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S E RV I N G T H E P U B L I C S I N C E 1 878 • W I N N E R O F 1 8 P U L I TZ E R P R I Z E S

FRIDAY • 04.08.2016 • $1.50

SENATE ROLLS BACK CUTS

House budget had targeted UM system after last year’s protests $27.2 billion budget is based on a projected 4.1 percent growth in state revenue

BY KURT ERICKSON St. Louis Post-Dispatch

JEFFERSON CITY • The Missouri

$54.1 million for a 2 percent pay raise for state employees $5 million increase for K-12 transportation $4 million increase for the need-based scholarship Access Missouri No money for Planned Parenthood

Senate signed off on the major pieces of a $27.2 billion state budget Thursday, setting in motion a final push by Republican lawmakers to get the spending blueprint to Gov. Jay Nixon’s desk.

The plan, which would go into effect July 1, restores funding cuts made in the House that had been

WHAT’S NEXT

targeted at the University of Missouri system after last year’s protests on the Columbia campus.

And, it attempts to address rising costs of providing health care to poor Missourians, includes funds to give small raises to state workers and eliminates state funding for Planned Parenthood.

“Cooler heads prevailed,” Senate President Pro Tem Ron Richard

The Senate budget must be reconciled with the House version Lawmakers have until May 6 to complete budget

See BUDGET • Page A8

Jennings High School celebrates its in-house free medical clinic

A safe SPOT for students ‘I’m able to talk to somebody about my problems and get help with my chronic illness as well. It helps ... a lot to concentrate and focus on school.’

Payton Robinson Senior at Jennings High School

BY NANCY CAMBRIA St. Louis Post-Dispatch

JENNINGS • For many youths liv-

ing in poverty in Jennings, access to free health care and mental health services used to require a 10-mile journey to a row house in the Central West End called the SPOT. The free clinic, operated by the Washington University School of Medicine, connects at-risk youths, ages 13 to 24, with medical and behavioral health services. The SPOT, short for Supporting Positive Opportunities with Teens, also seeks to increase contraception use and reduce sexually transmitted diseases.

See SPOT • Page A6

Did Ballpark Village kill Harry’s?

Busches make counteroffer to buy Grant’s Farm ST. LOUIS • The four Busch family

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a n d m a n a ge r at the Market Street restaurant, blamed its death squarely ST. LOUIS • The on the sparkling demise of a ben ew co m p l ex loved downtown of sports bars, restaurant may restaurants and have had less nightclubs across to do with the the street from opening of the 122,000-squareROBERT COHEN • P-D Busch Stadium.

“It was 100 foot Ballpark Harry’s Restaurant & Bar, on Market Street, percent Ballpark Village enter- had been caught serving alcohol to minors.

Village,” Pieri retainment district — and more with underage drinking and peated this week. “When you’re doing years of dipping revenues, according to $18,000 on a Saturday and two weeks later, when they open up, you go down city records.

Not two months ago, an auction house to $3,000 — I’d say that would be a good sold off the last of Harry’s Restaurant & indicator.”

But Harry’s had bigger problems than Bar. Its white tablecloths, foie gras and Ballpark Village, according to records succession of top chefs had long disappeared. Still, Tim Pieri, co-owner See HARRY’S • Page A7

BY DAVID HUNN St. Louis PostDispatch

siblings who wanted to sell Grant’s Farm to the St. Louis Zoo have now offered to buy the rambling south St. Louis County animal park themselves, for $26 million.

The four — Beatrice Busch von Gontard, Peter Busch, Trudy Busch Valentine and Andrew D. Busch — say they won’t change the farm, and plan to run it “for generations to come.”

They believe their brother, Billy Busch, owner of William K. Busch Brewing Company, doesn’t have the means to run the park in perpetuity, as he has pitched, and would eventually sell to housing developers.

TODAY PARTLY CLOUDY

52°/41° MOSTLY SUNNY

WEATHER A16

BY STU DURANDO St. Louis Post-Dispatch

Lilian Mariita was listed as the winner of the 2015 Go! St. Louis women’s half marathon for nearly a year before her name vanished from the official results this week.

The deletion came long after the Kenyan runner disappeared from the U.S. racing circuit and returned to her home country in the village of Nyaramba.

Four days before running in St. Louis, Mariita had tested positive for a banned substance. She was notified immediately through an email to her agent and warned to stop competing, according to a story by The Associated Press.

See MARATHON • Page A7

Shop owner faces child porn charges

Heir it out

TOMORROW

Marathon here tries to weed out the cheaters

Restaurant had bigger problems, records suggest

BY DAVID HUNN St. Louis Post-Dispatch

See BUSCH • Page A8

CHRISTIAN GOODEN • cgooden@post-dispatch.com

Dr. Sarah Garwood (right), examines Payton Robinson, a senior at Jennings High School on Thursday during an appointment at the SPOT clinic in the high school. The SPOT is an on-site health center that caters to students’ physical and psychological needs.

Blues clinch home ice for 1st round

Americans are ‘numb’ to Zika alerts

SPORTS • C1

New film showcases St. Louis actors

POST-DISPATCH WEATHERBIRD ®

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Garcia, Martinez hope to fire up Cards

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1 IM • GO!

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ST. LOUIS POST-DISPATCH • A7

Marathon officials target cheaters GO! ST. LOUIS MARATHON AND HALF MARATHON ROUTES Union

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However, she continued to run and collect winnings until another positive drug test resulted in an eight-year ban from competition.

Mariita collected $1,500 from Go! St. Louis, which will hold its annual marathon and half marathon Sunday morning as part of its annual Family Fitness Weekend. But the organization wasn’t alerted to the situation until early this year.

“She came, ran and accepted prize money, knowing she’d been banned,” said Go! St. Louis president Nancy Lieberman.

Mariita is one of many runners from Kenya who have tested positive while competing at small events in the U.S. and Mexico.

Her agent, Larisa Mikhaylova, also has come under scrutiny for placing runners in events after they have failed tests, largely in Mexico. Mikhaylova said Thursday that’s where Mariita first tested positive and that she had no knowledge of that result.

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MARATHON ROUTE • Beginning at 12:01 a.m. Sunday rolling closures are planned along the race route.

They willMissouri continue along the route as the race Botanical progresses until about 3 p.m. Several interstate highwayGarden ramps will close for all or parts of the event, beginning at 5 a.m. They include: • Westbound 21st Street, Exit 39A TowerI-64 Groveat Park • Westbound I-64 at 3000 Market Street, Exit 38B • Westbound I-64 at Forest Park Parkway, Exit 38A • Eastbound Hwy. 40 at Market/Bernard, Exit 37A • Westbound I-44 at MLK/Riverfront, Exit 292A • Westbound I-44 at Broadway, Exit 292B

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ROAD CLOSINGS SITE PREP • Friday to Sunday, from 7 a.m. to noon, crews will block sections of Chestnut Street (from Tucker Boulevard to 17th Street); and 13th Street (from Market to Pine).

In addition, crews will block off much of 14th Street (from Market to Pine).

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Races begin at 7 a.m. on Sunday.

MARATHON WEEKEND What • Go! St. Louis Marathon and Family Fitness Weekend When • Saturday and Sunday Events • 5K walk/run, Saturday at 8 a.m. in Forest Park with other events to follow; Marathon, half marathon, marathon relay, Mississippi 7K run/walk, Sunday at 7 a.m. downtown

cause I’m not working with races in Mexico,” she said. “She came to my place and requested to run in the U.S. and didn’t say anything. I didn’t get any information about doping in Mexico. I got a document but it was so late — I think the end of April. That’s why I cannot say that Lilian is honest.”

Mikhaylova attempted to enter runners in this weekend’s St. Louis races, but she met with the same response she said she has received elsewhere.

“She asked us to accept two of her runners, and we declined,” Lieberman said. “It is certainly an issue of trust on our part, knowing she knew and sent her

athlete anyway. Other races in the United States are now familiar with this person. Word like this spreads quickly through the community.”

Word of Mariita’s tainted win was another odd twist for the 2015 St. Louis races. Days after the April races, it was discovered that Kendall Schler had cheated to win the women’s marathon by running only the start and finish of the race.

Discrepancies in her performance were discovered on site, and she didn’t collect the winner’s share. Andrea Karl was named the winner and awarded $1,500.

When Mariita was stripped of her title, Krista Arnold of Edwardsville moved to second place and Hilary Orf of Ballwin slipped into third, albeit too late to collect their deserved winnings.

“It’s an affront to all runners and people who train hard and play by the rules,” Lieberman said. “How dare they mar the running industry because of what they’ve done. Of the people who run, 99.5 percent are com-

mon people who work hard and train and that medal is so important.”

Kenya is one of three countries that has been placed on a watch list by the International Association of Athletics Federations for issues related to doping. If improvements are not made, the country risks longer-term penalties.

Lieberman said Kenyan runners will compete in this year’s races. The events include participants from 13 countries and 48 states. She said the concern is not for Kenyan runners specifically, but cheating in general.

Go! St. Louis reviews the list of banned athletes listed on the IAAF website before races. However, she said there is always a three- to four-month delay between a positive test and the ban being posted, which was the case with Mariita.

“Sometimes the lack of timeliness effects an event,” she said.

“There’s no way we could have known at that time because it was so new.”

Mariita was finally caught at

a race in Frankfort, Ky., in July 2015 after finishing second at the Great Buffalo Chase 5K. The U.S. Anti-Doping Agency was on hand because of a tip.

She tested positive, but not before running in nine races last year, according to the AP story.

She used the money she earned to build a home in her village, and Mikhaylova had collected 15 percent of the winnings from Mariita and other runners.

Mariita returned home to what the AP described as a “muddy tea-plantation village,” where she cares for her 2-year-old daughter, who was born in Kentucky. She reportedly earned $24,000 in the U.S. in 2014 alone.

Now, her career running in the states to support life back home appears to have ended.

“I used to rely on this for money,” she told a reporter, “and I don’t know what is left for me.”

Stu Durando @studurando on Twitter sdurando@post-dispatch.com

Years of problems at Harry’s piled up, records say HARRY’S • FROM A1

kept by the city’s excise division, which monitors liquor licenses.

Sales had dropped precipitously. And then, last year, liquor control agents twice caught Harry’s serving minors — including at a 900-student Washington University event.

On Jan. 5, Harry’s co-owner Harry Belli — the restaurant’s namesake — signed a settlement with the excise division to close the restaurant.

Two weeks later, however, Pieri blamed Harry’s collapse on the market.

“Downtown is just a dead area right now, unfortunately,” he told the Post-Dispatch then. “Obviously, the sad part is nobody is talking about it. Iconic places are going out of business, and nobody cares.”

The perception and vitality of downtown St. Louis is of particular importance now. The federal government has just committed to building a $1.7 billion compound — two miles north of downtown — for its National Geospatial-Intelligence Agency.

