when St. Louis resettled about 1,100 refugees, many of them Syrians.

The country is already about to hit the new cap, Crosslin said, so St. Louis will likely only get about 550 refugees this year.

The number of refugees the region gets is small but significant. St. Louis often points to the influx of Bosnian refugees that helped repopulate some southside neighborhoods.

Only about 8,000 or 9,000 of those were settled here as refugees, but their relatives and fellow expats decided to come here from other U.S. cities due to the network some built here. Now, there’s an estimated 50,000 Bosnians in the region, many of them children of the original refugees.

“It can happen again,” Crosslin said.

St. Louis is a big city because of immigrants, she said, pointing to the German, Irish and Italian immigrants who made their way to the middle of the country by way of the Mississippi River during the early to mid-19th century.

That slowed to a trickle after Chicago became the great rail hub in the center of the country. And migration patterns among lower-skilled Latin American im-

migrants largely bypassed St. Louis during those immigration waves in the 1980s and ’90s. Chicago, again, has gained the network that attracts those Latin American immigrants who leave the South and West for the Midwest.

But Ramirez, at the local Hispanic Chamber, is working to build St. Louis’ Hispanic business network. St. Louis’ Hispanic community is small and dispersed compared to other big cities, but Mexicans still made up the largest single group of foreign-born residents here: almost 15,400, according to St. Louis University professor J.S. Onésimo Sandoval’s analysis of census figures.

Most of the estimated 90,000 Hispanic residents of the St. Louis region are now the descendants of immigrants. And the Hispanic Chamber projects that population to almost double over the next 15 years.

It’s already doubled membership in the last five years, and Ramirez said big local corporate employers have become members, hoping to support area workforce growth or recruit to meet diversity initiatives. A year ago, Ramirez himself became the chairman of the St. Louis Economic Development Partnership, the region’s primary business attraction and growth agency.

He thinks St. Louis and Missouri appear to be trying to be more welcoming to Hispanics, which he said is the best thing it can do if it wants to add immigrants and diversity.

“Given the Hispanic Chamber’s growth, the support for (immigrant health care provider) Casa de Salud … and less legislation in Jefferson City that is anti-immigrant, all of that would indicate to me that we’re definitely on an upward trend,” Ramirez said. “But all of that could easily change.”

Walker Moskop of the Post-Dispatch contributed to this report.

Jacob Barker • 314-340-8291 @jacobbarker on Twitter jbarker@post-dispatch.com

Uptick in animal-related insurance claims Blame the trend mostly on bedbugs — plus peacocks and a flying squirrel

BY SUZANNE BARLYN Reuters

Bedbugs in hotel rooms and aggressive peacocks are some of the creatures behind an uptick in animal-related insurance claims filed by U.S. businesses, according to a study published on Thursday by insurer Allianz SE. U.S. claims involving bedbugs increased 50 percent between 2014 and 2015, from 66 to 99, according to Allianz. The insurer has already counted 70 bedbug claims through September 2016, heading for a total that could surpass the previous year’s, said Larry Crotser, the chief claims

officer for the insurer’s Allianz Global Corporate & Specialty unit.

The findings were included in a global report by the Allianz unit, which analyzed more than 100,000 corporate liability claims from roughly 100 countries paid by Allianz and other insurers between 2011 and 2016, totaling $9.3 billion. The claims involved everything from aviation to cybersecurity.

The analysis included nearly 1,880 U.S. animal-related business liability claims, representing about 2 percent of all commercial claims in the study.

Animal claims increased 28

ASSOCIATED PRESS

Bedbugs accounted for 21 percent of U.S. business liability claims involving animals.

percent between 2011 and 2015, from 287 to 365, according to Allianz. The average animal-related liability claim is about $10,400, with all animal claims totaling nearly $20 million.

Bedbugs accounted for 21 percent of U.S. business liability claims involving animals. Some claims, however, were peculiar, such as a hotel guest whose room was invaded by a flying squirrel and another whose hearing aid and slippers were destroyed by a rodent. Two claims involved people who were attacked by aggressive peacocks, according to the study.

Bedbugs, found on every continent except Antarctica, have been biting people for thousands of years. Widespread insecticide use in homes after World War II eliminated them from many regions, but bedbugs developed pesticide resistance and rebounded, thriving in heated homes and hitching rides in luggage during international travel.

Hotel companies typically file insurance claims to cover costs of reimbursing guests who encountered bedbugs during their stays and inadvertently brought the insects home in their suitcases, causing infestations, Crotser said.

Those guests then look to the hotel company to pay for fumigating their homes. Commercial bedbug claims averaged $5,660, an Allianz spokeswoman said.

Deer incidents, such as collisions with farm vehicles, were the most common involving animals, accounting for 58 percent of U.S. animal-related liability claims insurers received.

Other business claims involved damage from dogs, roaming cattle, horses, cats, rodents, snakes and sheep.

J O I N U S O N L I N E S T L T O D A Y. C O M / B U S I N E S S

SUNDAY • 04.09.2017 • D

PAYDAY LOANS LIMPING It’s unclear whether regulation or competition is taking bigger bite out of high-cost borrowing

NUMBER OF LENDERS* BY YEAR IN MISSOURI Payday lenders

Consumer installment lenders

1,400 Number of lenders 1,200

BY WALKER MOSKOP St. Louis Post-Dispatch

1,000 800 600 400 200 0

2005

2007

2009

2011

2013

2015

2017

SOURCE: Missouri Division of Finance. *Some lenders carry payday and installment licenses, so they're counted in both categories. Annual gures are end-of-year, except for 2017, which is as of March 27.

In Missouri, home of some of the most relaxed consumer lending laws in the nation, the payday loan industry has been shrinking for years.

After the Legislature changed the state’s usury laws to allow high-interest, short term loans

in the 1990s, storefronts began popping up across the state. By 2005, there were 1,335 licensed lenders operating.

Today, there are 653. The 1.62 million loans taken out last year, according to a recent state survey, was a little more than half of what it was 10 years before.

Part of that decline is simply a shift to different types of loans.

Brothers bet on big return from farm-raised shrimp They see opportunity in trend toward locally sourced seafood

Many payday lenders haven’t closed — they now focus on installment loans. Rather than a two-week, lump-sum payment period (which may be rolled over as many as six times), installment loans are paid back in chunks over four or more months, but can still carry tripleSee LOAN • Page D4

Why is Panera worth $7.5 billion?

Bakery cafe chain’s shares are up 9,000 percent since 1999 DAVID NICKLAUS St. Louis Post-Dispatch

In the early weeks of this century, you could buy a share of Panera Bread for about the price of a meal at its restaurants.

Seventeen years later, with the fast-casual chain about to be bought by JAB Holding for $7.5 billion, one share will set you back at least a month’s worth of chipotle chicken avocado melts.

The shares have risen almost 9,000 percent since May 1999, when Panera assumed its current corporate form and moved its headquarters back to the St. Louis area.

That’s a lot of yeast. The investment returns are a testament to a management team that saw a market for restaurants focused on fresh, healthy ingredients and then invested in technology to let busy customers order from their phones.

Such farsightedness enticed See NICKLAUS • Page D3

PANERA BREAD CO. REVENUE

PHOTOS BY CRISTINA M. FLETES • cfletes@post-dispatch.com

The Howells of Foristell raise Pacific whiteleg shrimp in saltwater pools. The farm made its first sale in February its first shipment completed its roughly three-month growth cycle into jumbo-size specimens as long as a human hand.

BY BRYCE GRAY St. Louis Post-Dispatch

FORISTELL • “I see they’re closed, but I

still gotta ask questions,” said Nick Damaso, after pulling down the gravel driveway marked with the shrimp-emblazoned sign for Triple J Farms, near Foristell. Damaso, a resident of nearby Lake Sherwood, walked to the door, determined to learn more.

His curiosity was justified, since it’s not often one comes across a shrimp farm in Missouri. But here, about 650 miles removed from the nearest ocean saltwater, Triple J Farms is making its move into inland shrimp aquaculture.

In place of the sea, the operation has crammed eight round pools plus an additional water storage tank into a modestly sized indoor facility — enough to stock up to 28,000 Pacific whiteleg shrimp. In November, the farm welcomed its first delivery of post-larval shrimp and made its first sale in February when that shipment

See SHRIMP • Page D4

$2,800 in millions 2,600 2,400 2,200 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 2000 2004

2008

2012

SOURCE: Thomson Reuters

PANERA BREAD CO. NET INCOME $200 in millions millio ons 180 160 140 120 100 80 60 40

Brothers James (left) and Jeff Howell laugh with their dad, Dave, as they sit at the front counter of Triple J Farms in Foristell last week. The three own the farm along with Jeff and James’ brother Jason Howell, not pictured.

> To learn more about Missouri aquaculture and see life on a shrimp farm, go to stltoday.com/watch

20 0 -20

2000

2004

2008

2012

SOURCE: Thomson Reuters

BUSINESS

Michelle Miller Associate Broker 314-994-4944 mmiller@naidesco.com

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04.09.2017 • Sunday • M 1

ST. LOUIS POST-DISPATCH • D3

Panera got ahead of tech, healthy food trends JAB, the Luxembourg-based parent of Krispy Kreme Doughnuts and Einstein Bagels, to pay a premium for Panera. The price amounts to 40 times this year’s expected earnings.

“They are playing in the sweet spot in terms of trends and where the world is headed,” says Scott Harrison, an analyst at Argent Capital Management in Clayton. “They have a strong brand and have been a leader in technology and healthy eating, so that’s what made them so attractive.”

Panera wasn’t always an industry darling. The low-carb craze of the early 2000s was hard on a place with bread in its name, and a flatbread pizza was a costly flop.

Lately, though, Panera’s trendspotters have been ahead of the competition. It was the first national chain to post nutritional information for all menu items. It banned trans fats in 2007, and removed all artificial

LAURIE SKRIVAN • lskrivan@post-dispatch.com

Cartez Whitehorn fills orders this month during the lunch rush at the St. Louis Bread Co. in Des Peres . JAB is buying Panera for $7.5 billion.

food additives over the last two years.

Panera notched another industry first last month, posting information about soft drinks’

year, while competitors’ numbers were flat or down.

Digital sales now account for nearly a quarter of transactions at the company-owned locations. “Earnings were impacted for close to three years, but these were investments in the future, and they did pay off,” says Lynne Collier, an analyst at Canaccord Genuity.

Times are tough for the broader restaurant industry, Collier notes. Some chains have overbuilt, food-price inflation is causing customers to rethink dining habits and meal-kit startups such as Blue Apron represent new competition.

Amid those challenges, JAB must rationalize its top-dollar price by knowing it’s buying a technology operation, not just a food company. With Chief Executive Ron Shaich agreeing to stay on, the new owners stand a good chance of getting ahead of the next big trend, too.

“They’ve done a really good job with awareness, advertising that their foods are preservative-free, antibiotic-free and so on,” says Jack Russo, an analyst at Edward Jones. “Then, about three years ago, they decided technology needed to play a bigger role in the business.”

He’s talking about Panera 2.0, an initiative that includes mobile ordering, in-store kiosks and, as of this year, delivery. Building new systems and redesigning restaurants wasn’t cheap: The changes cost roughly $125,000 for each of Panera’s 2,000 cafes, about half of which are franchised.

The investment depressed profits for 2015 and 2016, and some investors became impatient. A couple of times, disappointing quarterly results caused the stock to tumble 10 percent in a single day.

Recently, the payoff became apparent. One key number: First-quarter sales rose 5.3 percent at company-owned cafes that have been open at least a

NICKLAUS • FROM D1

calories and added sugar. Even for customers who don’t read the fine print, such moves create a perception that the restaurant cares about their health.

David Nicklaus • 314-340-8213 @dnickbiz on Twitter dnicklaus@post-dispatch.com

MOUND CITY MONEY From David Nicklaus’ blog about St. Louis business. STLtoday.com/moundcitymoney Israeli startup joins second St. Louis accelerator • Stadia Ventures, which said previously that it would have four companies in its sports-business accelerator this spring, has added a fifth.

Stadia co-founder Tim Hayden announced Wednesday that Pico.buzz, based in Haifa, Israel, would join the accelerator’s spring class.