City leaders are banking on the ultra-high-tech facility attracting a workforce of millennials who want an urban lifestyle.

They’re betting that such an investment will revitalize not only the city’s near north side, but its Washington Avenue downtown core, too.

And yet a stubborn spike in crime is frustrating city officials.

Bars and restaurants are indeed closing — Joe Buck’s closed in October; the Dubliner in November; Prime 1000 in December; Harry’s and Mike Shannon’s Steaks & Seafood at the end of January.

But few, outside of Pieri, blame Ballpark Village entirely.

“I had 30 years downtown,” said Shannon’s owner, Mike Shannon. “I decided to go out on top. It has nothing to do with Ballpark Village.”

STEAKHOUSES, MILLENNIALS Shannon said the entertainment district’s opening hurt business at his outdoor patio bar

but brought traffic to the steakhouse.

And customers quickly returned outdoors, he continued.

Now he’s renting the patio to his grandson, Justin VanMatre, who, with business partners, is opening a similar game-day bar outside. VanMatre promises local fare and isn’t worried about Ballpark Village.

Seamus McGowan, who owns several bars on Washington Avenue with his brothers, said Ballpark Village’s first season was hard. “It definitely took a toll, when something that large opens,” he said. But losses varied. Flannery’s Pub, a sports bar, might have lost 20 percent of its business initially, he said.

Rosalita’s Cantina, a Mexican restaurant, barely felt a thing.

“Everybody wanted to go check it out, and, over the first few months, it had a dramatic impact,” he said. “We’re back to pre-Ballpark Village levels.”

Downtown is, as a whole, gaining bars and restaurants, not losing them, said Missy Kelley, president and chief executive of the downtown booster a n d d eve l o p m e n t a ge n cy Downtown STL. Ninety-nine have opened since the end of 2013, Kelley said; 40 have closed. Ballpark Village opened at the end of March 2014, and Kelley said it’s adding business, not taking it away.

Ballpark Village is jointly owned by the Cardinals and the Cordish Cos. Jim Watry, chief operating officer there, said they spent $1.8 million on marketing last year. They met with a national bus tour association.

“We’re working to bring people from a larger geographical region than the city,” he said, “and to make downtown busy on non-game days.”

Places such as Shannon’s and Harry’s were classics, Kelley said. But millennials, she said, “are probably not going to go to a steakhouse.”

“I think it’s really easy to point to something that’s new and successful when a concept that worked for a very long time doesn’t work anymore,” Kel-

ley said. “I’m not sure if anyone went to Harry’s for food anymore.”

‘WE HUNG ON’ Harry’s was clearly struggling, according to excise division files. Food and drink sales steadily dropped from $2.3 million in 2008 to $1.3 million in 2014, the most recent year available.

The restaurant added a nightclub and underage nights. Then, late one night last summer, nine liquor control and police officers raided Harry’s.

Pieri, the co-owner, had contracted to host a Washington University event. He expected 200 students; 900 showed up, according to the city report.

The officers quickly busted five minors for underage drinking, the report said. Several had recognizably fake identification, from Oklahoma, Connecticut or New York.

One student presented a Rhode Island license. When agent Adam Shook told him it was fake, the student tried to hand him a business card and said, “My uncle is a police officer,” according to the report.

“He said that if I run into any trouble, I should give you this.”

Shook issued the student a summons. Other students, now aware of the liquor control agents, fled the restaurant, the report said. Within 20 minutes, there were 100 customers left.

In January, Harry’s attorney, John Bouhasin, brokered a settlement with the city. The city agreed to reduce a $3,000 fine to $500. The restaurant agreed to close.

Pieri said earlier this week that Harry’s was on its last ropes. “We hung on as long as we could,” he said. “It was time.”

But he insisted: “You can keep asking the same question. I’m telling you, it was 100 percent Ballpark Village.”

David Hunn • 314-340-8121 @davidhunn on Twitter dhunn@post-dispatch.com

PHOTO BY KATHERINE BISH

Food and drink sales at Harry’s downtown had steadily declined.

HARRY’S RESTAURANT & BAR YEARLY SALES $2.5 million

$2 million

$1.5 million

$1 million

$1.3 million $500,000

’08

’09

’10

’11

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SOURCE: St. Louis Excise Division | Post-Dispatch

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 • 04.08.2016 • B

HOUSING BACK ON TRACK ‘Crazy busy’ • Brokers here relish the rebound Sellers’ market • Heavy demand raises prices

BY TIM BRYANT St. Louis Post-Dispatch

Multiple offers. First-day-onthe-market sales for over the asking price. A jump in the number of transactions.

That’s a snapshot of the local housing market.

Through the first three months of the year, the number of homes sold in St. Louis and St. Charles

counties, plus St. Louis, was up 8 percent — to 4,768 — from 4,405 in the first quarter of 2015, according to the Mid America Regional Information Systems. The quarterly figure is preliminary.

In addition, the 4,402 homes and condos under contract indicate the likelihood of strong sales this month, given that 2,179 residences sold last April.

“We are crazy busy with sales

and as I can see and hear, so is everyone else,” said Bob Bax, a broker and co-owner of Berkshire Hathaway HomeServices in St. Louis.

Some examples: • A house in Ladue hit the market last month at $1.275 million and within a day had two offers. It sold for higher than the asking price.

See HOUSING • Page B5

PHOTO BY ROBERTO RODRIGUEZ

The Politte family of Fenton, including Matt (right), Katrina and their children, and their real estate agent Pamela Higginbotham Tvedt of Town and Country visit a home for sale Sunday in Webster Groves.

New spin on the bottle

Summers details what’s ailing us Ex-Treasury chief espouses theory of secular stagnation DAVID NICKLAUS St. Louis Post-Dispatch

Among celebrity economists, no one is more of a downer than Lawrence Summers.

The former Treasury secretary is a leading exponent of secular stagnation theory, which says the world is stuck in a slowgrowth rut because of inadequate demand. On Wednesday, he brought that downbeat message to the Federal Reserve Bank of St. Louis.

Summers set the tone with a chart comparing the Great PHOTOS BY DAVID CARSON • dcarson@post-dispatch.com

Freshly washed aluminum bottles move along the conveyor line Thursday at in the new expansion of Metal Container Corp. in Arnold.

A-B places bigger bet on resealable aluminum bottles

Transmission line requests get different reception

BY LISA BROWN St. Louis Post-Dispatch

Buoyed by a 30 percent jump in resealable aluminum bottle sales last year, AnheuserBusch is investing more resources to expand Bud Light and Budweiser aluminum bottle production in the U.S. St. Louis-based Anheuser-Busch, the U.S. unit of Belgium-based A-B InBev, just completed construction on its $160 million expansion of its Metal Container Corp. facility in Arnold that doubles production capacity to 1 billion aluminum bottles annually.

The brewer plans to hold a ceremony Friday for its 100,000-square-foot expansion in Arnold, 17 miles south of A-B’s St. Louis brewery. With the expansion, the facility now totals 480,000 square feet of manufacturing space. Including 70 new hires to staff the expansion, the Arnold plant has grown to 300 employees, with two 12-hour shifts running around the clock.

A-B’s Metal Container Corp. subsidiary operates five can plants and two lid plants nationwide, and Arnold is its largest. In addition to beer packaging, Metal Container Corp. makes cans and lids for PepsiCo and Monster Beverage Corp.

See BOTTLES • Page B4

See NICKLAUS • Page B4

Rolls of aluminum are fed into the start of the conveyor line Thursday at the Metal Container Corp. plant in Arnold.

Mike Williamson puts ink in a machine that applies the printing to aluminum bottles at Metal Container Corp.

BY JACOB BARKER St. Louis Post-Dispatch

Two transmission line projects that promoters say are needed to connect wind generation to the electric grid could get different treatment from Missouri regulators.

Both are proposals to expand transmission infrastructure in order to prepare for coal power plant retirements and the growth of renewable energy. Both projects have spurred loud opposition from farmers and rural landowners along the routes who don’t want to sell easements for unsightly and inconvenient transmission line poles.

But the projects have come from very different companies.

One is from a traditional utility company: St. Louis-based Freshly printed aluminum bottles at Metal Container Corp. on Thursday.

See POWER • Page B4

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B2 • ST. LOUIS POST-DISPATCH

M 1 • Friday • 04.08.2016

Improvements in works at Atlanta airport will take flight under leadership of HOK HOK is leading a team designing a $200 million improvement to the domestic passenger terminal at the Hartsfield-Jackson Atlanta International Airport.

Construction will begin later this year and include the addition of two large canopies over curbside pickup and drop-off areas and a redesigned central atrium space.

The changes are part of a $6 billion, 20-year expansion and modernization program at the airport. Improvements to concourses, hospitality and retail services, runways, cargo, parking and support facilities are also planned.

The HOK-led joint venture includes Stanley, Love-Stanley PC and Chasm Architecture LLC, both headquartered in Atlanta.

The HOK St. Louis office is leading a joint venture team that is designing a $200 improvement at the Hartsfield-Jackson Atlanta International Airport’s domestic passenger terminal.

IN THE LAB: ROUNDUP OF RESEARCH GRANTS Following is a list of some of the medical research grants awarded to scientists in the area.

ST. LOUIS UNIVERSITY SCHOOL OF MEDICINE Scientist • Dr. Ajay Jain, assistant professor of pediatrics Grant • $703,620 from the National Institutes of Diabetes and Digestive and Kidney Diseases Study • Studying the role of bile acid activated receptors FXR and TGR5 in parenteral nutrition (PN)-associated hepatic and gut disease.

PEOPLE IN BUSINESS

Winter named senior VP at NewGround Jeffrey Winter was named senior vice president of business development at NewGround.

In his new role, Winter will lead national sales and marketing ef- Winter forts for the design/ build firm.

Most recently, Winter served as senior vice president of sales and marketing for IPC Healthcare/TeamHealth. Previously, he served senior management positions at Correctional Medical Services Inc./Corizon Health and KPMG. Winter earned his bachelor’s degree in economics, business administration from Westminster College and his MBA in finance from Webster University.

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WASHINGTON UNIVERSITY SCHOOL OF MEDICINE Scientist • Dr. Nathan Stitziel, assistant professor of medicine and of genetics Grant • $3.2 million, National Heart, Lung, and Blood Institute Project • Using a human genetics approach to evaluate the likelihood that ANGPTL3 inhibitors will successfully reduce the risk of heart attack in addition to their cholesterol-lowering effects.

Scientist • Andrey Anokhin, associate for psychiatry Grant • $3 million, Eunice Kennedy Shriver National Institute of Child Health & Human Development Project • Investigating adolescent brain development using modern neuroimaging methods to assess developmental trajectories of different brain regions such as those involved in reward and thrill seeking and those in charge of inhibitory control and willpower.

Scientists • Dr. Jay Keener, associate professor of orthopaedic surgery, Dr. Sharlene Teefey, professor of radiology, and Dr. Ken Yamaguchi, professor of orthopaedic surgery Grant • $2.1 million, National Institute of Arthritis and Musculoskeletal and Skin Diseases Project • Studying why some age-related rotator cuff tears develop and become painful over time.

Scientist • David DeNardo, assistant professor of medicine and of pathology and immunology Grant • $1.7 million, National Cancer Institute Project • Testing whether inhibiting a protein called focal adhesion kinase can improve responses to immune therapy against pancreatic cancer.

Scientists • Sarah England, professor of obstetrics and gynecology, professor of medicine and professor of cell biology and physiology, and Dr. Celia Santi, assistant professor of neuroscience Grant • $1.5 million from the Eunice Kennedy Shriver National Institute of Child Health & Human Development Project • Investigating how oxytocin elicits changes in uterine contractions during pregnancy in order to better understand both its risks and benefits.

Scientist • Zhoufeng Chen, professor of anesthesiology, developmental biology and psychiatry Grant • $1.4 million, National Institute of Arthritis and Musculoskeletal and Skin Diseases Project • Studying the intractable disease of chronic itch, which is resistant to antihistamine treatments Scientist • Aimee James, associate professor of surgery Grant • $1.1 million, National Institute on Minority Health and Health Disparities Project • Working with patients and providers to discuss how patients cope with the high cost of medications and medical procedures in order to develop a pilot intervention to reduce the frequency with which patients skip or delay medications or medical care.

Scientist • Kenneth Schechtman, associate professor of biostatistics and medicine Grant • $669,166 from the National Heart, Lung, and Blood Institute Project • Enlisting family medical practices in four cities to recruit 528 families with an obese 6- to 12-year-old child in order to test the weight-loss effectiveness of family-based therapy that will be implemented at the family practices.

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Rebecca Welker was promoted to senior vice president at CHAN Healthcare.

Amplified Digital hired Tom Meehan as a senior digital marketing manager and Nicole Starzyk as a digital marketing manager.

Switch promoted Gregg Eilers to vice president of business meetings and live events.

Safety National Casualty Corp. appointed Steve Divine as senior vice president of finance.

Infoplus Commerce hired Garret Richardson as vice president of client solutions.

Nature’s Variety appointed Matt West as chief financial officer.

Suresh Rudrappa joined RE/MAX Results.

Cameron Welch joined McGrath and Associates as a project engineer.

HOK added Eugene Tucker as a staff attorney.

CBRE Group Inc. promoted Brian Bush to vice president.

Jerry Luna was promoted to vice president, quality and technical services, at Precoat Metals.

Sean Oliver was hired as talent acquisition manager at Alliance Technologies LLC. David Helms was named managing partner of the new St. Louis office of German May PC, formerly Rouse Hendricks German May. UMB Bank hired Tracy Howren as vice president, commercial real estate lending officer.

BUSINESS CALENDAR TUESDAY DEMOGRAPHICS • Olin Business School’s Executive MBA program hosts this presentation and panel discussion on using the Census Business Builder.

• 7:15 a.m. — 9 a.m. (breakfast followed by presentation), Washington University, Charles F. Knight Executive Education Center, Room 200, St. Louis • Free, but register at bit.ly/1Me0QEJ TUESDAY LEADERSHIP • St. Louis chapter of Commercial Real Estate Women holds panel discussion on activating leadership potential.

• 11:30 a.m. — 1 p.m., Sqwires Annex, 1415

South 18th Street, St. Louis •$30, members; $40, guests. Register: www. crewstl.org WEDNESDAY EMAIL • SCORE presents this workshop on successful email marketing campaigns.

• 5:30 p.m. — 8:30 p.m., RESPONSE! Targeted Marketing, 1800 Lafayette Avenue, St. Louis • $35, prepaid. Register: www.stlscore.org or 314-539-6602 APRIL 20 SOCIAL MEDIA • Selsius Corporate and Career Training offers this workshop on social media strategies for small businesses.

POST-DISPATCH BUSINESS STAFF ROLAND KLOSE

Business editor

314-340-8128

GREGORY CANCELADA

Assistant business editor

314-340-8330

JACOB BARKER

Energy and environment

314-340-8291

LISA BROWN

Retail, consumer products and marketing

314-340-8127

TIM BRYANT

Real estate and construction

314-340-8206

JIM GALLAGHER

Personal finance and corporate affairs

314-340-8390

SAMANTHA LISS

Business of health

314-340-8017

DAVID NICKLAUS

Business columnist

314-340-8213

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

SUBMIT AN ITEM Bulletin Board and People in Business submissions should be sent to: biznetworking@ post-dispatch.com.

Or you can mail a release to: Business News, 900 NorthTucker Boulevard, St. Louis, Mo. 63101

• 9 a.m. — 4 p.m., Southwestern Illinois College, 2500 Carlyle Avenue, Belleville, Ill. • $75; register by April 13: 618-222-5688 or selsiustraining.com.

ARCH GROUNDS • The St. Louis chapter of the International Facility Management Association hosts this program and building tour of the Gateway Arch grounds redevelopment.

• 5 p.m. — 7 p.m., The Laclede Group, 700 Market Street, St. Louis 63101 • Free, members; $35, nonmembers. Register

by April 13 at bit.ly/1N8Rwgr

THE BOTTOM LINE Though the local jobless rate is under 5 percent, Jim Gallagher and David Nicklaus talk about why people are stilll struggling. stltoday.com/ watch

Stocks slumped broadly Thursday, giving the Standard & Poor’s 500 index its biggest decline in six weeks. Stocks have gradually lost momentum over the last few weeks after a furious rally that wiped out most of their losses from early 2016.

MARKET WATCH

04.08.2016 • Friday • M 1

$55

sales in its third quarter. $50

$170

50

160

45

MARKET WATCH 40 J F M 52-week range

$38.06

45

150 A

$54.49

140

40

J

$139.05

ST. LOUIS 35POST-DISPATCH • B3

F M A 52-week range $218.77

J

$35.98

F M A 52-week range $46.64

TRACK AND GET LATEST NEWS • STLTODAY.COM/BUSINESS .com Vol.: 23.1m (1.3xTHE avg.)NEWS PE: 11.9• STLTODAY.COM TRACK YOUR YOUR STOCKSSTOCKS AND GET THE LATEST Vol.: 4.8m (1.0x avg.) /BUSINESS PE: 12.4 Vol.: 4.9m (1.6x avg.)

Stocks slumped broadly Thursday, giving the Standard & Poor’s 500 index its biggest decline in six weeks. Stocks have gradually lost momentum over the last few weeks after a furious rally that wiped out most of their losses from early 2016.

Verizon Communications VZ Close: $52.00 -1.52 or -2.8% Telecommunications companies lagged the market for the second day in a row.

(-1.2%)

M

A

Yield: 1.7%

Goldman Sachs

GS

ConAgra Foods

CAG

Close: $150.41 -4.78 or -3.1% Banks were among the worst-performing sectors of the market Thursday.

J

$38.06

F M A 52-week range $54.49

Vol.: 23.1m (1.3x avg.)

PE: 11.9 Mkt. Cap: $212.16 b Yield: 4.3%

140 $139.05

Close: $46.09 0.66 or 1.5% The maker of Chef Boyardee canned pasta and Hebrew National hot dogs reported strong profit and sales in its third quarter. $50 45

150

45

Close: $52.00 -1.52 or -2.8% Charts show stocks that made the news yesterday.

Telecommunications companies lagged the market for the second day in a row.

Mkt. Cap: $63.53 b

160

50

Verizon Communications VZ

Yield: 4.3%

$170

$55

40

Mkt. Cap: $212.16 b

J

F M A 52-week range $218.77

Vol.: 4.8m (1.0x avg.)

PE: 12.4 Mkt. Cap: $63.53 b Yield: 1.7%

PE: ...

Yield: 2.2%

Hanesbrands

HBI

Close: $27.87 0.77 or 2.8% The maker of underwear, t-shirts and socks said it will buy Champion Europe. $35 30

40 35

Mkt. Cap: $20.01 b

25 J

$35.98

F M A 52-week range $46.64

Vol.: 4.9m (1.6x avg.)

PE: ...

Mkt. Cap: $20.01 b Yield: 2.2%

20

J

$23.25

F M A 52-week range $34.78

Vol.: 6.0m (1.5x avg.)

PE: 26.2 Mkt. Cap: $10.81 b Yield: 1.6%

ConAgra Foods

CAG Hanesbrands HBI Wynn Resorts WYN Close: $46.09 0.66 or 1.5% Close: $27.87 0.77 or 2.8% ExchangeRates Close: $74.85 -0.65 or -0.9% Futures Close: $150.41 2,080 -4.78 or -3.1% 17,840 17,840 S&P 500 Dow Jones industrials Dow Jones industrials The maker of Chef Boyardee The maker The hotel and casino company proCHICAGO BOT DATEof underwear, CLOSE t-shirts CHG Banks were among the worst-per$55 Close: pasta 2,041.91 17,541.96 FOREIGN CURRENCY IN DOLLARS Close: 17,541.96 forming sectors of canned and Hebrew National and socks said it willClose: buy Champion posed a new development in Las the market 17,600 2,040 17,600 CLOSE PREV Corn May 16 361.50 +3.50 hot dogs reported profit and Europe.

Vegas.

Change: -24.75 strong (-1.2%) Change: -174.09 (-1.0%) Change: -174.09 (-1.0%) Thursday.

50 sales in its third quarter.

Argentina .0692 .0684 Soybeans May 16 904.50 -3.50 17,360 2,000 17,360 10 DAYS 10 DAYS 10 DAYS $50 45 $90 Australia .7506 .7596 $170 Wheat $35 May 16 457 -6 2,160 18,000 18,000 Brazil .2708 .2744 45 30 80 160 40 CHICAGO MERC DATE CLOSE CHG J F M A Britain 70 1.4060 1.4127 40 25 2,080 17,500 17,500 150 Feeder cattle Apr 16 154.15 +.98 52-week range Canada .7604 .7630 35 20 60 140 $38.06 $54.49 Apr 16 132.42 J F M A J F M +.35A J F M .1543 A J F M A 2,000 China 17,000Live cattle .1548 17,000 52-week range 52-week range 52-week range 52-week range Hogs Apr 16 67.12 -.38 Vol.: 23.1m (1.3x avg.)

PE: 11.9 Euro 1.1377 1.1410 $35.98 $46.64 $23.25 $34.78 $60.59 $92.00 $139.05 $218.77 16,500Milk 1,920 Mkt. Cap: $212.16 b Yield: 4.3% 16,500 Apr 16 13.72 +.02 India .0150 .0150 Vol.: 4.9m (1.6x avg.)