Pico.buzz helps sports teams and music venues communicate with fans via social media and gather data on those interactions.

The firm moved its U.S. office to St. Louis this year when it was selected for the Capital Innovators accelerator, which like Stadia is in the Cambridge Innovation Center at 4240 Duncan Avenue.

Matt Fineberg, head of the U.S. market for Pico.buzz, said the company has worked with the Blues hockey team, St. Louis Mardi Gras and some music festivals since moving to St. Louis. For Mardi Gras, it assembled an album of photos posted on Instagram and helped organizers communicate with the people who posted content.

For the Blues, Pico.buzz has created a fan-generated Facebook album and a poll

in which fans try to predict which player will score a game’s first goal. Fans post 500 percent more content when they know the team is paying attention, Fineberg said.

Teams can use the same technology to reward fans for their content with a coupon for the concession stands, Fineberg said.

Stadia’s accelerator program consists of 12 weeks of mentoring and business development, and Stadia invests in each company it selects.

Pico.buzz is one of at least seven Israeli startups with a presence in St. Louis. The others include four agriculture-related firms, a technology company that’s partnering with Ameren and a mobile money-transfer firm that’s participating in the SixThirty accelerator. (04.06) St. Louis unemployment hits 16-year low of 4.1 percent • The metro St. Louis unemployment rate fell to 4.1 percent in February, the lowest in more than 16 years.

The rate, as seasonally adjusted by the St. Louis Federal Reserve Bank, had been at 4.3 percent in December and January. It hasn’t been this low since November 2000, when it was 4.0 percent.

The national jobless rate was 4.7 percent in February. St. Louis’ rate has been below

St. Louis Post-Dispatch presents

software watches sports like a human, using computer vision and artificial intelligence to identify highlights.

• Team RC21X, of Pittsburgh, which uses gamelike assessment tools to monitor an athlete’s brain health and performance.

• Vntana, of Los Angeles, an augmented reality company that helps brands provide realistic holographic experiences. (04.04)

the U.S. one for five straight months.

St. Louis area unemployment peaked at 10.4 percent in late 2009 and has dropped steadily since then. In recent decades, the rate’s low point was 3.2 percent in January 2000.

The Bureau of Labor Statistics counted 67,078 metro area residents as unemployed in February, a drop of 210 since February 2016. The metro area’s labor force grew by 8,626 people, or 0.5 percent, over the same 12 months.

The unemployment and labor-force numbers come from a survey of households.

Using a separate survey of employers, the BLS said metro St. Louis added 10,400 jobs in February. That’s the biggest monthly number since at least 1990, and it may be revised downward. (04.05)

No bonus for Build-A-Bear CEO in 2016 • Build-a-Bear Workshop Chief Executive Sharon John went without a bonus last year for the first time since she joined the company in 2013. A more generous stock options grant, however, boosted her total pay 8 percent last year to $1.99 million.

John’s salary rose 4 percent to $694,231, BuildA-Bear reports in a proxy John statement filed Friday, but the company missed its profit targets and didn’t pay executive bonuses. Build-A-Bear says it suffered “a sudden decline in retail traffic” in December and its per-share profit fell 94 percent for the year.

Despite the profit slump, Build-A-Bear’s stock price rose 11 percent last year.

John’s compensation included $625,003 in stock and $663,492 worth of options.

Another stock grant, tentatively valued at $1.16 million, was not included in the 2016 tally. It won’t vest until 2019, and the final number of shares depends on Build-A-Bear’s hitting revenue targets for 2016, 2017 and 2018.

John’s golden parachute — her payments if she leaves Build-A-Bear after a takeover — is worth $5.7 million. Of that amount, $2.1 million is salary and bonus and $3.6 million is for unvested stock. (03.31)

Stadia unveils latest choices for sportsbusiness accelerator • Stadia Ventures is investing in augmented reality, machine vision and neuroscience with its accelerator program’s latest class of four sports startups.

Three of the companies, which will be introduced at an event Wednesday, come from Southern California and one is from Pittsburgh. Their founders will spend part of the next 12 weeks in St. Louis for mentoring and business development, and Stadia will invest up to $100,000 in each firm.

Stadia was founded in 2015 by Art Chou, a former Rawlings Sporting Goods executive, and Tim Hayden, director of St. Louis University’s Center for Entrepreneurship. Its accelerator has now invested in 18 sportsrelated companies.

The newest additions to the portfolio are: • Kadho Sports of Irvine, Calif., which creates neuroscience-based training tools for athletes.

• Reely of Santa Monica, Calif., which says its

FRIDAY, JUNE 16

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BUSINESS

M 1 • Sunday • 04.09.2017

Shrimp farming uses less energy per pound SHRIMP • FROM D1

completed its roughly threemonth growth cycle into jumbosize specimens as long as a human hand.

The novelty of the business might raise some eyebrows and attract visitors such as Damaso for tours, but Jeff and James Howell — the brothers who operate the farm — hope its regional uniqueness can become a selling point. So far, the farm has served customers only over the counter at its Foristell facility, but the Howells are aiming to attract business from restaurants looking to buy locally produced and responsibly raised seafood.

“We’d love to partner with a restaurant,” Jeff Howell said.

“There’s nobody yet (in St. Louis) with farm-to-table seafood.”

Triple J sees an opportunity to step into that void.

“A lot of people today, they don’t know where their main protein comes from,” James Howell said. That’s especially true, the brothers say, for seafood in the U.S., more than 90 percent of which is imported.

Shrimp, like many kinds of seafood, is prone to overfishing.

But the majority of the world’s supply is farmed — not caught — with Asian countries such as China, Thailand and Vietnam dominating production. Shrimp aquaculture in Asia is its own cause of environmental concern, with shrimp farms’ discharge of effluent representing a significant pollution issue in coastal areas.

The opportunity to provide a locally sourced alternative was compelling enough to draw the Howell brothers away from former jobs in excavation and helping on the family’s farm of row crops near Defiance. The idea originated with their father, Dave Howell, who read about shrimp farms as a market for soybean meal in a Corn and Soybean Digest article several years ago. Triple J doesn’t use soy-based feed, but the story piqued a lasting interest in aquaculture that Dave eventually passed to his sons.

“I just thought it was something different and no one was doing it around here,” said Dave, who co-owns the business along with a third son, Jason. “And I love shrimp.”

Now Jeff and James’ aroundthe-clock attention is commanded by the undertaking, which requires constant management of water temperature, oxygen levels, alkalinity and other variables crucial to shrimp survival. The operation does not discharge any of its water, recycling it through the system and relying on the bacteria that coexist with the shrimp to consume

PHOTOS BY CRISTINA M. FLETES • cfletes@post-dispatch.com

James Howell, a co-owner of Triple J Farms in Foristell, cleans one of the farm’s shrimp tanks last week.

The operation has eight round pools plus an additional water storage tank — enough to stock up to 28,000 Pacific whiteleg shrimp.

the waste and keep the water clean.

Perhaps surprisingly, the Howells aren’t alone as Midwestern shrimp producers. They buy their shrimp larvae from an Indiana facility and are aware of a few other shrimp farms around Missouri. And they point out that the state has had other types of aquaculture take root in unlikely — and creative — places, such as an old Walmart building converted into a tilapia farm in Chillicothe.

In fact, some experts think Triple J could be among the pioneers for a broader trend in re-

gional aquaculture.

“There are a number of farmers in the state that are attempting to do this,” said David Brune, an aquacultural engineer with the University of Missouri who has specialized in saltwater shrimp farming for the past 20 years of his career. “We’re right on the edge of this taking off. I think it’s going to be big once we establish a few successes.”

Though not familiar with the Howells’ new operation, Brune echoed their belief that a robust market can be found for their product, even at a substantially higher price than the cheap, im-

ported shrimp that floods the U.S. “I think everyone understands that there is a huge market for locally grown, environmentally responsible shrimp production,” said Brune, explaining that the 90 percent of seafood imported into the country represents an annual outflow of $12 billion to $14 billion. “The potential is huge, the volume is huge, the price is high.”

He says the environmental benefits of aquaculture extend to energy. On a per unit basis, shrimp and fish production beat other major sources of animal protein.

“Marine shrimp and fish production can be done at about 5 kilowatt-hours of energy per pound of product,” Brune said.

He said that energy footprint is dwarfed by totals for chicken (8 kilowatt-hours), pork (24 kilowatt-hours) and beef (35 kilowatt-hours).

Though the technical challenges of raising them are considerable, Brune says shrimp can offer some of the best bang for their buck in aquaculture, with domestically grown varieties able to fetch up to $20 per pound.

Triple J is currently charging $18 a pound for their largest shrimp, according to their website.

“There just isn’t any other product out there that can grow

so quickly and command such a high price,” Brune says.

That growth rate and abundance is on firsthand display at Triple J Farms, where each tank of 3,500 shrimp yields about 150-200 pounds every three months.

“When you think about the size of facility that this is, that’s a lot of food you’re producing,” Jeff Howell said.

Triple J’s main challenge for now is establishing itself and finding reliable consumers for all that shrimp. And eventually the farm hopes to expand into the business of shrimp breeding.

“We’re either gonna be really smart or really dumb, because we don’t have any competition,” Jeff Howell jokes, assessing Triple J’s outlook.

But Brune thinks others are watching Missouri’s shrimpproducing pioneers closely to see how they fare.

“A lot of farmers like the idea of producing a high-value product like this,” he said. “What I want to happen is these key farmers become successful as quickly as possible. Once they become successful, they become a model for all other farmers.”

Bryce Gray • 314-340-8307 @_BryceGray on Twitter bgray@post-dispatch.com

Missouri’s laws are among nation’s most lax LOAN • FROM D1

digit annual interest. The number of installment lenders (many of which still offer payday loans) more than tripled from 20052013, to 976.

But that growth stalled, and in 2016, several dozen installment lenders didn’t renew licenses.

Most lenders are private, so overall industry profits are difficult to track. But according to the annual financial reports installment lenders are required to file with the state, some of the largest lending chains are either treading water or closing stores as their revenues drop.

It’s unclear to what degree Missourians are taking on fewer risky loans, or if they’re simply shifting to other forms of subprime credit.

“There’s a perception companies are making money hand over fist,” said Al Leving, who stopped offering payday loans at his the Loan Machine stores years ago but still sits on the board of the United Payday Lenders of Missouri. “Many people have closed stores in recent years because the business has not been profitable.”

DRIVEN OUT

BY COMPETITION OR REGULATION? There are a variety of factors contributing to the struggles of brick-and-mortar short-term lenders.

It’s possible there was an overextension that occurred as the payday loan industry exploded in the early 2000s, leading to an oversupply of stores. The recession likely put many smaller lenders out of business. And the growing availability of products such as online installment loans and subprime credit cards has taken away some of the market.

The number of online-only licensed lenders in the state has tripled since 2012, to 197.

“I think the story is more

market-driven than regulatory driven,” said Alex Horowitz, a Pew Charitable Trusts researcher who studies small dollar loans.

Lenders interviewed by the Post-Dispatch, on the other hand, were quick to blame federal regulators.

Rules proposed last year by the Consumer Financial Protection Bureau last year, they argue, will add to their costs, reduce their customer base and put most of them out of business. The proposed rules would require lenders to assess a borrower’s ability to repay, implement income verification measures, limit loan rollovers, and provide more disclosures related to payments.

Seeing the writing on the wall, chains have closed struggling stores, Leving said. A spokesman for one of the nation’s largest payday lenders, Advance America, said it shuttered several Missouri locations last year.

State records indicate some small lenders that had only one or a handful of locations are no longer operating. Transitioning from payday to installment loans — which must be at least $500, under Missouri law — requires having more capital on hand, Horowitz said, a transition that some smaller lenders might struggle with.

Many companies that focus on high-interest short term loans, particularly those who rely heavily on payday loan profits, have had credit ratings downgraded, in part due to the industry’s gloomy regulatory outlook. It’s unclear when the rules, which have received fierce opposition from lenders, will be implemented, or whether they’ll be revised. President Donald Trump has been critical of the CFPB, and many lenders are hopeful that the new administration or Congress will prevent the rules from taking effect.