PE: ...

Vol.: 6.0m (1.5x avg.)

PE: 26.2 Vol.: 1.4m (0.9x avg.)

PE: 14.6 Vol.: 4.8m (1.0x avg.)

PE: 12.4 Copper Mkt. Cap: Apr 16 207.45 -6.60 Israel Mkt. Cap: $8.39.2637 .2635 Mkt. Cap: $20.01 b Yield: 2.2% $10.81 b Yield: 1.6% b Yield: 2.7% Mkt. Cap: $63.53 b Yield: 1.7% 1,840 16,000 16,000 Goldman Sachs GS Japan .009239 .009123 ICE DATE CLOSE CHG Close: $150.41 -4.78 or -3.1% Hanesbrands HBI Wynn Resorts WYN Mexico Costco Wholesale COST ConAgra Foods CAG .055796 .056657 1,760 15,500 15,500 Cotton +.28 O N D Close: J $27.87F 0.77 or M 2.8%A O N May 16 59.03 D J F M A O N J F M A Banks were among theDworst-perClose: $74.85 -0.65 or -0.9% -4.74 or -3.0%.0147 Russia Close: $152.03 .0147 Close: $46.09 0.66 or 1.5% forming sectors of the market Coffee The hotel May 16 119.80 -1.70 The maker of underwear, t-shirts and casino company proThe wholesale .0656 club company re-.0659 The maker of Chef Boyardee So. Africa HIGH LOW CLOSE CHG. %CHG. WK MO QTR YTD and socks said it will buy Champion Sugar posed aMay 16 27.50 Thursday. new development in Las ported its sales for March. canned pasta and Hebrew National -.40 So. Korea .000861 .000864 Europe.

Vegas. hot dogs reported strong profit and DOW 17687.28 17484.23 17541.96 -174.09 -0.98% t s s +0.67% Switzerland 1.0465 1.0468 sales in its7623.89 third quarter. 7652.83 -101.05 -1.30% t s s +1.92% DOW Trans.

7724.43 $170 DATE CLOSE CHG NEW YORK NYSE NASD $35 t s s +13.61% $90 $160 $50 660.24 654.61 656.44 +0.28 +0.04% DOW Util.

Crude oil May 16 37.26 -.49 160 PreciousMetals 1,824 Vol. (in mil.) 3,639 NYSE Comp.

10117.16 10004.77 10045.15 -114.70 -1.13% t s s -0.97% 30 80 45 Gas blend May 16 1.3812 -.0135 150 1,702 Pvs. Volume 3,650 NASDAQ 4901.49 4831.49 4848.37 -72.35 -1.47% t s s -3.18% CHG NEW YORK CLOSE 150 25 70 40 Advanced 708 742 2063.01 2033.80 2041.91 -24.75 -1.20% t s s -0.10% S&P 500 Heating oil May 16 112.57 -1.46 Gold 1236.20 +13.70 20 t s s +1.41% 140 60 Declined 2378 2046 140 1433.04 1411.12 1418.34 -18.44 -1.28% 35 J F M A Natural gas J F M A May 16 2.018 +.107 J F M S&P 400 A J F M A J F M A Silver 15.16 +.11 New Highs 76 27 s s -0.72% Wilshire 5000 21178.36 20927.61 21014.61 -249.67 -1.17% t 52-week range 52-week range 52-week range 52-week range 52-week range New Lows 15 29 Russell 2000 1107.89 1088.56 1092.79 -16.02 -1.44% t s s -3.79% Platinum 953.80 +10.90 Chicago BOT is in cents. $23.25 $34.78 $60.59 $92.00 $117.03 $169.73 $35.98 $46.64 $139.05 $218.77 Vol.: 6.0m (1.5x avg.)

PE: 26.2 Vol.: 1.4m (0.9x avg.)

PE: 14.6 Vol.: 4.0m (1.6x avg.)

PE: 29.1 Vol.: 4.9m (1.6x avg.)

PE: ...

NET 1YR Vol.: 4.8m (1.0x avg.)

PE: 12.4 Interestrates Mkt. Cap: $10.81 b Yield: 1.6% Mkt. Cap: $8.39 b Interestrates Yield: 2.7% Mkt. Cap: $66.75 b Yield: 1.1% Mkt. Cap: $20.01 b Yield: 2.2% TREASURIES LAST CHG AGO Mkt. Cap: $63.53 b Yield: 1.7% 52-WK YTD% 1YR% 52-WK YTD% 1YR% NAME TKR LO HI CLOSE CHG %CHG CHG RTN P/E DIV NAME TKR LO HI CLOSE CHG %CHG CHG RTN P/E DIV SOURCE: Sungard AP Wynn Resorts WYN Costco Wholesale COST Hanesbrands HBI 3-month T-bill .20 -0.01 .02 ConAgra Foods CAG Close: $74.85 -0.658.51 or -0.9% Close: -4.74 or -3.0% Close: $27.87 17 0.77 or Aegion AEGN 15.97 22.41 20.45 -.13 -0.6 +5.9 +12.0 ... 2.8% LMI Aerospace LMIA 8.06 12.61 +.03 +0.4 -15.5 -30.5 dd $152.03 ...

6-month T-bill .25 -0.01 .09 The hotel and casino company proThe wholesale club company reThe maker of underwear, t-shirts Close: $46.09 0.66 or 1.5% 52-wk T-bill .52 -0.02 .21 posed a new development in Las ported its sales for March.

Allied Health AHPI 0.63 1.85 .63 -.02 -3.1 -43.6 -62.4 dd ... and socks said it will buy Champion Laclede Group LG 49.66 68.79 66.55 +.30 +0.5 +12.0 +30.2 21 1.96f The maker of Chef Boyardee 2-year T-note .71 -0.03 .54 Vegas.

Europe. canned pasta and Hebrew National DOX 50.06 61.46 57.90 -1.15 -1.9 +6.1 +11.3 20 0.78f Amdocs The yield on the 5-year T-note 1.14 -0.06 1.35 Lee Ent LEE 1.15 3.55 1.72 -.04 -2.3 +2.4 -45.7 4 ... hot dogs reported strong profit and $90 $160 10-year Treasury $35 10-year T-note 1.69 -0.07 1.91 Ameren AEE 37.26 51.06 49.16 -.39 -0.8 +13.7 +20.7 19 1.70 sales in its third quarter. fell to 1.69 per80 50.90 132.60 64.26 -.97 -1.5 -13.9 -47.4 ...

Mallinckrodt MNK 30-year T-bond 2.52 -0.06 2.53 30 $50 150 cent Thursday.

American Railcar ARII 33.02 60.42 39.74 -.65 -1.6 -14.1 -17.3 7 1.60 70 25 Yields affect Monsanto Co MON 81.22 123.82 86.10 -.90 -1.0 -12.6 -23.9 24 2.16 45 Belden Inc BDC 36.51 95.56 61.45 -.67 -1.1 +28.9 -34.0 31 0.20 60 140 20 rates on M mort- A J F M A J F J F M A 40 gages OLN 12.29 32.56 16.93 NET 1YR 52-week range -.22 -1.3 -1.9 -43.6 15 0.8052-week rangeand other Build-A-Bear Wkshp BBW 10.74 21.69 12.31 -.28 -2.2 +0.6 -36.4 11 range ... Olin 52-week consumer$169.73 loans. $60.59 $92.00 BONDS LAST CHG AGO $117.03 35 $23.25 $34.78 J F M A PNRA 162.07 220.44 210.30 -.81 14.6 -0.4 +8.0 +28.2 36 ...

Caleres CAL 23.22 33.83 25.68 -.90 -3.4 -4.3 -15.9 13 0.28 Panera Bread Vol.: 1.4m (0.9x avg.)

PE: Vol.: 4.0m (1.6x avg.)

PE: 29.1 Vol.: 6.0m (1.5x avg.)

PE: 26.2 52-week range Barclays LongT-BdIdx 2.29 -0.06 2.39 Mkt. Cap: $8.39 b Yield: 2.7% Mkt. Cap: $66.75 b Yield: 1.1% Mkt. Cap: $10.81 b Yield: 1.6% CassInfo CASS 43.78 59.09 49.26 -1.13 -2.2 -4.3 -7.6 25 0.88 $35.98 $46.64 PeabdyE rs BTU 2.00 84.00 2.10 -.15 -6.7 -72.7 -97.0 dd ...

Bond Buyer Muni Idx 3.94 -0.03 4.22 SOURCE: Sungard AP Costco Wholesale COST Barclays USAggregate 2.16 +0.02 2.03 CNC 47.36 83.00 61.92 +.46 +0.7 -5.9 -12.9 22 ...

Centene Wynn Resorts WYN Vol.: 4.9m (1.6x avg.)

PE: ...

Peak Resorts SKIS 2.60 7.73 3.22 +.03 +0.9 -46.4 -40.7 dd 0.55 PRIME FED Close: $152.03 -4.74 or -3.0% Mkt. Cap: $20.01 b Yield: 2.2% Barclays US High Yield 8.13 -0.09 6.01 Close: $74.85 -0.65 or -0.9% FUNDS RATE Commerce Banc. CBSH 37.44 47.11 43.20 -1.21 -2.7 +1.6 +12.3 16 0.90b The wholesale club company reThe hotel and casino company proMoodys AAA Corp Idx 3.64 +0.01 3.47 Perficient PRFT .38 ported 14.90 21.92 20.29 its sales for March. -.16 -0.8 +18.5 -1.9 30 ...

YEST 3.50 posed a new development in Las Hanesbrands EPC 67.94 107.38 HBI Edgewell 81.03 -1.32 -1.6 +3.4 -19.2 20 ...

Barclays CompT-BdIdx 1.22 -0.04 1.63 .13 3.25 6 MO AGO Vegas.

Post Holdings POST 41.63 72.64 69.00 -1.01 -1.4 +11.8 +44.0 dd ...

Close: $27.87 0.77 2.8% .13 Barclays US Corp 3.18 +0.02 2.86 1 YR AGO 3.25 Emerson EMR or 41.25 62.75 52.87 -.35 -0.7 +10.5 -3.3 14 1.90f $160 The maker of underwear, t-shirts $90 Energizer Holdings 28.86 44.52 42.70 -.27 -0.6 +25.4 ... 1.00 Pulaski Financial PULB 12.24 17.25 15.07 -.41 -2.6 -5.6 +27.7 13 0.38 and socks said itENR will buy Champion 80 150 Europe.

RGA 76.96 98.70 93.08 -1.51 -1.6 +8.8 +2.7 11 1.48 Enterprise Financial EFSC 19.68 30.73 25.19 -.81 -3.1 70-11.1 +24.2 15 0.36f ReinsGrp

Goldman Sachs

GS

StocksRecap

LocalStocks

60 Esco Technologies ESE 31.50 39.98 38.16 +.10 +0.3 +5.6 -0.4 23 0.32 $35 Reliv J F M A 52-week 30 Express Scripts ESRX 65.55 94.61 70.05 +.93 +1.3 -19.9 -18.6 20 range ...

Stereotaxis $60.59 $92.00 25 First Clover Leaf FCLF 8.50 9.89 9.40 +.05 +0.5 +1.2 +9.4 8 0.24 Vol.: 1.4m (0.9x avg.)

PE: 14.6 Stifel Financial Mkt. Cap: $8.39 b Yield: 2.7% 20 Foresight Energy FELP 1.07 15.73 J F M A1.18 -.05 -4.1 -66.6 -85.9 dd 0.68m SunEdison 52-week range Costco Wholesale COST FutureFuel FF 9.11 16.08 10.23 -.02 -0.2 -24.2 -1.2 10 0.24 $23.25 $34.78 Close: $152.03 -4.74 or -3.0% +5.0 +33.0 club 4 company ... SunEdison Semi Huttig Building Prod HBP 2.84 4.12 3.99 +.20 +5.3 The wholesale reVol.: 6.0m (1.5x avg.)

PE: 26.2 ported its sales for March.

Mkt. Cap: $10.81ISLE b Yield: 1.6% Isle of Capri 10.62 21.43 14.00 -.16 -1.1 +0.5 -0.4 23 ... WldPntTm

140 J F A RELV 0.37 1.40 .77 M -.02 -2.8 +32.8 -29.3 dd 52-week range $117.03 0.54 2.53 1.65 +.02 $169.73 STXS +1.2 +122.1 -17.7 dd Vol.: 4.0m (1.6x avg.)

PE: 29.1 SF 25.00 59.93 27.75 -1.36 -4.7 -34.5 -47.9 12 Mkt. Cap: $66.75 b Yield: 1.1%

... ...

SOURCE: Sungard AP SUNE 0.20 33.45 .40 +.03 +8.4 -92.1 -98.5 dd

...

SEMI 3.24 26.20 5.75 -.10 -1.7 -26.7 -77.5

...

WPT 11.79 18.90 14.37 -.07 -0.5 +7.2 -9.4 15 1.20

Wynn Resorts

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 announceWYN ment. i - Sum of dividends paid after stock split, no regular rate. j - Sum of dividends$160 paid this year. Most recent dividend was omitted or deferred. k - Declared or paid this year, a cumulative issue with dividends 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 in stock, approximate cash value on ex-distribution Close: $74.85 orfund -0.9% date.

PE Footnotes: q - Stock is -0.65 a closed-end - no P/E ratio shown. cc - P/E exceeds 99. dd - Loss in last 12 months.

150

The hotel and casino company proposed a new development in Las Vegas.

140

GlobalMarkets

...

INDEX LAST CHG CHG YTD S&P 500 2041.91 -24.75 -1.20% -0.10% 9530.62 -93.89 -0.98% -11.29% Frankfurt DAX London FTSE 100 6136.89 -24.74 -0.40% -1.69% Hong Kong Hang Seng 20266.05 +59.38 +0.29% -7.52% Paris CAC-40 4245.91 -38.73 -0.90% -9.22% Mexico City Bolsa 45052.16 -229.81 -0.51% +4.83% Tokyo Nikkei 225 15749.84 +34.48 +0.22% -17.25% Sao Paolo Bovespa 48513.11 +231.11 +0.48% +11.91% Toronto 13266.44 -81.02 -0.61% +1.97% Zurich 7761.35 -6.88 -0.09% -11.98%

Bommarito 10 YEAR/200,000 MILE $117.03

$90

F M A 52-week range $169.73

Thursday, April 7, 2016

Vol.: 4.0m (1.6x avg.)

PE: 29.1 Mkt. Cap: $66.75 b Yield: 1.1%

80 70 60

J

SOURCE: Sungard

J

$60.59

AP

F M A 52-week range $92.00

A BOMMARITO EXCLUSIVE

Vol.: 1.4m (0.9x avg.)

PE: 14.6 Mkt. Cap: $8.39 b Yield: 2.7%

COST NATIONWIDE WARRANTY WITH EVERY NEW VEHICLE PURCHASE! -4.74 or -3.0%

Costco Wholesale

AT THE BIG CORNER OF I-270 & NORTH LINDBERGH BLVD. AND NOW A SECOND NISSAN LOCATION IN WEST COUNTY

Close: $152.03 The wholesale club company reported its sales for March. $160

Local jobless rate flat at 4.7 percent in February 150 140

J

F M A 52-week range $117.03 $169.73

BY JIM GALLAGHER • St. Louis Post-Dispatch Vol.: 4.0m (1.6x avg.)

PE: 29.1 Mkt.St. Cap:Louis $66.75area b unemployment Yield: 1.1% The rate

held at 4.7 percent in FebruaryAPfor the SOURCE: Sungard third straight month, the government reported, matching a 14-year low.

The area gained 6,900 jobs from January, a number adjusted for normal seasonal changes, the U.S. Bureau of Labor Statistics reported. That 0.5 percent gain brought the job total to 1.36 million.

Meanwhile, economists at PNC Bank predicted “slow but steady economic expansion” for St. Louis over the rest of this year.

The Pittsburgh-based bank painted a fairly rosy picture in a new report on the region. The improved labor market provides “a new dynamic for job seekers,” giving them “some leverage in earning strong wage growth.”

The bank noted that household income

in St. Louis is above the national average, while the cost of living is lower.

“These conditions will allow household spending to keep local businesses hiring, and allow new businesses to enter the marketplace with some confidence in the local economy’s outlook,” the economists wrote.

The metro area’s 4.7 percent unemployment rate, seasonally adjusted by the Federal Reserve, is below the 4.9 percent national rate for February. The bank noted

GM settles ignition suit • General Motors Co. on Thursday said it had agreed to settle a lawsuit that would have been the third case to go to trial over a faulty ignition switch linked to nearly 400 injuries and deaths.

In a letter filed in federal court in Manhattan, GM’s lawyers said the automaker had entered into a confidential settlement with Nadia Yingling, whose lawsuit over her husband’s 2013 death following a car crash was set to go to trial May 2.

It was unclear why GM decided to settle the case. GM confirmed the deal but offered no further comment. A lawyer for Yingling did not respond to a request for comment.

The deal came a week after GM scored a win in the first case to reach a verdict in a series of six test trials scheduled over the ignition switch.

The switch can slip out of place, causing engines to stall and cutting power to the brake, steering and air bag systems.

Although GM succeeded in last week’s trial in convincing jurors that the ignition switch in question was not responsible for the accident in the case, the jury did conclude the switch was defective.

A prior trial ended without a verdict in January following allegations that the plaintiff gave misleading testimony.

GM has admitted that some of its employees knew about the problems for years, and it has already paid roughly $2 billion in settlement and penalties. It continues to face 235 injury and death lawsuits consolidated before a federal judge in Manhattan.

that more workers are seeking jobs as the market improves, and the growth in the labor force will make it difficult to drive the St. Louis jobless rate lower.

The last year saw more of the region’s long transition from manufacturing to a service economy, as the region’s job count grew by 1.5 percent from February 2015.

Jim Gallagher • 314-340-8390 jgallagher@post-dispatch.com

BUSINESS DIGEST Kaldi’s expands • Kaldi’s Coffee Roasting Co. is expanding its footprint with a total of four new stores in St. Louis and Atlanta this year.

The St. Louis-based coffee chain said its seventh St. Louis area store will open in the Gerhart Lofts building at the corner of Laclede and Vandeventer avenues near St. Louis University.

Kaldi’s eighth St. Louis area store will open at the Mid Campus Center building at 4590 Children’s Place, which is on Washington University’s medical school campus.

Space Architects is the architect on the Gerhart store, and Christner is the architect on the store that will open in the Children’s Place building, which is under construction.

“We’ve been looking to add a new location in St. Louis for the past couple years, and these two are perfect fits,” Kaldi’s owner Tricia Zimmer-Ferguson said in a statement posted on the company’s website Thursday.

In Atlanta, where Kaldi’s has one existing store, the chain plans to open two additional stores this year.

Kaldi’s opened its first location in 1994 in St. Louis’ DeMun neighborhood.

Pentagon worries over rail merger • The U.S. military on Thursday raised concerns with a federal rail regulator over the voting trust Canadian Pacific has proposed as part of its takeover bid for Norfolk Southern and said the deal could adversely affect the country’s national defense.

In a letter to the U.S. Surface Transportation Board dated April 7, the Department of Defense said CP’s proposal to have its chief executive, Hunter Harrison, run Norfolk Southern as part of the voting trust “could prove to be untenable due to the appearance of common control” of the two railroads.

CP, which is Canada’s second-largest railroad, disclosed a $28 billion offer for Norfolk Southern in mid-November. Norfolk Southern has rebuffed all advances from CP. The letter comes as a response to a March 2 petition from CP to the STB seeking a “declaratory order” on its voting trust

proposal. The idea would be to place both railroads in a trust — if they agreed to merge — pending a review by the STB. Under the STB’s merger rules, common control is not allowed.

The Department of Defense said in the letter that “it is too early to determine” whether a merger would degrade national defense, but said “the potential certainly exists.”

The U.S. military relies on rail networks to move defense-related cargo across the country, both during peace and times of war.

Consumer debt rises modestly • U.S. consumers borrowed at a modest pace in February for the second month in a row, evidence of ongoing caution that has kept a lid on spending this year.

Borrowing rose at a 5.8 percent annual rate, the Federal Reserve said Thursday, just above January’s 5 percent pace. The use of revolving credit — mostly credit cards — rose just 3.7 percent after slipping in January.

Total outstanding credit increased $17.2 billion to $3.57 trillion.

Americans barely increased their spending in February for the third straight month.

From staff and wire reports

BUSINESS

B4 • ST. LOUIS POST-DISPATCH

BEST OF BUILDING BLOCKS

M 1 • Friday • 04.08.2016

A-B’s Arnold expansion results in 70 new jobs BOTTLES • FROM B1

Highlights from our real estate and development blog.

STLtoday.com/ buildingblocks Light displays coming to the Grove • As many as 10 overhead light displays are coming to the Grove entertainment area along Manchester Avenue in St. Louis.

Spheres illuminated from within by LED lights will be strung across Manchester. The first lights will go up at Manchester and Tower Grove Avenue.

Brooks Goedeker, executive director of Park Central Development, the area’s development corporation, said funding is in place for five of the planned light displays.

Each display of poles and lights costs $35,000.

Engraphix Architectural Signs, based in Brentwood, designed the displays, which will have changing light colors and spheres that will appear to move.