The CFPB, however, has more independence than other agen-

cies, and its director, Richard Cordray, an Obama appointee, can only be removed for cause.

Cordray’s term expires in July 2018. Earlier this month, U.S. Department of Justice, under the direction of the Trump administration, argued in court that the agency’s structure is constitutional and that Trump should have be able to remove Cordray.

“The people I’ve talked to were very relieved when Trump won the election,” said Roy Hutcheson, an Alabama businessman who operates 49 Title Cash of Missouri stores.

He said business in Missouri suffered less than in other states.

According to filings with the state, his revenue from payday and installment loans dropped from $12.8 million in 2013 to $11.2 million in 2015, the most recent year available. Charge-offs rose by more than 20 percent, to $2.8 million, and the business turned a profit of $400,000 before taxes, according to the filings.

“We’ve been in decline for four years,” he said. Some of it is due to regulations and competition from online lenders, he said, and some of it was because his customers hadn’t recovered from the recession. “Everybody’s been telling us (the economy) has been getting better,” he said, “but I don’t see the results.”

Like other lenders interviewed, Hutcheson said that in some instances banks, under pressure from the Justice Department, have cut off relationships with his stores. In some areas, he said, he can’t find a bank, so his employees go to Walmart and use cash to get a money order, which they scan and send to a bank in Alabama to be deposited.

One of the nation’s largest title lending chains, TitleMax, has also seen loan volume and revenue decline in Missouri; it has closed several stores. The company’s profit dropped from $16 million before taxes in 2014 to

ASSOCIATED PRESS

Many payday lenders now focus on installment loans — paid back in chunks over months, but still carrying triple-digit annual interest.

$14 million in 2015, the most recent year a state filing was available. Its loan volume fell from $55 million to $50.6 million, and the number of cars it repossessed in the state dropped from 8,960 to 8,137. The company didn’t respond to an interview request.

The state’s largest payday lender, QC Holdings, of Overland Park, Kan., saw its operating income in Missouri drop from $54 million in 2013 to $37 million in 2015, according to state filings.

It voluntarily delisted from the Nasdaq exchange to save money on compliance costs.

According to 2016 filing, nationwide, QC lost $5.1 million through the first nine months of the year, partly due to one-time expenses including the cost of closing stores in several states and a legal settlement. In previous filings, the company attributed flagging revenue to regulatory pressure and increased competition, including from online lenders. The company referred an interview request to an industry trade group, which declined to answer questions about a specific company.

WHAT’S NEXT? Consumer advocates have long argued that payday lenders take advantage of vulnerable cus-

tomers and that their business models depend on customers repeatedly renewing loans — thus racking up more interest and fees — before repaying. While some advocates may cheer the industry’s struggles, it’s unclear how a continued shift away from payday loans could affect cashstrapped borrowers.

Online loan products tend to be more expensive than identically structured in-person loans, and while installment loans may give the borrower more time to repay, they can still carry high interest and fees over time.

Ed Groshans, an analyst at Height Analytics, said many current payday borrowers couldn’t qualify for a loan if the current CFPB proposal was implemented. Nor do they qualify for less expensive alternatives, he said, like a personal loan from a credit union.

“I’m not a fan of the payday lending industry, but I’m not a fan of just lopping it off,” Groshans said. “The industry wouldn’t exist if there wasn’t a need.”

Walker Moskop • 314-340-8349 @walkermoskop on Twitter wmoskop@post-dispatch.com

J O I N U S O N L I N E S T L T O D A Y. C O M / B U S I N E S S

FRIDAY • 04.28.2017 • B

Rebirth in Ferguson Starbucks anniversary spotlights influx of investors

Lower-paid teachers subsidize pensions Professor says inequities are caused by Missouri plan’s structure DAVID NICKLAUS St. Louis Post-Dispatch

PHOTOS BY DAVID CARSON • dcarson@post-dispatch.com

Starbucks customer service trainee grad Tyler Peebles (left) is congratulated by Monique Williams-Moore on Thursday.

STARBUCKS BLOCK PARTY Starbucks marks its one-year anniversary in Ferguson with a free block party, featuring free food and coffee samples, entertainment from DJ Kut and games.

Location: Starbucks parking lot, 10776 West Florissant Avenue Time: 1-3 p.m.

Saturday

BY ASHLEY BAHATI LIME St. Louis Post-Dispatch

When Starbucks announced in 2015 plans to open its first store in Ferguson, the company said it would do more than just sell coffee.

The Seattle-based chain pledged to focus on job coaching for young people and creating employment. The Ferguson store, it promised, would help teach “soft skills” to youth with limited or no experience in the workforce.

For months, the city had been the scene of protests — some violent — in response to the fatal shooting of an unarmed black teenager, Michael Brown, by a white police officer. Some businesses along West Florissant Avenue, See FERGUSON • Page B6

TaskRabbit aims to be the Uber of home improvement

Manager Karen Clark restocks individual pieces of Natalies Cakes & More caramel cake, their signature item, for sale at Natalies store front on South Florissant Road in Ferguson on Thursday.

City TIF panel moves ahead on municipal court hotel

Teachers love their pensions. A generous monthly check at the end of one’s career helps make the important, and sometimes underappreciated, profession worthwhile.

I wonder if teachers in Missouri’s lower-paying rural districts realize, though, that their pension contributions help subsidize the retirements of their better-paid counterparts in districts like Rockwood and Clayton.

That’s the finding of new research by James Shuls, assistant professor of educational leadership at the University of Missouri-St. Louis. The inequities occur because the Missouri Public School Retirement System bases pensions on a teacher’s last three years of salary, and because some districts grant much steeper raises over the course of a career.

The subsidy effect isn’t just the result of differences in pay, Shuls notes, and it isn’t unique to teachers.

“Any pension system that’s designed in this way is going to have a similar problem when you have people on different earning trajectories,” he said.

“The poorer school district gives much smaller raises over time,” Shuls explained. “They have a relatively flat salary schedule.”

Well-funded districts are more generous with their experienced teachers. A suburban teacher’s pay can easily double over a 30-year career, while a typical rural teacher sees much smaller raises.

All teachers contribute 14.5 percent of pay to the pension fund each year, See NICKLAUS • Page B5

Art Museum mulls database for increasing audience

COURTESY OF TASKRABBIT

POST-DISPATCH

TaskRabbit links homeowners and renters with independent contractors.

A rendering of the proposed rehab of the old municipal court building into a hotel.

BY DEBRA D. BASS St. Louis Post-Dispatch

BY JACOB BARKER St. Louis Post-Dispatch

Members of the growing St. Louis gig economy workforce have a new outlet with TaskRabbit, a service for connecting homeowners or renters with reliable home improvement options.

Use the app to hire vetted freelancers to do handyman work, haul items, assemble furniture, install shelves or what-have-you.

The service is now in 29 regions after opening its virtual doors in St. Louis on Thursday. And executives with the

After an uncommon bout of questioning two weeks ago that held up a proposal to rehab the vacant municipal courts building downtown, a key city commission advanced the project Thursday with a unanimous vote.

The St. Louis Tax Increment Financing Commission recommended approving about $8 million in TIF assistance for a $60 million proposal to turn the historic city-owned building on Market Street into a hotel. The measure needs final approval from the Board of Aldermen.

See TASK • Page B5

Patrons view paintings at the St. Louis Art Museum in 2016.

A joint venture between Nelson Construction and Development of Des Moines, Iowa, and St. Louis-based Vertical Realty Advisors plans to buy the building from the city for $2.4 million. The building has been vacant since the city’s circuit court functions moved to the old federal courthouse across Tucker Boulevard over a decade ago.

Their proposal calls for a 150-room hotel project (city documents identify it as a Hyatt Place, but the developer said an official announcement would come later) that would turn old court-

BY MIKE FAULK St. Louis Post-Dispatch

See HOTEL • Page B5

See MUSEUM • Page B4

The St. Louis Art Museum wants to use data to attract younger and more diverse visitors.

Museum commissioners authorized staff this week to solicit proposals for building a database of loyal museum attendees as well as people who don’t visit to eventually use information provided to drive up attendance. Specifically they hope to attract more millennials, families with young children, and ethnic minorities.

BUSINESS

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BUSINESS

B2 • ST. LOUIS POST-DISPATCH

M 1 • Friday • 04.28.2017

NewGround wraps up Tulsa credit union NewGround has completed a new headquarters building for TTCU The Credit Union in Tulsa, Okla.

NewGround designed and built the six-story corporate headquarters building, which has nearly 90,000 square feet of space. The building brings senior management into a single structure and maximizes workflow efficiencies.

Features include a towering staircase that can serve as a communal meeting space, state-of-the-art training facilities to accommodate growth, a computer server room with an enhanced disaster recovery plan, a call center to handle growing member needs, and an employee lounge.

NEWGROUND

NewGround has completed the new headquarters for TTCU The Credit Union in Tulsa, Okla.

BUSINESS BULLETIN BOARD AWARDS Russell Errett, a hydraulic engineer and water manager with the U.S. Army Corps of Engineers, received the 2017 Hydrology, Hydraulics and Coastal Community of Practice Professional of the Year award.

• Elmer Belsha Leadership Award for longterm commitment to NCI: Bob Lindsey, editor, Independent News.

• Business Development Awards: Mike Becker, partner, Suburban Heights Apartments; The Orthopedic Center at SSM Health DePaul Hospital; The Boeing Co.’s 777x Wing Assembly Manufacturing Plant; and Trans-Lux Corp.

$0

• Special Recognition Awards: Joshura Davis, owner of Best Insurance Agency and president of Dellwood-Ferguson West Florissant Business Association, and Terry Freeman, professor of engineering and science at St. Louis Community College at Florissant Valley.

EXPANDING Redy Rock Communications (8110 North Broadway) signed on as a U-Haul neighborhood dealer.

Behind the Bluffs (513 Saline Road in Fenton) signed on as a U-Haul neighborhood dealer.

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Connectria Hosting collected more than 12,000 pounds of food and personal care items for Operation Food Search.

Cabela’s Outdoor Fund presented a $5,000 grant to the Greater St. Louis Area Council of the Boy Scouts of America to fund fishing equipment and summer fishing programs. The Cabela’s store in Hazelwood also donated 100 new rods and reels to support Cub Scout fishing programs in the region.

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MORE BUSINESS Air Choice One hired marketing firm Kolbeco.

Forsyth Capital Investors changed its name to BW Forsyth Partners.

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Rich & Charlie’s restaurants are celebrating the company’s 50th anniversary.

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Jerry Fox Jr. has been named senior vice president and chief information officer for BJC HealthCare.

Fox comes to BJC from Rockwell Automation in Milwaukee, where he served as global chief information officer since 2010.

He previously served as chief technology officer and director Fox Jr. of global information technology operations at Dana Corp. in Toledo, Ohio.

Fox succeeds BJC senior vice president and CIO David Weiss, who is retiring in June after 27 years with BJC. Fox holds a master’s degree in business administration and a bachelor’s degree in business administration– management information systems from Ohio University in Athens.

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The following were among leadership awards announced by North County Inc. Regional Development Association:

PEOPLE IN BUSINESS

Dr. Anna Huger joined Washington University Physicians and opened a new practice, Purely Pediatrics, in the St. Louis Children’s Specialty Care Center in Town and Country.

The Starkloff Disability Institute hired Brian Chao as business manager.

Melissa Icban joined Sedgwick Claims Management Services Inc. as the claims assistant manager.

Thomas Trice was appointed interim dean of students and Suzy Jones was appointed interim associate dean of students at Lindenwood UniversityBelleville.

Dr. Catherine Radakovic joined SVS Vision in Florissant.

Esse Health Tesson Ferry Pediatrics added Dr. Carolyn Smith.

Osborn Barr added the following: Tommy Mattler as art director; Zach Hicks as associate creative director; Cordell Jeffries as associate creative director; and Briana Gilomen as an account supervisor.

Sandler Training, Stark and Associates, Inc. hired J.B. Andrews and Julia Gray as associates.

Lisa Steiner was hired as a designer with DeZign to Sell.

Daniel Gold was promoted to pharmaceutical business manager at McGrath & Associates. Nicholas Knobbe was promoted to project development manager.

Schaub & Srote Architects added Gene Gibson as a project architect.

Sheila Moran joined Krilogy Financial as assistant to the director of operations.

POST-DISPATCH BUSINESS STAFF ROLAND KLOSE

Business editor

314-340-8128

JACOB BARKER

Economic development

314-340-8291

DEBRA BASS

Retail, fashion, small business

314-340-8236

LISA BROWN

Retail, consumer products, marketing

314-340-8127

Bulletin Board and People in Business submissions should be sent to:

MIKE FAULK

Business of sports and civic agencies

314-340-8656

biznetworking@post-dispatch.com.

BRYCE GRAY

Energy and environment

314-340-8307

Or you can mail a release to:

OPENING

SAMANTHA LISS

Business of health

314-340-8017

SSM Health opened SSM Health Outpatient Center:

DAVID NICKLAUS

Business columnist

314-340-8213

NEW BUSINESS Title Partners and Commercial Title Partners Agency CEO Dave Davis announced the creation of Nationwide Construction Disbursing LLC.

• 711 Veterans Memorial Parkway, St. Charles

MARK SCHLINKMANN Transportation and real estate

SUBMIT AN ITEM

Business News, 900 NorthTucker Boulevard, St. Louis, Mo. 63101

314-340-8265

To e-mail a staff member, use the first initial and last name, followed by @post-dispatch.com

BUSINESS CALENDAR MONDAY SMALL BUSINESS • Justine Petersen and Small Business Majority host a panel discussion on fostering and supporting inclusion in the start-up/incubator culture.

• 3-4:30 p.m., Justine Petersen, 1023 North Grand Boulevard • Free. Register: 314-533-2411 ext. 132 or email ggondolfi@justinepetersen.org INTELLECTUAL PROPERTY LAW • SCORE presents this workshop on patents, trademarks and copyrights.

• 5:30-8:30 p.m., Fontbonne University, 6800 Wydown Boulevard, Anheuser-Busch Hall, Room 202

• $35 preregistered, $45 at the door. Register: http://conta.cc/2oENgiw QUICKBOOKS • SCORE presents this workshop on how to use QuickBooks Online.

• 6-9 p.m., Fontbonne University, 6800 Wydown Boulevard, Anheuser-Busch Hall, Room 203 •$35 preregistered, $45 at the door. Register: http://conta.cc/2ptQP0a

TUESDAY SMALL BUSINESS • The U.S. Small Business Administration sponsors this workshop on financing options for your small business.

• 1-3 p.m., St. Louis County Library

Headquarters, 1640 South Lindbergh Boulevard • Free; RSVP encouraged to thomas.daiber@ sba.gov or 314-539-6614

FRIDAY JOB FAIR • St. Charles Community College hosts a free job fair.

• 9 a.m.-1 p.m.; College Center, St. Charles Community College campus, 4601 Mid Rivers Mall Drive • Free for job seekers; $70 for nonprofit organizations, $95 for for-profit organizations. For questions, contact Jenny Hahn Schnipper, 636-922-8244 or jschnipper@stchas.edu

SATURDAY MAY 6 NONPROFIT • SCORE presents this workshop on how to start a nonprofit business.

• 10 a.m.-1 p.m., Fontbonne University, 6800 Wydown Boulevard, Anheuser-Busch Hall, Room 203 • $35 preregistered, $45 at the door. Register: http://conta.cc/2pf0gQb SMALL BUSINESS • SCORE presents this seminar on how to start your own business.

• 8:15 a.m.-3 p.m., Fontbonne University, 6800 Wydown Boulevard, Anheuser-Busch Hall, Room 202 • $60 preregistered, $70 at the door.

Register: http://conta.cc/2pZ9NLD

Stocks closed modestly higher Thursday, nudging the Nasdaq composite to another record and the Standard & Poor’s 500 index to within a hair of its all-time high. Technology stocks led the gainers. Phone companies lagged the most. Energy stocks also fell.

MARKET WATCH

04.28.2017 • Friday • M 1

quarter. $30 25

39

20

MARKET WATCH 15 $18.40

freight, increased prices and worked to control costs. $115

were expecting. $40

F M 52-week range

A

$45.99

110

38 37 $29.81

105

F M 52-week range

A

ST. LOUIS POST-DISPATCH • B3 100

$40.62

$80.68

F M 52-week range

A

$115.15

TRACK YOUR YOUR STOCKSSTOCKS AND GET THE LATEST NEWS • STLTODAY.COM /BUSINESS TRACK AND GET NEWS STLTODAY.COM/BUSINESS .com Vol.: 21.4m (3.2xTHE avg.) LATEST PE: 48.2 Vol.: 34.5m • (2.2x avg.)

PE: 22.2 Vol.: 5.2m (1.4x avg.)

PE: 22.4 Stocks closed modestly higher Thursday, nudging the Nasdaq composite to another record and the Standard & Poor’s 500 index to within a hair of its all-time high. Technology stocks led the gainers. Phone companies lagged the most. Energy stocks also fell.

Under Armour

Under Armour

UAA

F M 52-week range

37

A

$29.81

$45.99

A

Mkt. Cap: $187.37 b

Yield: 1.6%

Union Pacific

Mkt. Cap: $92.08 b

A $40.62

100 $80.68

AAL

Close: $43.98 -2.42 or -5.2% The airline said earnings plunged in the first quarter as higher costs offset higher revenue from airfares. $50 45

105 F M 52-week range

Yield: 2.1%

American Airlines

UNP

Close: $113.53 3.36 or 3.0% The railroad operator’s first-quarter profit climbed as it hauled more freight, increased prices and worked to control costs. $115 110

Vol.: 34.5m (2.2x avg.)

PE: 22.2 Mkt. Cap: $187.37 b Yield: 1.6%

Vol.: 21.4m (3.2x avg.)

PE: 48.2 Close: $21.67 1.96 or 9.9% Charts show stocks that made the news yesterday.

Mkt. Cap: $4 b Yield: ...

The athletic apparel maker reported higher costs but still beat Wall Comcast CMCSA Street’s expectations for the first Close: $39.59 0.80 2,400or 2.1% 21,080 quarter.

Dow Jones industrials The cable TV and entertainment $30 Close: 20,981.33 company reported far higher 2,360 20,720 Change: 6.24 (flat) first-quarter earnings than analysts 25

.1%)

CMCSA

38

20

$18.40

Comcast

39

25

UAA

Yield: ...

Close: $39.59 0.80 or 2.1% The cable TV and entertainment company reported far higher first-quarter earnings than analysts were expecting. $40

Close: $21.67 1.96 or 9.9% The athletic apparel maker reported higher costs but still beat Wall Street’s expectations for the first quarter. $30

15

Mkt. Cap: $4 b

F M 52-week range

40

A $115.15

$24.85

Vol.: 5.2m (1.4x avg.)

PE: 22.4 Mkt. Cap: $92.08 b Yield: 2.1%

F M 52-week range

A $50.64

Vol.: 19.0m (2.7x avg.)

PE: 9.2 Mkt. Cap: $21.8 b Yield: 0.9%

Union Pacific UNP American Airlines AAL Southwest Airlines LUV Close: $113.53 3.36 or 3.0% 21,080 Close: $43.98 -2.42 or -5.2% ExchangeRates Close: $55.75 -1.19 or -2.1% Futures S&Prailroad 500 operator’s first-quarter CHICAGO BOT Dow JonesCHGindustrials The The airline in The company reported a steep drop DATEsaid earnings CLOSE plunged FOREIGN CURRENCY IN DOLLARS Close: 2,388.77 Close:costs 20,981.33 profit climbed as it hauled more 20,720 the first quarter as higher offin first-quarter earnings as it took in CLOSE PREV Corn May 17 362 +3 freight, increased prices and worked set higher revenue from airfares. less revenue on average from each Change: 1.32 (0.1%) Change: 6.24 (flat) to control costs.

Argentina .0648 .0646 passenger.

Soybeans May 17 945.75 were expecting.

20,360 2,320 20,360 10 DAYS 10 DAYS 10 DAYS $115 20 $60 Australia .7470 .7468 $40 Wheat $50 May 17 413.50 +5.75 2,400 22,000 22,000 Brazil .3148 .3138 110 39 15 CHICAGO MERC CLOSE CHG 45 DATE F M A Britain 55 1.2903 1.2843 105 21,000 21,000 38 Feeder cattle Apr 17 140.85 +1.00 52-week range 2,300 Canada .7342 .7346 100 40 50 37 $18.40 $45.99 Apr 17 135.60 +3.58 F M A F M A F .1451 M A.1451 F M A China 20,000Live cattle 20,000 52-week range 52-week range 52-week range 52-week range Hogs May 17 66.90 +2.23 Vol.: 21.4m (3.2x avg.)

PE: 48.2 2,200 Euro 1.0882 1.0899 $80.68 $115.15 $24.85 $50.64 $35.42 $59.68 $29.81 $40.62 19,000Milk Mkt. Cap: $4 b Yield: ...

19,000 Apr 17 15.18 -.03 India .0156 .0156 Vol.: 5.2m (1.4x avg.)

PE: 22.4 Vol.: 19.0m (2.7x avg.)

PE: 9.2 Vol.: 10.3m (1.9x avg.)

PE: 15.7 Vol.: 34.5m (2.2x avg.)

PE: 22.2 Copper Mkt. Cap: May 17 258.00 -.85 2,100 Israel Mkt. Cap: $33.71 .2753 .2746 Mkt. Cap: $92.08 b Yield: 2.1% $21.8 b Yield: 0.9% b Yield: 0.7% Mkt. Cap: $187.37 b Yield: 1.6% 18,000 18,000 Comcast CMCSA Japan .008990 .008978 ICE DATE CLOSE CHG Close: $39.59 0.80 or 2.1% American Airlines AAL Southwest Airlines LUV Mexico Paypal PYPL Union Pacific2,000 UNP .052511 .052050 17,000 17,000 Cotton May 17 79.32 -1.37 N D JClose: $43.98 F M A N D J F M A J F M A The cableNTV andDentertainment -2.42 or -5.2% Close: $55.75 -1.19 or -2.1% 2.74 or 6.2% .0175 Russia Close: $47.15 .0175 Close: $113.53 3.36 or 3.0% company reported far higher May 17 127.10 -1.05 The airline said earnings plunged in Coffee The company reported a steep drop So. Africa The digital payments The railroad operator’s first-quarter .0748 company re.0753 HIGH LOW CLOSE CHG. %CHG. WK MO QTR YTD the first quarter as higher costs offfirst-quarter earnings than analysts earnings as it took in ported earnings that easily surprofit climbed as it hauled more Sugar in first-quarter Jul 17 28.33 +.07 So. Korea .000882 .000881 set higher revenue from airfares. less revenue on average from each passed Wall Street’s forecasts. were expecting. freight, increased prices20981.33 and worked+6.24 +0.03% DOW 21005.80 20935.80 s s s +6.17% passenger.

Switzerland 1.0064 1.0058 to control costs.

DOW Trans.

9227.86 9123.15 9193.99 +26.25 +0.29% s s t +1.66% $40 DATE CLOSE CHG NEW YORK NYSE NASD $50 s s s +7.27% $60 $50 $115 711.47 704.99 707.58 +2.41 +0.34% DOW Util.

Crude oil Jun 17 48.97 -.65 39 1,793 Vol. (in mil.) 3,951 NYSE Comp. 11601.33 11545.85 11578.52 -14.39 -0.12% s s s +4.72% 45PreciousMetals 110 45 s s s +12.37% Gas blend 55 May 17 1.5500 -.0403 1,804 Pvs. Volume 3,951 6050.71 6031.59 6048.94 +23.71 +0.39% NASDAQ CHG NEW YORK CLOSE 38 40 105 Advanced 1466 1291 S&P 500 2392.10 2382.68 2388.77 +1.32 +0.06% s s s +6.70% Heating oil May 17 150.72 -2.95 Gold 1264.70 +2.60 40 37 50 Declined 1478 1489 35 S&P 400 1754.50 1743.92 1749.41 +1.05 +0.06% s F s s +5.35% 100 M A F M A Natural gas Jun 17 3.239 -.032 F M A F M A F M A Silver 17.27 -.08 New Highs 264 238 s 52-week s s +6.53% Wilshire 5000 24988.23 24889.86 24955.80 +6.59 +0.03% range 52-week range 52-week range 52-week range 52-week range New Lows 27 45 Russell 2000 1423.51 1413.68 1417.13 -2.30 -0.16% s s s +4.42% Platinum 948.80 +2.90 Chicago BOT is in cents. $24.85 $50.64 $35.42 $59.68 $34.00 $48.10 $80.68 $115.15 $29.81 $40.62

StocksRecap

Vol.: 19.0m (2.7x avg.)