Grove officials first looked at putting lights on building rooflines along Manchester. Still too many streetscape gaps for that, Goedeker said. Officials then considered overhead strings of white lights like those on Washington Avenue downtown. Nah. Goedeker said the Grove finally opted for a hipper display like some found in Europe or, believe it or not, in China. (04.08) Contractor to move to historic house • The Hicor Group, a construction contractor, plans to spend $1.1 million to renovate the historic Bronson house in St. Louis as its headquarters.

Hicor, a minority contractor with a specialty in historic preservation work, said it will do the project’s carpentry and concrete work.

The Bronson house, at 3201 Washington Boulevard, went up in 1885 for Dr. George Bronson and his family. The 7,000-square-foot building at the edge of Grand Center is on the National Register of Historic Places. The Late Victorian era house has Queen Anne and Romanesque design elements with Chateauesque influences.

Renovation plans include new interior walls, flooring, ceilings, lighting and electrical systems, plus a new roof, said Hicor’s president, Andrew Stafford. Move-in is scheduled for this fall.

Hicor won’t move far. It’s currently at the former Central States Life Insurance Building, a 1920s Spanish Missionstyle building at 3207 Washington. (04.06) NAI Desco to relocate within Clayton • Commercial real estate firm NAI Desco is doing its own property deal.

The company is relocating its headquarters across downtown Clayton, from 8235 Forsyth Boulevard to the 19th, and top, floor of the 101 South Hanley Building.

“We have been growing across all business lines as a rebounding commercial real estate market fuels client demand for facilities that will help make their companies more efficient and productive,” Toby Martin, NAI Desco’s president and chief executive says in a statement.

For now, the company employs 30 people who work in 7,300 square feet of space at 8235 Forsyth.

The new HQ at 101 South Hanley will have 15,000 square feet of space.

NAI DESCO is the St. Louis affiliate of NAI Global, a real estate network with 400 offices worldwide. (04.05)

COMMERCIAL REAL ESTATE NOTES ‌ Send items to bizrealestate @post-dispatch.com.

Plant manager Cheryl Rogers said the Arnold expansion is being used for 16-ounce Budweiser and Bud Light aluminum bottles with twist-off lids that have grown popular at baseball games.

“It’s a great location to be in because of the proximity to the St. Louis brewery and its location in the Midwest,” she said of Arnold, adding the manufacturing lines are flexible and can accommodate different brands.

Arnold was the first site where A-B began producing the resealable bottle, beginning in 2013. Last week, A-B broke ground on a new $175 million aluminum bottle line at its Metal Container Corp. facility in Jacksonville, Fla., which will add 75 jobs there.

Both the Arnold and Jacksonville facility expansions are part of the brewer’s plans announced in mid-2015 to invest $1.5 billion in its U.S. operations through 2017.

Bud Light and Budweiser continued to lose market share in the U.S. last year, but A-B remains the top seller of beer in the U.S., with 46.4 percent market share, based on sales to retailers. Bud Light is the country’s top-selling beer, followed by Coors Light and Budweiser.

Both of A-B’s flagship U.S. brands recently revamped their label designs after years without a makeover. Budweiser debuted a new look last year that replaced gold detailing with platinum, and Bud Light rolled out a more extensive redesign Monday in blue and white that brought back the A-B crest and removed red as an accent color.

Harry Schuhmacher, publisher of industry publication Beer Business Daily, said resealable aluminum bottles offer A-B a way to stand apart from other beers, particularly in the light beer category.

“In an increasingly commoditized light beer industry, A-B has a point of differentiation with their aluminum bottles,” Schuhmacher said. “They have the resources to ramp up alu-

DAVID CARSON • dcarson@post-dispatch.com

An automated forklift moves pallets of Bud Lite cans Thursday at Metal Container Corp. in Arnold.

minum bottle capacity quickly, whereas competitors must rely on suppliers which inevitably have shortages.”

Other brewers have turned to aluminum bottles to woo beer drinkers, promising a container that keeps beer cold longer than glass. In 2004, Pittsburgh Brewing Co. was one of the first brewers to ship aluminum bottles for its Iron City Beer, but they came with traditional crown caps that were not resealable. After the brewery’s ownership changed, the bottles were discontinued.

In 2008, A-B rival MillerCoors was the first brewer to bring a resealable aluminum bottle to the market, when the Chicago-based brewer launched pint-sized wide mouth aluminum Miller Lite bottles made by Ball Corp.

The company has since expanded the pint, or 16-ounce, aluminum bottles to three other brands: Miller Genuine Draft, Coors Light and Coors Banquet.

This year, MillerCoors added its third aluminum bottle line at its Fort Worth, Texas, brewery, adding to two existing aluminum pint lines in other states, said MillerCoors’ senior director of revenue management Kevin Nitz.

With aluminum bottles, brewers aren’t confined to using just the label space for design purposes, Nitz said. Miller Lite offers a special release St. Patrick’s Day beer in an aluminum bottle, for example, with green shamrocks covering the bottle.

“It provides a canvas to speak through design about our brands in a unique way,” he said.

Summers says spending could counter malaise

Lines would tie wind power to grid

NICKLAUS • FROM B1

Ameren Corp.’s transmission subsidiary.

Ameren Transmission went through the traditional process and got the regional grid operator to say its 100-mile Mark Twain line was a necessary project. As a result, if it wins approval from local authorities, ratepayers across the region will reimburse Ameren for the costs of the Northeast Missouri line.

At least three of five Missouri Public Service Commissioners indicated this week they thought the project met its criteria for a certificate of convenience and necessity, which would give the utility the right to use eminent domain if it has to. A final vote will be in the coming weeks.

It was on a 3-2 vote last summer that the PSC derailed Clean Line Energy Partners’ Grain Belt Express transmission line. The transmission line would have spanned 780 miles and crossed Missouri in order to pipe wind energy from Kansas to customers further east.

It won approval from Kansas, Illinois and Indiana regulators, but Missouri’s opposition halted the project.

Clean Line, however, isn’t a traditional utility. Instead of going through a grid operator’s planning process, Clean Line says it will assume the risk of building the line and sign up customers and generators independently. And most of the 4,000 megawatts would be delivered to states east of Missouri, where electricity prices tend to be higher.

Clean Line says its transmission line would still deliver up to 500 megawatts to Missouri customers, but that wasn’t enough to convince a majority of the PSC. Commissioners said they didn’t think the company demonstrated the project was needed in the state.

Citing public outcry and property rights, the commissioners balked at giving it utility status that would let it use eminent domain to acquire easements.

PSC Commissioner Bill Kenney, who voted against Grain Belt, noted the difference in a discussion of Ameren’s Mark Twain line during a webcast of a meeting Wednesday.

“I was one of three commissioners here who voted against the Clean Line Grain Belt Express because I felt it did not benefit Missouri customers,” he said. “I think this does benefit the ratepayers.”

Commissioner Stephen Stoll acknowledged opposition around Kirksville and Palmyra to Ameren’s 100-mile line. But Stoll, who opposed Grain Belt, said he saw the projects differently.

“I do feel for the property owners,” he said. “I know people don’t necessarily want these, but for the reasons I voted against Clean Line, I think in this case (Ameren) had gone through the requi-

Depression with the recent Great Recession. The downturn after 1929 was sharper than the one of 2008 and 2009, but the recovery by 1940 was more vigorous than what we’re seeing today. “If you think the 1930s were a lost decade, we are having an equivalently lost decade now,” he said.

Summers was an unusual choice for the annual Homer Jones lecture, which honors the St. Louis Fed’s research director of the 1960s and 1970s. Unlike past speakers, Summers is not especially sympathetic to Jones’ brand of monetarist economics. He said the monetarist research done in St. Louis was important but “ultimately wrong.”

Mostly, though, Summers wasn’t here to debate the past. He criticized current Federal Reserve leaders’ desire to push interest rates back up to more normal levels. “Normalization is the wrong objective in abnormal times,” Summers said.

He thinks, in fact, that the Fed is relatively powerless today. The central bank cuts interest rates an average of 5 percentage points when it sees a recession coming; overnight rates now are less than 0.5 percent.

“It is highly unlikely that when the next recession comes there will be anything like enough room for the standard monetary policy response,” Summers said.

Nor does he think quantitative easing, the bond-buying policy the Fed deployed between 2009 and 2013, will be effective against the forces of secular stagnation.

“The way monetary policy works is by pulling spending forward,” Summers explained. “If you have a temporary demand shortfall, a reduction in interest rates is terrific. … But if you have a permanent demand shortfall, at some point that pull-forward catches up with you.”

Inflation-adjusted interest rates have generally been falling since 1980. Summers sees that as evidence that the nation has had a shortage of investment, or a surplus of savings, for a long time.

The causes are many, he says: growing inequality, an aging population and even technology. The success of Amazon means we need fewer shopping malls, and every Airbnb rental is a hotel room that doesn’t need to be built.

These are deflationary trends. They help explain why inflation remains stubbornly below the Fed’s 2 percent target. And, most distressingly, none of these trends is expected to abate anytime soon.

Other economists have alternative explanations for our slow-growth malaise, and none of them is particularly cheery. Robert Gordon, a professor at Northwestern University, says we’re doomed to slow growth because the inventions of recent decades — such as mobile phones and the Internet — are nowhere near as life-changing as the automobile and electricity were a century ago.

Summers at least has a prescription for climbing out of the rut: He proposes a big increase in government spending.

“Public investment, and policies to promote private investment, have been sorely lacking,” he said. “If this is not the moment to undertake infrastructure maintenance and renewal, I don’t know when that moment will come.”

Congress, however, isn’t in any mood to fill Summers’ prescription. If his secular stagnation thesis is right, we are left to worry that the next recession may be worse than the last.

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

POWER • FROM B1

site issues and came to us with a clear plan and that’s why I think they met the standards and I support it.”

CLEAN LINE TO TRY AGAIN Clean Line says it still plans to refile an application with the PSC sometime this year. Mark Lawlor, the company’s director of development, said the company will attempt to better define the benefits to Missouri. It is working to finalize commitments from Missouri utilities to buy power on the line, which he thinks may help convince the commission.

“They want the benefits to Missouri to be plain, clear and easy to understand, and we get that, and that’s what we’ll do,” Lawlor said, adding: “I wouldn’t say they weren’t there the first time around.”

Failing that, the company may be able to bypass Missouri. After Arkansas regulators blocked another Clean Line project connecting wind energy from Oklahoma and the Texas Panhandle to the Southeast, the Department of Energy said last month it would partner with the company.

That allows the project to bypass state regulators under a 2005 law.

Lawlor said Clean Line hasn’t sought the same authority in Missouri, but a similar DOE arrangement “isn’t impossible” here. He noted that in developing its southern transmission line, it would follow the regulatory process in states that had already approved the project and asserted their jurisdiction. Missouri can likewise assert its authority, he said.

“They have the ability to take jurisdiction and impose any provisions and protections that they see fit,” Lawlor said.

The Ameren project, meanwhile, may win PSC approval but face a challenge in the courts. At issue is whether it and other transmission developers must obtain approval from each county commission. With pressure from landowners against the project high, Ameren hasn’t won the assent of all Northeast Missouri counties its Mark Twain crosses.

PSC Chairman Daniel Hall said he thought state law indicates transmission lines do need county approval, but he felt the PSC could grant its approval on the condition that the utility ultimately win the assent of affected counties. Either way, he expects a judge will ultimately end up interpreting the rules.

“The reality is it doesn’t really matter what the five of us say that statute means,” Hall said. “What really matters is what a court or an appellate court says that statute means. While I’ve got my opinion and maybe the commission will have its opinion, the reality is it’s going to go to a court.”

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

Israeli tech company NRGene to open St. Louis office

BY LISA BROWN St. Louis Post-Dispatch

Israeli tech company NRGene plans to open an office in the Cortex innovation district that will serve as its U.S. base of operations.

The analytics company develops computational tools and algorithmic models for trait discovery used by seed companies, animal breeders, and academia.

Its office, which will open this spring at the CIC@CET in the Central West End, will initially

have one employee and ultimately grow to about six employees, said Paul Chomet, NRGene’s strategic consultant.

“It makes a lot of sense to be in the heartland of the country with companies such as Monsanto and academic groups like the Donald Danforth Plant Science Center,” Chomet said. “St. Louis is really a cultural hub for this advanced ag genomics work.”

NRGene is the fourth Israeli agritech business that has set up operations locally in the past 18

months. All four were recruited by GlobalSTL, an initiative of BioSTL to attract high growth international companies to St. Louis. The other three companies are Kaiima Agro-Biotech, Evogene and Forrest Innovations.

The nonprofit BioSTL focuses on nurturing St. Louis biotechnology startups. GlobalSTL was formed in May 2014 to identify and attract more mature international companies that are looking to establish a U.S. presence.

“The idea is that these compa-

nies, if they establish their U.S. base in St. Louis, as they continue to have success and grow, our hope is that growth is in St. Louis,” said BioSTL’s president and CEO Donn Rubin.

NRGene has been offered $118,644 in state incentives through the Missouri Works program if it meets job creation goals.

“Missouri is a world renowned hub of bioscience innovation and ... today’s announcement builds on this strong economic momentum,” Gov. Jay Nixon said in a statement.

BUSINESS

04.08.2016 • Friday • M 1

ST. LOUIS POST-DISPATCH • B5

SunEdison’s setbacks affect India’s politics

BY KRISHNA N. DAS Reuters

MUMBAI • The likely collapse of SunEdison Inc.’s solar project in India, the first of 32 planned “ultra mega” complexes, could delay Prime Minister Narendra Modi’s goal to increase renewable energy fivefold by several years and probably cost consumers more.

As the Maryland Heightsbased solar giant fights to stave off bankruptcy, the 500 megawatt project in Andhra Pradesh state it won last November lies idle with ground yet to be broken. The other projects are still to be bid on.

It’s doubtful any rival will pick up the project at the aggressive power pricing promised by SunEdison, which beat out 29 other bidders with a record-low tariff of 4.63 rupees, or about 7 cents, per kilowatt-hour.

That will force Indian officials to tighten auction rules to ensure that only serious, bankable bidders show up, industry sources said. India plans to auction more of the “ultra mega” projects — those which generate at least 500 MW — in the current fiscal year

through to March 2017.

“There is always a tradeoff,” Upendra Tripathy, secretary at the Ministry of New and Renewable Energy, told Reuters of the renewable energy auctions.

“There can be a relaxed condition so that more people can participate and there is another where you can make sure fly-by-night operators can’t come in. It’s an ongoing process, and we are open to suggestions.”

Tightening auction rules could slow the pace at which projects are awarded and built, pushing back Modi’s goal of expanding solar capacity to 100 gigawatts by 2020 to the middle of the decade, say officials and industry players.

Tripathy, however, said India will for now stick to its goal, set by Modi soon after taking office in 2014, and that it has planned for SunEdison-like bumps in the road with a strong project pipeline.

Modi is banking on India’s 300 days a year of sunshine to help fight climate change rather than committing to emission cuts like China.

But he has also pushed firms to provide cheap power, which risks leaving too little

profit on the table.

Heavily indebted SunEdison, which according to one of its publicly listed units could soon file for bankruptcy protection, drew criticism from analysts for its low winning bid for the Andhra project.

The company is now exploring a sale of its Indian assets of around 1 GW or seeking partners for them, sources said, and has drawn preliminary interest from billionaire Gautam Adani’s fast-expanding Adani Group.

Apart from the Andhra project, SunEdison has several other small plants under construction across India.

A person close to Adani said the low tariff agreed for the Andhra plant will make any deal with SunEdison difficult for Indian firms, which have a relatively high cost of capital. If no buyer is found, the project could be re-bid, the industry sources said.

SunEdison did not respond to multiple requests for comment.

“The tariffs are a tad aggressive and that may not be healthy for developers themselves and also for others in the ecosystem ... manufacturers and finan-

ciers,” said Santosh Kamath, head of renewables at consultancy KPMG India. “That might be a warning signal for the industry.”

SunEdison’s troubles notwithstanding, India has attracted deep-pocketed investors to its $100 billion solar energy program — the biggest in the world.

Japan’s Softbank Corp., Taiwan’s Foxconn and India’s Bharti Enterprises have separately pledged to invest a total of about $20 billion in India’s renewable sector. Global solar giants like First Solar Inc., Trina Solar Ltd and Finland’s statecontrolled utility Fortum Oyj are also expanding their presence.

India wants the share of non-fossil fuel in total installed power capacity to jump to 40 percent by 2030 from 30 percent currently.

Challenges include the weak finances of state distribution companies forced to sell subsidized power, difficulties hooking up solar projects to grids, and access to affordable capital. Land acquisition is also an issue that Modi’s government has been unable to fix — a 500 MW solar project needs on average 2,000 acres.

St. Louis Swap Meet will fill vacant lots on Cherokee Street

BY DEBRA D. BASS St. Louis Post-Dispatch

Due to construction work starting at the Lemp Brewery, the St. Louis Swap Meet has to relocate.

Instead of taking root in another neighborhood, the coordinators have made peace with their Antique Row neighbors and will instead occupy open lots along Cherokee Street.

At its inception, the Swap Meet drew opposition from some Antique Row business owners who feared it would steal away customers. To the contrary, the Swap Meet proved itself by attracting crowds of shoppers on what would otherwise be a sleepy Sunday afternoon.

The Swap Meet’s latest incarnation will debut at 10 a.m. April 24, and will meander along the streets outside historic Antique Row. Makeshift boutique stalls will stretch along Cherokee from Lemp Avenue to Jefferson Avenue.

Temporary shops, set up in vacant lots and along side streets, will offer vintage goods, crafts, services and food. Like last year, there will also be musical entertainment and children’s activities.

Martin Casas, owner of the St. Louis Swap Meet, said in a press release: “We are working with Cherokee business owners to bring the market directly to Cherokee Street which will not only ensure vendors and customers continue to have a great experience but will also give customers an even greater opportunity to discover this incredible street.”

The St. Louis Swap Meet will continue on the first and last Sunday of each month. For all new developments visit stlswapmeet.com or the event’s Facebook page under St. Louis Swap Meet.

Strong housing market extends to Metro East

and was 0.7 percent above February 2015.

Lawrence Yun, NAR’s chief economist, said pending sales in February rose to the highest index reading since July.

“Looking ahead, the key for sustained momentum and more sales than last spring is a continuous stream of new listings quickly replacing what’s being scooped up by a growing pool of buyers,” he said. “Without adequate supply, sales will likely plateau.”

NAR forecast that U.S. existing-home sales this year will increase 2.4 percent, to about 5.38 million. In 2015, existing-home sales rose 6.3 percent and prices rose 6.8 percent.

On the downside, existing-home sales fell 7.1 percent in February as a result of persistently low inventories and price rises in parts of the country, NAR said. Yun said the sales decline was tempered by price appreciation that lessened to 4.4 percent, which was still above wage growth but more favorable than the 8.1 percent annual increase in January.

“Any further moderation in prices would be a welcome development this spring,” Yun said. “Particularly in the West, where it appears a segment of would-be buyers are becoming wary of high asking prices and stiff competition.”

altor.com ranked St. Louis second, behind Providence, R.I., as a top housing market to watch. Jonathan Smoke, realtor.com’s chief economist, said some top markets — San Diego and Boston — are also among the priciest.

Some markets — including Providence, New Orleans and St. Louis — are experiencing real estate recoveries based on better economic conditions forecast for 2016, Smoke said.

The St. Louis Association of Realtors cited his finding in reporting sales figures for February. Sandy Hancock, the group’s president, said factors in Smoke’s prediction are median sales price and the days a house remains on the market unsold.

February Multiple Listing Service figures for St. Louis and St. Louis County showed that the year-over-year median home price rose 6 percent, to $148,000.

Days on the market dropped from 170 in February 2015 to 114 this year.

“These two indicators alone mean that whether you’re interested in buying or selling a home in St. Louis this year, you should know that homes are selling faster now, and prices continue to rise,” Hancock said.

Mid America Regional Information Systems data for its St. Louis region, an area that includes St. Louis, St. Charles, Jefferson and Franklin counties and St. Louis, showed 6,102 homes for sale in February, compared with 6,052 the previous year.

The value for homes sold in February breaks down to 62 percent sold for $199,900 or less, 25 percent sold between $200,000 and $499,999 and 13 percent sold for $500,000 or more.

John Gormley, chief executive of the St. Louis Association of Realtors, said the area remains affordable, noting that more 60 percent of February sales were for less than $200,000.

MARIS figures also showed the area’s housing inventory edged up in February to six months, compared with 5.9 months in February 2015. Economists consider 6.5 months of housing inventory healthy balance of supply and demand.

“What we are seeing here is an uncommon combination of factors that give credence to St. Louis being designated as one of the hottest real estate markets in the country,” Gormley said.

If the national economy remains strong and mortgage rates stay low, St. Louis could have one of the best years for home sales since 2007, he said.

AFFORDABILITY HELPS AREA

Tim Bryant • 314-340-8206 tbryant@post-dispatch.com

HOUSING • FROM B1

• In Webster Groves, first-time buyers hoping to purchase a house for $200,000 lost out to multiple offers from other buyers. Also in Webster, a house sold sight unseen for its asking price of $219,900 the day before it officially went on the market.

Bax said sales are strong in all areas, including St. Charles County, the region’s leading submarket in house sales and construction.

Is another housing bubble building in St. Louis? Probably not, Bax said.