Vol.: 5.2m (1.4x avg.)

PE: 22.4 Mkt. Cap: $92.08 b Yield: 2.1%

PE: 22.2 Vol.: 34.5m (2.2x avg.)

Mkt. Cap: $187.37 b Yield: 1.6%

Stocks of Local InterestMkt. Cap: $21.8 b

PE: 9.2 Yield: 0.9%

Vol.: 10.3m (1.9x avg.)

PE: 15.7 Mkt. Cap: $33.71 b Interestrates Yield: 0.7%

Vol.: 34.4m (5.3x avg.)

PE: 41.0 NET 1YR Mkt. Cap: $56.63 b Yield: ...

TREASURIES LAST CHG AGO SOURCE: Sungard AP 3-month T-bill .80 -0.01 .24 6-month T-bill .97 ... .39 52-wk T-bill 1.06 ... .57 2-year T-note 1.26 -0.01 .82 5-year T-note 1.82 -0.03 1.32 10-year T-note 2.30 ... 1.85 30-year T-bond 2.97 +0.01 2.70

Interestrates

Southwest Airlines LUV Paypal PYPL 52-WK YTD% 1YR% 52-WK YTD% 1YR% American Airlines AAL Union Pacific UNP NAME TKR LO HI CLOSE CHG %CHG CHG RTN P/E DIV NAME TKR LO HI CLOSE CHG %CHG CHG RTN P/E DIV Close: $55.75 -1.19 or -2.1% Close: $47.15 2.74 or 6.2% Close: $43.98 -2.42 or -5.2% The company reported a steep drop -6.4 +78.3 The14 digital AT&T Inc -.53 -1.3 -6.2 +11.3 1.96 plunged Isle of Capri ISLE 14.30 27.04 23.12 -3.78 -14.1 ... payments company reThe airline said 15 earnings in Close: $113.53 T 3.36 36.10 43.89 39.91 or 3.0% in first-quarter earnings as it took in ported earnings that easily surthe first quarter 26 as higher costs offAegion Corp AEGN 17.18 26.68 23.67 +.08 +0.3 -0.1 +10.1 ... LMI Aerospace The railroad operator’s first-quarter LMIA 7.01 13.94 13.85 -.03 -0.2 +60.7 +57.0 dd ... less revenue on average from each passed Wall Street’s forecasts. set higher revenue from airfares. profit climbed asDOX it hauled more 54.12 62.65 61.50 +.03 ... +5.6 +10.1 17 0.88f Lee Ent Amdocs LEE 1.74 3.92 2.80 -.25 -8.2 -3.4 +35.0 8 ... passenger.

The yield on the freight, increased prices and worked $60 64.87 85.65 85.27 +.04 ... +19.9 +13.5 Ameren Corp AEE 46.30 56.57 55.03 -.13 -0.2 $50 LOW 21 1.40 $50 +4.9 +21.5 20 1.76f Lowes 10-year Treasury

to control costs.

American Railcar ARII 35.43 51.10 43.14 -.29 -0.7 -4.7 +5.3 12 1.60 Mallinckrodt plc $115 45 +6.4 -9.6 3.19e ABInBev BUD 98.28 136.08 112.23 +.03 ...

MasterCard 110 Arch Coal ARCH 59.05 86.47 69.95 -1.15 -1.6 -10.4 ... dd ... McDonald’s 40 F A AVDL 8.61 15.45 9.82 -.01 -0.1 -5.5 -19.2 dd M... Monsanto Co Avadel Pharma 105 52-week range Bank of America BAC 12.05 25.80 23.65 -.24 -1.0 +7.0 +60.1 15 0.30f Olin 100 $24.85 $50.64 A BDC M 54.97 81.33 71.23 +.08 +0.1 -4.7 +9.9 14 0.20 Belden Inc F Panera Bread Vol.: 19.0m (2.7x avg.)

PE: 9.2 52-week Boeing BA range 122.35 185.71 183.22 +1.51 +0.8 Mkt.+17.7 +39.9 Cap: $21.8 21 b 5.68f Yield: 0.9% Peabody Energy $80.68 $115.15 Build-A-Bear Wkshp BBW 8.05 15.85 9.60 +.70 +7.9 -30.2 -30.2 31 ...

Peak Resorts Southwest Airlines LUV Vol.: 5.2m (1.4x avg.)

PE: 22.4 CAL 21.27 36.61 28.80 -.12 -0.4 -12.2 +10.6 14 0.28 Caleres Inc. Perficient Mkt. Cap: $92.08CASS b Yield: 2.1% Close: $55.75 31 -1.19 or -2.1% Cass Info. Systems 46.06 74.83 65.90 -1.45 -2.2 -10.4 +35.0 0.92 Post Holdings The company Centene Corp.

CNC 50.00 75.57 72.95 +.15 +0.2 +29.1 +9.1 reported 17 ...a steep drop in first-quarter earnings asReinsGrp it took in American Airlines AAL CHTR 214.06 350.38 348.80 +3.40 +1.0 ... from each Charter less+21.1 +48.7 revenue on22 average Reliv Close: $43.98 -2.42 or -5.2% passenger.

C 38.31 62.53 59.39 -.55 -0.9 -0.1 +28.7 12 0.64 Citigroup The airline said earnings plunged in $60 -3.0 +26.8 20 0.90b Spire Inc Commerce Banc.

CBSH 42.44 60.61 56.05 -.45 -0.8 the first quarter as higher costs offStifel Financial Edgewell EPC 69.63 88.00 71.63 -1.29 -1.8 -1.9 -11.3 27 ... set higher revenue from airfares.

55 Emerson EMR 48.45 64.36 60.83 -.39 -0.6 +9.1 +12.5 24 1.92 Supervalu Inc. ENR 41.62 60.07 59.52 +.51 +0.9 +33.4 +35.8 22 1.10 Target Corp.

Energizer Holdings 50 $50 F M UPS B A +64.4 19 0.44 Enterprise Financial EFSC 25.76 46.25 43.60 -.50 -1.1 +1.4 52-week range US Bancorp Esco Technologies ESE 37.32 60.60 60.30 -.15 -0.2 +6.4 +55.7 36 0.32 $35.42 $59.68 45 ESRX 57.80 80.02 61.40 +.12 +0.2 Express Scripts Vol.: -10.7 -17.5 10.3m (1.9x10 avg.)... US Steel PE: 15.7

was unchanged at 2.30 percent Thursday. Yields +.03 ... +15.7 +13.1 35 26 3.76 A affect on F M rates A -.24 -0.2 +10.7 +26.6 21 2.1652-week range mortgages and $59.68 $34.00 $48.10 -.72 -2.2 +27.2 +56.3 50 0.80 other consumer -.12 ... +52.8 +47.6 47 ... (5.3x avg.)

PE: 15.7 loans. PE: 41.0 Vol.: 34.4m

45 MNK 41.57 85.83 46.38 +.19 +0.4 -6.9 -29.3 ...

55 MA 86.65 116.56 117.10 +.93 +0.8 +13.4 +20.3 40 33 0.88

MCD 50 110.33 142.00 140.87 F M MON 88.76 117.33 116.50 52-week range $35.4218.24 33.88 32.58 OLN

PNRA 185.69 316.21 313.39 Vol.: 10.3m (1.9x avg.)

Mkt. Cap: $33.71 b Yield: 0.7% -4.9 Mkt. Cap:...$56.63 b BTU 22.61 28.62 26.21 -.32 -1.2 ...

SF 45 28.49 56.62 48.87 -.34 -0.7 -2.2 +44.1 19 SVU 40 3.20 5.74 4.17 +.02 +0.5 -10.7 -22.4 7

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Cass 1Q earnings, sales climb • Cass Information Systems said firstquarter earnings rose 10 percent.

Net income for the period ended March 31 was $6.3 million, or 56 cents per diluted share, the company said Thursday. That compared favorably to year-earlier net income of $5.8 million, or 51 cents. Revenue rose 5 percent to $32.3 million.

Cass, based in unincorporated St. Louis County, provides invoice payment and information service for transportation, energy and telecom businesses.

Alphabet 1Q revenue surges • Google parent Alphabet Inc. reported Thursday a 22.2 percent rise in quarterly revenue, driven by a surge in advertising on mobiles and its popular YouTube video service.

Alphabet’s net income rose to $5.43 billion, or $7.73 per share, in the first quarter ended March 31.

That compared favorably to $4.21 billion, or $6.02, in the year-earlier period. The company’s consolidated revenue rose to $24.75 billion from $20.26 billion.

Amazon beats expectations • Amazon.com Inc. said Thursday that revenue from its cloud business, advertising and subscription services rose in the first quarter, helping it beat profit expectations and sending its shares to a record high in extended trading.

The world’s largest online retailer said net income rose 41 percent to $724 million, or $1.48 per share, marking the eighth straight quarter that Amazon posted a net profit.

Analysts on average were expecting $1.12 per share, according to Thomson Reuters I/B/E/S. Total net sales rose 22.6 percent to $35.71 billion, slightly ahead of analysts’ average estimate.

Microsoft 3Q sales disappoint • Microsoft’s cloud business propelled its fiscal third-quarter earnings above Wall Street’s expectations, but revenue fell short, sending the software maker’s stock lower in after-hours trading.

Microsoft Corp. said Thursday that it earned $4.8 billion, or 61 cents per share, in the JanuaryMarch period. That’s up 28 percent from $3.76 billion, or 47 cents per share, in the same period a year earlier.

Excluding one-time items, Microsoft earned $5.71 billion, or 73 cents per share. That’s up 13 percent from $5.04 billion, or 63 cents per share, a year earlier.

The company posted revenue of $22.09 billion, up 8 percent from $20.53 billion.

Pending home sales dipped in March • Fewer consumers signed contracts to buy U.S. homes last month as the spring buying season revs up with stiff competition for homes amid lagging inventory.

The National Association of Realtors said Thursday that its pending home sales index slipped 0.8 percent to 111.4 in March, from 112.3 in February.

Modest growth in U.S. durable goods • Orders for long-lasting manufactured goods posted only a modest gain in March as a key category that tracks business investment plans remained weak.

The Commerce Department said Thursday that orders for durable goods rose a slight 0.7 percent in March, the weakest showing since a 0.9 percent decline in December.

The strength came from big increases in the volatile categories of commercial aircraft and military aircraft that offset a drop in demand for motor vehicles.

The category that serves as a proxy for business investment plans edged up a slight 0.2 percent, the third straight month that this key category has shown weakness.

Mortgage rates reverse course • Long-term U.S. mortgage rates rose this week for the first time in five weeks. The benchmark 30-year rate pushed back above the key threshold of 4 percent.

Mortgage buyer Freddie Mac on Thursday said the average rate on 30-year fixed-rate home loans increased to 4.03 percent from 3.97 percent last week. The rate stood at 3.66 percent a year ago. The rate on 15-year mortgages rose to 3.27 percent from 3.23 percent last week.

From staff and wire reports

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S&P 500 2388.77 +1.32 Frankfurt DAX 12443.79 -29.01 London FTSE 100 7237.17 -51.55 Hong Kong Hang Seng 24698.48 +120.05 5271.70 -16.18 Paris CAC-40 Mexico City Bolsa 49440.97 -124.20 Tokyo Nikkei 225 19251.87 -37.56 Sao Paolo Bovespa 64676.55 -185.37 Toronto 15506.47 -143.07 8844.78 +14.49 Zurich

Paypal *Sale price percentages include PYPL all rebates and incentives. Market bonus down payment assistance and GM tag. Includes $1,000 GM credit card incentive.

Build-A-Bear reports lower 1Q 40 sales, earnings • Build-A-Bear 35 Workshop saw F both sales M and A earnings slide in the range first quarter.

52-week $34.00 $48.10 The Overland-based retailer reported Thursday net income Vol.: 34.4m (5.3x avg.)

PE:of 41.0 $2.8 or 17 b cents per diluted Mkt.million, Cap: $56.63 Yield: ... share, in the period ended April 1.

SOURCE: Sungard AP That compared unfavorably to net income of $3.5 million, or 22 cents, in the year-earlier period.

Revenue fell to $90.6 million from $95 million in the year-earlier period. Same-store sales fell 8.1 percent, the retailer said.

Sales in the recent quarter were affected “by shifts in both Valentine’s Day and Easter as well as the associated school break periods,” CEO Sharon Price John said in a statement.

The company also attributed the decline in total revenues, in part, to unfavorable currency exchange rates caused by the UK’s vote last year to leave the European Union.

Moodys AAA Corp Idx 3.88 -0.01 3.65 Barclays US Corp

INDEX LAST CHG CHG YTD

Bommarito CHEVROLET

BUSINESS DIGEST $50

Barclays USAggregate 2.56 -0.01 2.25 Barclays US High Yield 5.65 -0.05 7.56

GlobalMarkets

Vol.: 34.4m (5.3x avg.)

PE: WITh 41.0 EVERy nEW ChEVROLET pURChASE nATIOnWIDE WARRAnTy Mkt. Cap: $56.63 b Yield: ...

3SOURCE: year Sungard maintenance included with every new chevrolet purchase AP "WHERE PRICE SELLS CARS"

Close: $47.15 2.74 or 6.2% The digital payments company reported earnings that easily surpassed Wall Street’s forecasts.

.88 .38 .38

4.00 3.50 3.50

...

...

Dividend Footnotes: a - Extra dividends were paid, but are not included. b - Annual rate plus stock. c - Liquidating dividend. e - Amount declared or paid in last 12 months. f - Current annual rate, which was increased by most recent dividend announcement. Airlines i - Sum of dividends paid afterLUV stock split, no regular rate. j - Sum of dividends paid this year. Most recent dividend was omitted or deferred. k - Declared or paid this year, a cumulative issue with dividends Southwest $50 in arrears. m - Current annual rate, which was decreased by most recent dividend announcement. p - Initial dividend, annual rate not known, yield not shown. r - Declared or paid in preceding 12 months plus stock dividend. t - Paid $55.75 -1.19 or -2.1%date. PE Footnotes: q - Stock is45a closed-end fund - no P/E ratio shown. cc - P/E exceeds 99. dd - Loss in last 12 months. inClose: stock, approximate cash value on ex-distribution

The company reported a steep drop in first-quarter earnings as it took in less revenue on average from each passenger. $60 AUTOMATIC

AP PRIME FED RATE FUNDS

2.47 +0.02

Barclays Glob Agg Bd 1.60 ... ...

...

TGT 35 52.72 80.51 56.09 +.11 +0.2 -22.3 -29.4 11 2.40 F M A UPS 100.05 120.44 108.83 52-week range +1.21 +1.1 -5.1 +4.3 19 3.32f USB -0.4 +1.1 +22.7 16 1.12 $34.0038.48 56.61 51.92 -.20 $48.10

Verizon Mkt. -20.9 Cap:+155.4 $33.71dd b0.68m Yield: 0.7% Foresight Energy FELP 1.34 8.33 5.12 -.09 -1.7 40 F M A WMT 62.72 75.77 75.44 FF 9.77 16.58 15.81 +.35 +2.3 +13.7 +59.2 12 0.24a WalMart FutureFuel SOURCE: Sungard 52-week range Paypal PYPL Walgreen Boots WBA 75.74 88.00 85.89 GM 27.34 38.55 34.54 +.16 +0.5 -0.9 +11.5 6 1.52 General Motors $24.85 $50.64 Close: $47.15 2.74 or 6.2% Wells Fargo WFC 43.55 59.99 54.44 Home Depot HD 119.20 154.81 156.12 +1.90 +1.2 24 3.56f The+16.4 +16.1 digital payments company reVol.: 19.0m (2.7x avg.)

PE: 9.2 +36.6 +91.5 7 easily ... World Point Term.

Huttig Building Prod HBP 4.29 9.24 9.03 +.28 +3.2 WPT 14.25 17.90 16.71 ported earnings that surMkt. Cap: $21.8 b Yield: 0.9% passed Wall Street’s forecasts.

AP Muni Bond Idx

Yield: ...

SKIS +89.2 dd 0.28 SOURCE: Sungard Paypal3.02 6.20 5.60 -.05 -0.9 +0.9 PYPL PRFT 14.15 22.66 17.57 -.07 -0.4 +0.5 -17.0 25 ...

Close: $47.15 2.74 or 6.2%

POST 68.76 89.04 84.15 -.69 re--0.8 +4.7 +18.9 45 ...

The digital payments company ported 90.26 132.79 129.59 earnings that easily surRGA -.93 -0.7 +3.0 +36.5 14 1.64f passed Wall Street’s forecasts.

RELV 3.84 55.37 6.58 +.11 +1.7 +41.8 +24.5 ... $50 59.54 71.21 69.25 -.25 -0.4 +7.3 SR +10.3 20 2.10

NET 1YR BONDS LAST CHG AGO

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Meandering stock indexes toy with record high levels ASSOCIATED PRESS

NEW YORK • U.S. stock in-

dexes fluttered up and down Thursday, then ended the day a hair above where they started. The slight gains were enough to nudge the Nasdaq composite to another record and the Standard & Poor’s 500 index to within a whisper of its all-time high.

It was the second straight day where indexes made only modest, meandering moves, a downshift from big gains made early in the week. The Standard & Poor’s 500 index rose 1.32 points, or 0.1 percent, to 2,388.77 and is within a third of a percent of its record.

The Dow Jones industrial average added 6.24 points, less than 0.1 percent, to 20,981.33.

The Nasdaq composite rose 23.71, or 0.4 percent, to 6,048.94 and reached a closing high for the third time in four days.

Gains by Under Armour, Comcast and other companies reporting stronger-thanexpected profits on Thursday helped to offset a slump in energy stocks. The encouraging reports added to the lengthening list of companies saying they earned more in the first three months of 2017 than Wall Street had forecast. Analysts expect this to be the strongest quarter of growth in years.

The reports have helped lift stocks and temper concerns, at least a bit, that the market had grown too expensive.

“Expectations were high, and they needed to deliver, so thankfully they have delivered,” said Nate Thooft, senior portfolio manager at Manulife Asset Management. “As long as earnings continue to follow through and economic data doesn’t roll over materially, stocks can keep going.

People will say that valuations are expensive, but I would say, ‘Yeah, but not relative to fixed income.’”

Under Armour jumped to the biggest gain in the S&P 500 after reporting bigger profits than analysts expected. A rise in sales abroad, particularly in Asia, helped push its revenue to $1.12 billion from $1.05 billion in last year’s first quarter.

The company’s A-class shares climbed $1.96, or 9.9 percent, to $21.67.

PayPal Holdings jumped $2.74, or 6.2 percent, to $47.15 after also reporting stronger revenue and earnings than Wall Street had forecast.

Comcast’s A shares rose 80 cents, or 2.1 percent, to $39.59 after stronger revenue at theme parks it acquired as part of its NBCUniversal purchase helped it to report stronger first-quarter results than analysts expected.

B4 • ST. LOUIS POST-DISPATCH

BUSINESS

M 1 • Friday • 04.28.2017

PGAV takes reins of key Memphis redevelopment agency Part of firm’s duties will be to help agency pick director

BY JACOB BARKER St. Louis Post-Dispatch

The urban planners at PGAV have worked closely enough with local governments over the years that they have taken on the role of de facto planning staff before.

But even St. Louis-based PGAV says its latest assignment in Memphis, Tenn., is a bit unique.

“The long-term relationship isn’t unusual,” said Andy Struckhoff, associate director of PGAV Planners. “There’s a lot of communities we’ve worked with for a very long time. … Directly hav-

ing sort of an interim staff role is a little bit new and different for us.”

For the next several months, the firm based in downtown St. Louis will be leading the Community Redevelopment Agency of the city of Memphis and Shelby County, Tenn. Part of its job is to “work ourselves out of a job” by helping the CRA pick its first executive director, Struckhoff said.

Memphis and Shelby County’s CRA oversees the region’s taxincrement financing, or TIF, districts. TIF is supposed to encourage development by allowing developers to pay for project costs and infrastructure improvements using revenue generated when property tax increases above a set baseline in the area.

It’s a slightly different ap-

Tax breaks in Forest Park Southeast may be cut ‌

proach than St. Louis, which typically approves TIFs for individual projects rather than broad areas (Paul McKee’s NorthSide Regeneration excepted).

Memphis has only two such districts now. One is smaller, but one covers a large area north of downtown. Called the Uptown TIF, it has already been in existence for more than a decade.

But Memphis is looking at adding more TIF areas as it tries to make the CRA a more active entity in regional development.

“We know there are other opportunities around our city and we want to capitalize on those opportunities,” said Doug McGowen, Memphis’s chief operating officer.

PGAV, which also includes an architecture division and until recently employed St. Louis

Mayor Lyda Krewson as chief financial officer, got its gig in Memphis after writing a TIF policy and procedure manual for the city in 2009.

McGowen said that after Memphis Mayor Jim Strickland took office in early 2016, he and Shelby County Mayor Mark Luttrell decided to make the CRA a stronger, more active entity.

“Since they had done the study for the city and the county, we thought what better group of individuals than PGAV,” McGowen said.

Using PGAV to find a CRA director who can lead an independent agency focused on redevelopment will lead to the “CRA becoming more of an integral part of the development of the Memphis-Shelby County metropolitan area,” CRA board chair

McKinley “Mack” Martin said.

In addition to finding a director, PGAV also may help set the direction of the CRA going forward. One new project it may start to work on is expanding the Uptown TIF to include the area around the St. Jude Children’s Research Hospital.

When the contract is up and a new director takes their place, PGAV hopes that isn’t the end of its work in the city. In the meantime, Struckhoff and other PGAV Planners employees are making the commute to Memphis more frequently.

“We’ve had a long positive relationship down in Memphis, and we certainly hope to keep that way,” Struckhoff said.

Jacob Barker • 314-340-8291 @jacobbarker on Twitter jbarker@post-dispatch.com

Apartments are planned for old Gravois Park publishing building

BY JACOB BARKER St. Louis Post-Dispatch

CHRISTIAN GOODEN • cgooden@post-dispatch.com

A property in the 4400 block of Swan Avenue is slated to be demolished to make way for affordable housing.

BY JACOB BARKER St. Louis Post-Dispatch

The days of offering 10 years of tax abatement to anyone who wanted to rehab a house in the strengthening Forest Park Southeast Neighborhood may be numbered.

That was the indication Tuesday from the city’s Land Clearance for Redevelopment Authority, which vets requests for the property tax breaks.

Two requests were before the board Tuesday. One, a house rehab on Oakland Avenue, sought just five years of property tax abatement. Another, a proposal for a new home on Gibson Avenue, wanted 10 years.

The LCRA board has previously discussed whether it’s time to reduce from 10 years the length of abatement offered in the neighborhood,which seems to be turning around with new projects by the day.

“It’s starting to change, and we’re starting to ratchet down,” said Michael Griffin, a St. Louis Development Corp. staff member who reviews abatement requests.

But ultimately, reducing the amount will require agreement from Park Central Development, the community development corporation that reviews development proposals in the neighborhood, and the area’s alderman, Joe Roddy.

Another plan for a new house sought 10-year property tax abatement for a 2-story house with a 2-car garage and a basement apartment. The developer anticipates a sale price of $466,000.

Board members questioned

why the higher abatement was being sought.

Brent Crittenden, chief executive of design and development firm UIC, which is building the new home, said Park Central supported the request because the home would be built on a slope and bring the land into compliance with the form-based development code governing the area. A prior owner had wanted to keep the lot open in violation of the code.

But Crittenden said he and other builders knew abatement policies were changing in the area.

“We have gotten direction from Alderman Roddy and Park Central that the abatement was going to be changed to five-year this year,” he said.

LCRA Chair Chris Goodson indicated it’s too soon yet to take away abatement altogether.

“Those blocks are starting to come alive but there’s still kind of a hit or miss,” he said.

In other development action, the board of the city’s Enhanced Enterprise Zone, which offers incentives for development that brings jobs to certain areas, granted 10 years of tax abatement to the owners of 2101 Chouteau Avenue in Downtown West.

Charleville Vineyard, Winery and Microbrewery is expanding there from Ste. Genevieve, Mo., with Charleville Brewing Co. & Restaurant. After the $2.7 million renovation, the microbrewery is expected to employ 30 to 40 people.

Charleville is partnering with Paul and Wendy Hamilton, owners of Eleven Eleven Mississippi, Vin de Set, PW Pizza and 21st Street Brewers Bar.

A vacant building in Gravois Park that once housed the publisher of several German-language publications could soon undergo a $1.35 million rehab.

Blackline Investments LLC has submitted a plan to St. Louis to put 15 apartments into the vacant building at 3600 Texas Avenue, near the intersection of Miami Street and Jefferson Avenue in the Gravois Park neighborhood.

And it couldn’t come any sooner. The city’s Land Clearance for Redevelopment Authority first sought developers for the property after dangling 10-year tax abatement in 1995.

Now, the $1.35 million plan has finally taken up the city on its tax abatement offer and promises to bring back to life the structure that once housed the Louis Lange Publishing Co. The LCRA Board gave the nod to the developer Tuesday.

Louis Lange published Die Abendschule, a German-language literary magazine started in 1854, according to the St.

ST. LOUIS DEVELOPMENT CORP.

Part of the building targeted for redevelopment as apartments.

Louis Media History Foundation. It also published Lutherische Zionsbote, Die Rundschau and the Illustrated Home Journal.

Blackline is affiliated with Michael Schwartz, an architect and director of development for Rothschild Development. The developer also plans to use historic tax credits for the project.

Beyond this project, there’s interest from developers in a

church and a school nearby, said Michael Griffin, who handled the project for the St. Louis Development Corp. Proposals could be brought before the LCRA soon.

“All of a sudden there’s some interest in this area that we haven’t seen in some time,” Griffin told the LCRA board.

Jacob Barker • 314-340-8291 @jacobbarker on Twitter jbarker@post-dispatch.com

Art museum tries to broaden audience MUSEUM • FROM B1

The museum has done “intercept research” on visitors’ experiences since 2012, but that wasn’t much more than talking to people already at the museum about their visits. The new effort, estimated to cost about $150,000, will go deeper and be more scientific, museum director Brent Benjamin said.

“We haven’t done nonvisitor polling on a regular basis ever,” Benjamin told the Board of Commissioners Monday.

Based on the research the museum has already done, it attracts nearly 500,000 visitors annually. About 32 percent of those visitors are ages 18-34, and adult visitors from households with children under 18 represent about 21 percent of visitors.

Black adults made up only about 8 percent of museum visitors between 2012 and 2016.

Moreover, the museum wants to know its position in the community and what kind of experience visitors are having, through polling and potentially focus groups. Using cellular data sold by private firms, they could even learn more about people who spend time near the museum but never visit.

“We want to how well is the museum perceived and then we want to learn how we might make a change,” said Alan McKeon of Atlanta-based consumer analysis firm Alexander Babbage.

The museum hired the firm to help leaders identify what they want to learn in such an undertaking. Now they’ll solicit bids for carrying out the project.

Museum leaders hope to begin putting a database together by later this year.

The St. Louis Art Museum is already in the midst of a digital overhaul leaders hope will at-

tract more visitors by offering wireless internet throughout the building and rehabbing its website to include more digital content on its collection that can be accessed while visitors look at exhibits.

Other local institutions have also done market research recently. One is the St. Louis Zoo, which recently hired locally based Market Probe Inc. to research perceptions of the zoo in the community.

About 58 percent of respondents surveyed by the consultant in 2016 mentioned the zoo first when asked about “familyoriented” attractions in the St. Louis area. About 14 percent of respondents answered with the St. Louis Art Museum after their first response, according to the study.

Mike Faulk • 314-340-8656 @mike_faulk on Twitter mfaulk@post-dispatch.com

BEST OF BUILDING BLOCKS Highlights from our real estate and development blog. STLtoday.com/ buildingblocks New event space opening in Shaw • A new event space is planned for the old Shaw Theatre at 3901 Shaw Boulevard.

Behind the plan is Newell Post LLC, led by Larry Newell and Laura Bunch. They presented a plan over a year ago proposing an event space called the Wild Carrot for weddings and other gatherings in the building.

The plan presented to the city’s Land Clearance for Redevelopment Authority Tuesday calls for 10-year tax abatement to support the $1.5 million rehab. The Newell Post group would buy the building and two adjacent empty lots from the city’s Land Reutilization Authority for $10,000. The lots would be used for parking and outdoor events.

Brent Crittenden, chief executive of the development and design firm UIC, representing Newell Post, told the LCRA board that the proposal had been vetted by neighbors and they supported the project. The new space would be used for everything from “morning

yoga classes to neighborhood meetings,” he said. (04.25) Apartment projects in historic schools get tax abatement help • School is out and apartments are on the way for three historic St. Louis school buildings that received a nod for tax abatement Tuesday.

The City’s Land Clearance for Redevelopment Authority heard three separate proposals to rehab old schools and recommended helping the developers complete the renovations with tax abatement. The proposals, which have previously been covered by the Post-Dispatch, are: • A plan from developers Kyle Miller and Chris Hulse to turn the former St. Pius School into 25 apartments. The building, on 3530 Utah Street in the Tower Grove East Neighborhood, was a former Catholic parish school and has been vacant for more than a decade. The LCRA approved a plan for 10-year tax abatement.

• Garcia Development’s $2.68 million plan to turn the Gratiot School at Hampton and Manchester avenues into 25 apartments. The LCRA gave the nod for 10-year tax

abatement, and developers also plan to use historic tax credits.

The former city school, built in 1873, used to house the district’s archives.

• Advantes Development’s $4.6 million plan to put 38 apartments into Sherman School on Flad Avenue in the Shaw Neighborhood.

The school, designed by William B. Ittner and built in 1898, was closed in 2013. The LCRA approved 10-year tax abatement for the project.

(04.25) The Gatesworth expanding assisted living operations • Luxury senior living community The Gatesworth is close to completing a $32 million expansion of the assisted living operations on its University City campus.

A new 90-unit apartment building, part of McKnight Place Assisted Living on the Gatesworth campus, is scheduled to open this fall. After that building’s completion, plans call for renovating the current McKnight Place Assisted Living building.

University City-based GateCo Development is serving as the general contractor for the project.

The Lawrence Group, of St. Louis, is the architect.

The Gatesworth is an independent, locally operated senior living community that offers independent living, assisted living and skilled nursing care. (04.25) 2 AT&T sky bridges to be demolished • AT&T plans to tear down two sky bridges linking its emptying 44-story downtown tower to other AT&T buildings the company will continue to use.

The telecom giant obtained a city demolition permit to remove the enclosed overhead links.

For decades, the bridges have allowed employees in One AT&T Center at 909 Chestnut Street to easily cross Ninth and 10th streets to the company’s buildings at 801 Chestnut and 1010 Pine Street, respectively.

An AT&T spokeswoman, Katie Nagus, said the company’s lease for One AT&T Center required it to get rid of the sky bridges, which extend from the tower’s fourth floor to the third floors of the neighboring buildings.

The demolition permit says the work will cost $420,000.

“It makes sense from an operational and security standpoint since we’ll no longer have employees in that center building” at 909 Chestnut, she said in an email.

The company announced in 2013 it would shift an estimated 2,000 workers from the tower into its other buildings downtown and elsewhere.

The last of the employees to relocate will be out by the time the lease expires in September, Nagus said. The building’s owner, MB St. Louis Chestnut Inc., will then try to find other tenants.

Nagus said the two sky bridges would close after May 1 and removal would begin sometime after that.

The bridge over 10th Street was installed about 1986, the year the 909 Chestnut tower opened. The other one was put in about 1991, Nagus said.

A third downtown AT&T sky bridge will remain in place. It connects 1010 Pine to an AT&T employee garage at 1126 Pine.

(04.21)

BUSINESS

04.28.2017 • Friday • M 1

Missouri lawmakers OK ban on project labor agreements

BY CELESTE BOTT St. Louis Post-Dispatch

JEFFERSON CITY • Missouri’s cit-

ies and counties could lose state funding if they force nonunion contractors to pay workers union wages for public projects, under a measure now headed to Gov. Eric Greitens’ desk.

Current law allows both union and nonunion contractors to bid on public construction projects.

But under a project labor agreement, local governments can require nonunion contractors to pay union wages, something Missouri Republicans call an unfair practice that discourages competition.

The legislation also would ban local governments from giving preferential treatment to union contractors. Governments that violate those provisions would lose state funding and tax credits for two years.

Greitens, a Republican, has listed the elimination of the agreements, or PLAs, among his labor reform priorities, which he says will persuade more businesses to set up shop in Missouri.

He already signed a “right to work” bill into law earlier this year, which prohibits unions from col-

Missouri Gov. Eric Greitens, seen here in February, plans to sign a bill eliminating Project Labor Agreements.

lecting dues as a condition of employment — a long-sought policy change for the Missouri GOP. “We must do away with expensive Project Labor Agreements that drive up the costs of construction and slow down important projects in our communities,” Greitens said in his State of the State speech in January.

Democrats maintain that PLAs ensure quality work and a tight budget on public projects such as the construction of schools, libraries or police stations.

Rep. Doug Beck, D-St. Louis,

said they allowed local entities “to use the most highly skilled workers available.”

The Missouri AFL-CIO argues that PLAs protect public investment by weeding out unqualified contractors and keeping projects on schedule, with fewer injured workers and no strikes or work disputes.

But opponents say that mandating union wages costs taxpayers more in the long run.

“The bill would leave it in the hands of the contractor, and as a result the contractor can choose the most cost-efficient way to get the job done,” said Brian Bunten, general counsel of the Missouri Chamber of Commerce, in a statement. “That’s a win for the contractor, a win for the employees chosen for the job, and it’s a win for Missouri taxpayers.”

Sponsoring Rep. Rob Vescovo, R-Arnold, said PLAs amounted to extortion for the 86 percent of the workforce that’s nonunion.

The PLA bill passed the Senate and was awarded final approval by the House on Thursday with a 10452 vote. The proposal will now head to the governor for his signature.

The legislation is SB 182.

The Associated Press contributed to this report.

Professor calls teacher pensions inequitable NICKLAUS • FROM B1

and school districts kick in a similar amount. Because the pension is based on those crucial last three years — rather than a careerlong average — the teacher who got bigger raises realizes a much greater return on those contributions.

The effect is easiest to see when teachers become administrators and make six-figure salaries. When a former Wentzville superintendent became acting head of the betterpaying Rockwood district in 2013, the Post-Dispatch reported that the one-year job would raise his annual pension by $20,000.

The career educator’s previous contributions weren’t enough to pay for that extra pension, but the money came from somewhere. That somewhere would be from everyone else who paid into the system.

If pensions were based on earnings over a 30-year career, rather than just the last three, Shuls calculates that the typical teacher’s pension in Belton, south of Kansas City, would rise by $4,300 a year. A typical Rockwood pension would fall by $11,500.

Half the students in Belton, but only 15 percent in Rockwood, qualify for free or reduced-price lunches.

Teachers and taxpayers in poorer districts are subsidizing benefits in the wealthier corners of the state, many of which are in the St. Louis area.

Even using the last five years of salary, rather than three, to calculate benefits would eliminate much of the subsidy, Shuls says.

Poorer districts’ lack of resources means they are always going to struggle with retention, but the pension system’s structure makes

TaskRabbit is part of the emerging gig economy TASK • FROM B1

company joke that it’s cheaper than marriage counseling.

“You can hire someone to do that task in an hour or wait three days and maybe your husband does it or not,” said Stacy Philpot, chief executive officer of TaskRabbit.

Lawn work or an impromptu Ikea purchase is not worth your happy home.

Philpot said that the company chose to expand to St. Louis because the community was perfectly poised for the service.

She said they judged a “successful opportunity” by looking at underemployment rates, desire of economic mobility, community use of technology and a steadfast population of middle-class families with two working parents or single working parent households.

“St. Louis checked all the boxes,” said Philpot, speaking from Palo Alto, Calif.

Although the company says that it sees itself as offering people employment that wouldn’t otherwise be available, the gig

that problem worse. It gives veteran teachers a strong incentive to jump to a better-paying district for the final years of their career.

Shuls’ latest study will appear this spring in the Journal of Education Finance. He has written about other issues with Missouri’s teacher pensions, including their growing cost and the risk they pose for taxpayers.

He favors replacing public pensions with a defined-contribution plan, similar to a 401(k).

Teacher groups have been united against such a move. If teachers in the poorer parts of Missouri realized how much they’re subsidizing their better-off brethren, they might change their minds — or at least begin asking for a fairer shake in the current plan.

David Nicklaus • 314-340-8213 @dnickbiz on Twitter dnicklaus@post-dispatch.com

economy industry continues to work through issues. Some balk at internet companies with little overhead accepting hefty fees (TaskRabbit charges 30 percent on top of what customers pay for services) to connect citizens without providing any economic protection for workers because they aren’t employees. Many cite the potential for exploitation as a prime concern, per examples with other successful but maligned gig economy virtual workplaces such as Uber.

“But we see ourselves primarily as providing jobs,” Philpot said. And, she notes, providing people seeking services a reliable pool of vetted independent contractors.

Ken Bronser said that he signed up to be a Tasker the same day he heard a radio program mentioning the service. At the time, it had not yet announced a launching date for St. Louis.

“I’m not sure if it was the app that appealed to me or the opportunity to be my own boss a little bit and not have to work all the time,” Bronser said. He was laid off from his previous position working 21 years doing IT for a computer networking company.

“They decided to go in a different direction,” Bronser said ominously, but he said that at least he got a nice severance to start anew at the age of 56.

ST. LOUIS POST-DISPATCH • B5

Old court building may become hotel HOTEL • FROM B1

rooms into a bar, install an indoor pool and revamp the systems of the century-old Beaux Arts style structure.

It had appeared to get caught up earlier this month in mounting concern over the city’s development incentive policies, which became a major issue during the recent mayoral campaign. The developers faced more pointed questions than usual at the last TIF Commission meeting, where a 2-1 vote with two abstentions failed to give the project the majority of TIF Commissioner support needed to advance.

By Thursday, much of the concern seemed to have subsided after commissioners received market studies on the demand for downtown hotel rooms and additional information on the minority hiring practices of the general contractor, Paric Corp.

“Just getting the information, the questions answered that I had asked before, just made me a little more comfortable with what we were providing,” Commissioner Christina Bennett, who voted against the proposal last time, said after Thursday’s meeting.

Still, the discussion Thursday ultimately turned to how the city uses development incentives. TIF allows increases in property and other taxes generated by new construction to be used for project costs, and a recent report estimated the value of TIF and tax abatement granted to St. Louis projects at some $700 million over the last 15 years.

Commissioner Douglass Petty, who represents the St. Louis Public Schools, pushed for more commission documents to be posted online and asked how the municipal courts project fit into the city’s overall plan.

Otis Williams, who heads city economic development office St. Louis Development Corp., assured commissioners the city was looking at its incentive policies and trying to fund a city-wide plan. But he also said this project fit into the city’s goal to build density and fill up vacant buildings. And hotels, he added, are an important component of the local economy.

“One of the things that makes this city hum is the tourism industry,” Williams said.

Developers, for their part, argued that the 1911 structure deserved the city subsidy because of the difficulty of working with the building’s courthouse footprint. Offices and retail probably wouldn’t work, making a hotel “the highest and most logical use of this property,” the developers’ attorney, Robert Preston of Spencer Fane, told the commission.

Preston attributed the commission’s hesitation to advance the proposal at its last meeting to a desire for more information. But he also acknowledged the debate on incentive use in the city, which he called “healthy.”

“Election cycles always bring some uncertainty and debate on key issues,” Preston told the Post-Dispatch.

Beyond the TIF, the $60 million project is counting on financing from state and federal historic tax credits, brownfield tax credits and an extra 2 percent in sales taxes from a Transportation Development District and Community Improvement District set up on site. About $4.9 million would come from developer equity and $20.9 million from a loan, or 43 percent of the costs.

Developers hope to start construction in August and open in the spring of 2019.

Now, he’s a part-time sales associate at a hardware company and as of Thursday, he’s a TaskRabbit contractor.

“Multiple income streams seems to be the thing to do these days,” Bronser said, noting that he’ll be testing the service out before he starts recommending it to friends who might also benefit from supplemental income.

As a two-sided marketplace, TaskRabbit supports both Taskers as independent contractors and their clients with a customer support team that acts as mediator when needed. But that’s another cause for concern considering the judge-and-jury implications.

TaskRabbit currently has an F rating with the Better Business Bureau. TaskRabbit responded to all the outstanding claims after the Post-Dispatch asked

about their BBB rating. The company said that last month it had an A rating and that after BBB processed their responses, an upgrade from failing could be immediate.

“Grades are weighted on size of the company, so the volume of an Uber (they have an “F”) or Amazon (they have an “A”) grade would be counterbalanced against the number of complaints,” explained Christopher L. Thetford, vice president of communications and marketing for the St. Louis BBB. Letter grades are based 85 percent on what consumers say, he said. Companies always have a chance to respond and “make a good faith effort” to resolve the conflict.

Debra D. Bass • 314-340-8236 @debrabass on Twitter dbass@post-dispatch.com

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BUSINESS

B6 • ST. LOUIS POST-DISPATCH

Southwest Airlines to stop overbooking REUTERS

Southwest Airlines Co., the dominant passenger airline serving St. Louis, said Thursday that it would stop overbooking its flights, a decision that comes in the wake of a worldwide backlash against larger rival United Airlines for dragging a passenger out of the plane earlier this month.

“Soon, we will no longer book a flight over capacity as part of the selling process,” a Southwest spokesman said.

Southwest, the No. 4 airline by passenger traffic, had the highest forced bumping rate among large U.S. carriers, taking nearly 15,000 passengers off flights last year, or 9.9 per 100,000 passengers, down slightly from 2015.

The carrier paid an average of $874 per bumped passenger, according to Transportation Department data.

In comparison, United was in the middle of the pack in terms of the rate at which it forces people to give up seats. It bumped 4.3 out of every 100,000 passengers and paid an average of $559 each per bumped passenger.

Southwest Chief Executive Gary Kelly told CNBC that the airline would be discontinuing the practice “very shortly.”

“I have made the decision, the company’s made the decision, that we will cease to overbook going forward. We’ve been taking steps over the last several years to prepare ourselves anyway,” Kelly told CNBC.

Starbucks celebrates success in Ferguson FERGUSON • FROM B1

where Starbucks planned to open its new store, had been looted and burned — and proprietors were left with huge losses.

And while Starbucks had a corporate history of taking on social issues, some questioned whether the chain’s decision to open in a city that had garnered international headlines would end up being a short-lived public-relations gesture.

Doubters can see for themselves on Saturday, when Starbucks marks the first anniversary of the opening of its store at 10768 West Florissant Avenue.

In the past year, much has changed in Ferguson.

The city appears to be attracting more investors in an area once plagued by racial tension. According to city officials, 41 businesses, including cafes, clothing retailers

M 1 • Friday • 04.28.2017

American Airlines workers get raises ASSOCIATED PRESS

FORT WORTH, TEXAS • American Airlines said Thursday that it was giving pay raises to its pilots and flight attendants, who have complained they are paid less than peers at other airlines. Wall Street wasn’t happy.

The raises come about two years before contract negotiations. Assuming they approve the increases, pilots and flight attendants will receive extra pay totaling close to $1 billion over three years.

At a time when American and other airlines are seeing higher costs for labor, fuel and maintenance while finding it difficult to raise airfares, this goodwill gesture didn’t sit well with investors.

“This is frustrating. Labor is being paid

and a bank branch, have come to the city since May 2016.

“While we can’t solely take credit for the coming of more business in Ferguson, we’re developing cultural support in business,” said Rodney Hines, director of Starbucks’ community investments.

The store has hired 23 employees with benefits ranging from health care to Starbucks College Achievement Plan, and in its first year it’s already in the top 25 percent of stores in food sales in the St. Louis area.

These are both long-term workers and new hires, said the chain, with half of its workforce coming from outside the Ferguson area.

“They are a blend of employees who have been transferred from other Starbucks stores and those locally hired,” Hines said. “This has been an opportunity to open ourselves to new customers in new communities.”

Cordell Lewis, manager of the Ferguson store, said the chain’s commitment was to hire individuals from the area.

“Our future plan is to continue to grow location and to show the area and Starbucks that we can maintain a sustainable environment,” he said.

Adrienne Lemons, 20, a Ferguson resident, has worked at the store since it opened.

Her greatest concern was that Starbucks might not connect with area residents.

Lemons, a nursing student at nearby St. Louis Community College at Florissant Valley, said: “Our store is kind of a symbol for Ferguson.”

“It helps us bring people together. Our job at Starbucks is to make our Ferguson community a happy place again.”

In a bid to promote local business, the coffee retailer is partnering with local minority and women-owned contractors.

Natalie DuBose, proprietor of Natalie’s Cakes and More, whose bake shop was vandalized by rioters during the 2014 protests, is among those the coffee retailer is partnering with.

She’s currently supplying her baked goods to more than 30 Starbucks locations in Missouri and two in Illinois.

Her bake shop, with 22 employees, has expanded by 700 square feet to include a kitchen and a retail area.

“Things are going well,” DuBose said.

first ... again. Shareholders get leftovers,” wrote Citi analyst Kevin Crissey in a note to clients. Investors showed their displeasure by sending American Airlines shares lower.

American closed Thursday at $43.98, down $2.42 per share.

Rising costs hit the bottom lines of all the major airlines in the first quarter.

American said Thursday that profit fell 67 percent. Earlier this month, United said earnings plunged 69 percent and Delta reported a drop of 36 percent. Southwest on Thursday said profit dropped 31 percent and its shares closed down 2.1 percent.

The higher expenses have alarmed investors because at the same time airlines have struggled to raise airfares.

Young people ages 16-21 are getting on-the-job training through Natalie’s Sweet Success, a program DuBose launched about nine months ago.

The cake proprietor has opened a second location at Chesterfield Mall.

“I’m excited about the future, and I’m hoping to get more Starbucks to sell cookies, cakes and brownies,” said DuBose, who is now married and recently gave birth to a boy.

Unlike other stores, the Ferguson Starbucks includes an on-site training center and space providing an additional hub for eating, events, conversations among members of the community and with the police, Hines said.

The coffee retailer has allowed other organizations to train young people in its space.

One of the organizations is the Urban League of Metropolitan St. Louis, which provides a curriculum on customer service.

“We help young people between the ages of 16 and 24 achieve skills they need through free and hands-on training,” said Monique Williams-Moore, project director at Urban League of Metropolitan St. Louis.

The training program has churned out 30 graduates since its launch in August 2016, and nearly all have found work locally.

Among topics apprentices are taken through are teamwork, understanding different customers, cash handling and telephone etiquette.

There’s also a full-day barista training in the four-week curriculum.

The initiative creates pathways of opportunites for employment for underserved communities, and graduates are having great luck with getting employment, Moore said.

Ferguson Mayor James Knowles III called Starbucks “a tremendous corporate citizen” that had helped spur economic development and create jobs.

The store, he said, has provided refreshments and volunteers for area events and produced branded items such as mugs that have helped foster local pride.

“Starbucks has created economic vibrancy, and hopefully we shall have more businesses,” Knowles said.

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