The bubble that began a decade ago was a result of easy mortgages and the unrealistic belief that houses would never decline in value, he said.

“I think now that this is just pent-up demand over the last few years by buyers and now the sellers are realizing they can push the limit,” Bax said.

Steve Breihan, an agent in Berkshire Hathaway’s Clayton office, said much of the metro area has become a seller’s market. He provided the example of a buyer with a $450,000 budget and willingness to pay above the asking price for a house off Carman Road in west St. Louis County.

He came in second to a buyer who offered cash, thereby avoiding an appraisal, and even waived a home inspection.

“This buyer pulled out all the stops and, consequently, got the house,” Breihan said.

Homebuilding has slowed from the go-go days of a decade ago and is limited largely to St. Charles County, he said.

Elsewhere in the region, building sites are limited, especially in inner-ring suburbs.

The Metro East is part of the healthy market. February sales in St. Clair County grew by 23 percent — to 182 — from a year earlier, according to the Realtor Association of Southwestern Illinois. Median prices rose between 10 percent and 27 percent in St. Clair, Monroe and Clinton counties. March figures are not yet available.

Doug Payne, the association’s president, said the mild winter and buyer demand are helping sales this year.

“These positive factors coupled with the continuation of low interest rates provide a great time for current homeowners to think about moving up, listing their

PHOTO BY ROBERTO RODRIGUEZ

Rachel Herrman (left) and Kate Sherwood, both of Webster Groves, tour a home for sale Sunday in Webster Groves.

homes for sale and tapping into pent-up buyer demand,” he said.

According to Freddie Mac, the average rate for a 30-year, conventional, fixed-rate mortgage was 3.59 percent this week — the lowest since February 2015.

CONSTRUCTION FLAT Home construction remains nearly flat, however. Permits for single-family homes rose 3 percent in February in the Missouri portion of the metro area, according to the Home Builders Association of St. Louis & Eastern Missouri.

Kim Hibbs, the association’s president, said he expects the upward trend to continue this year.

“This is good news because new homes contribute not only to the tax base and employment but new homeowners spend thousands in the local community after a purchase on furniture, landscaping and other items,” he said.

Nationwide, pending home sales — in which a sales contract has been signed, but the deal has not yet closed — rose in February to their highest level in seven months and remained higher than a year ago, the National Association of Realtors reported this week. Regions led by the Midwest had increased contract activity, the association said.

The group’s pending home sales index, a forward-looking indicator based on contract signings, rose 3.5 percent in February

Affordability is a factor that put St. Louis on a top 10 list for 2016. In December, re-

BUSINESS

B6 • ST. LOUIS POST-DISPATCH

M 1 • Friday • 04.08.2016

Mega deals are morphing into mega problems for Wall Street ‌ Canceled Pfizer deal, Halliburton antitrust action emblematic

BY CARL O’DONNELL AND PAMELA BARBAGLIA Reuters

NEW YORK • If 2015 was a dream year

for Wall Street’s top dealmakers, 2016 is starting to take a nightmarish turn.

Some of the mega transactions that had champagne corks popping in boardrooms are running into antitrust problems, and in the case of pharmaceutical firm Pfizer Inc.’s $160 billion takeover of rival Allergan PLC, political opposition to a deal that envisaged the biggest drug company in the United States moving to Ireland to lower its taxes.

The U.S. Treasury unveiled new rules this week that, while they did not name Pfizer and Allergan, had provisions that targeted a specific feature of their agreement and prompted both parties to walk away from what would have been the second-largest deal on record.

The move by the administration of President Barack Obama to change the rules has sent a chilling message to dealmakers and comes on top of a number of legal challenges to big transactions such as Halliburton Co.’s takeover of rival oil services company Baker Hughes Inc. on antitrust grounds.

The political uncertainty and antitrust concerns mean that firms will think twice about future tie-ups that consolidate industries and move tax dollars offshore.

“As uncertainty increases on multiple fronts, companies are markedly more cautious and the number of transformational deals worth $10 billion or more has significantly dropped this quarter compared to last year,” said Luigi Rizzo, head of mergers and acquisitions for Europe, the Middle East and Africa at Bank of America Merrill Lynch.

The new U.S. rules do not directly affect most inversion deals, in which an American company buys a foreign counterpart

and then moves abroad to lower its tax bill, but they have sent a message to company bosses about the risks of attempting to move their tax addresses overseas.

Intercontinental Exchange Inc., the U.S. exchange considering a bid for the London Stock Exchange Group PLC, has ruled out structuring any possible deal for the LSE as an inversion, despite it being possible to do so, according to people familiar with the internal deliberations, who declined to be identified.

Intercontinental Exchange declined to comment.

Tax inversions have been a political hotbutton issue in Washington for years.

The rules unveiled this week were the Obama administration’s third effort to stop U.S. companies renouncing their American citizenship but they are only a temporary stopgap.

Formal legislation to overhaul U.S. tax rules would be needed to bring a permanent end to the practice.

“We have succeeded in making it significantly harder for companies to strike inversion deals and redomicile overseas,” said U.S. Rep. Peter Welch, D-Vt. “But we still need action in Congress.”

With a U.S. presidential campaign looming later this year there is much uncertainty about what shape such legislation would take, making deals all the more difficult to strike.

UNIQUE CHALLENGES Last year was a record for mergers and acquisitions and a bumper year for mega matches. Out of the $4.6 trillion in deals inked, the number of individual transactions that exceeded $30 billion in value was 18, compared with seven deals worth more than $30 billion in 2014, Thomson Reuters data showed.

But the consequence of greater consolidation is increased scrutiny by antitrust officials. That was exemplified on Wednesday by the U.S. government filing

Head of payday lender is indicted on federal racketeering charges

BY MARYCLAIRE DALE Associated Press

PHILADELPHIA • The

head of a payday lending enterprise accused of charging more than 700 percent interest on shortterm loans was indicted Thursday on federal racketeering charges.

Charles M. Hallinan, 75, led a group that preyed on customers while taking in nearly $700 million from 2008 to 2013, according to the indictment.

Hallinan operated under a string of business names that included Easy Cash, My Payday Advance and Instant Cash USA. Lawyers for Hallinan said he surrendered to authorities Thursday, but they otherwise declined to comment. He was expected to appear in court Thursday afternoon for a brief hearing in Philadelphia.

The group tried to evade state consumer protection laws by looping in Native American tribes as the supposed lender so they could claim tribal immunity from state regulations and deflect class-action lawsuits, the indictment said.

Hallinan’s companies charged customers about $30 for every $100 they borrowed, but they compounded the interest and fees over time until customers were charged more than $700 for the original $100 loan, the indictment said.

In Pennsylvania, the law typically caps interest to 6 percent on personal loans, though banks can charge up to 24 percent interest on loans below $25,000, federal authorities said.

They said Hallinan, of Villanova, paid a tribal leader in British Columbia $10,000 a month to pretend that he owned the payday lending enterprise

and, amid a class-action lawsuit, to say it had no assets.

Hallinan and Wheeler K. Neff, an agent of Hallinan’s companies, also steered at least one other payday lender into a similar tribal agreement, the indictment said. And Hal-

linan’s companies took control of various aspects of the payday lending business, owning firms that also generated leads and performed credit checks, authorities said.

Neff’s lawyer did not immediately return a call for comment.

a lawsuit to stop Halliburton from buying Baker Hughes, arguing the combination of the No. 2 and No. 3 oil services companies would lead to higher prices in the sector.

The Justice Department and Federal Trade Commission, which enforce antitrust law, have filed lawsuits to stop an unusually high number of deals in the past 18 months. FTC officials are in court this week to block a merger between Staples Inc. and Office Depot Inc. “It isn’t just the number of proposed deals that makes this a unique moment in antitrust enforcement; it’s their size and their complexity,” U.S. Attorney General Loretta Lynch said in a speech on Wednesday.

“This represents a remarkable shift toward consolidation and it presents unique challenges to federal enforcers in our work to maintain markets that serve not just top executives and majority shareholders, but every American.”

In Europe, meanwhile, talks between Orange SA and Bouygues SA to create a dominant French telecom operator collapsed last week, amid competition concerns and a stand-off between Martin Bouygues and French Economy Minister Emmanuel Macron about the clout the billionaire would have gained in the former state monopoly, according to people familiar with the matter.

For bankers, scuttled deals cost money.

Investment banks on the Pfizer and Allergan deal, including Goldman Sachs, JP Morgan, Centerview and Moelis, lost more than $200 million in fees when the companies walked, showed data from consultancy Freeman & Co. Faced with greater hurdles to get deals through, some investment bankers are rethinking how they want to structure their payoffs, including trying to get more cash up front rather than a big check after a deal closes, said a person familiar with the matter.

FIND THE CHEAPEST GAS IN TOWN Check gas prices and see real-time traffic conditions.

STLTODAY.COM/TRAFFIC

PacSun files for Chapter 11 bankruptcy protection REUTERS

Teen apparel retailer Pacific Sunwear of California Inc. filed for Chapter 11 bankruptcy protection on Thursday, succumbing to mounting losses and intense competition from fast-fashion retailers and online rivals.

The company, which joins recent U.S. Chapter 11 filings by surfwear brand Quicksilver and teen retailer American Apparel, plans to be taken private by investment firm Golden Gate once it emerges from bankruptcy, it said in a statement on Thursday.

Its shares fell 40 percent to close at 5.7 cents.

Citing “significant and unusual trading,” lawyers for the retailer asked a judge to restrict trading on Thursday due to concerns that a significant change in ownership could impair its ability to use tax benefits on operating losses down the road.

Founded in 1982 as a surf shop, PacSun has posted an annual net loss since the financial crisis hit in 2008.

It had about $342.7 million of net operating losses as of Jan. 31, which can be used to reduce tax liabilities if it becomes profitable again.

“The company believes that this is an extremely valuable asset of the bankruptcy estate,” Joseph Barry of Young Conaway Stargatt & Taylor said at an emergency hearing in Delaware.

U.S. Bankruptcy Judge Laurie Silverstein approved the interim motion and holders of PacSun stock will be notified. Under the motion, the company can seek to block transfers of large stock positions.

Pacific Sunwear said Golden Gate plans to convert more than 65 percent of its debt into equity and provide a minimum of $20 million in additional capital. Golden Gate had lent PacSun about $60 million in 2011.

The Anaheim, Calif.-based retailer said it would continue to operate all of its 600 stores and does not expect the bankruptcy filing to have an immediate impact on employees.

PacSun operates seven stores in the St. Louis area, according to the company’s website. Its stores are at West County Mall, South County Center, St. Clair Square, Chesterfield Mall, Mid Rivers Mall, Taubman Prestige Outlets Chesterfield and St. Louis Premium Outlets.

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BarrelFish, a lead cultivation software as a service (SaaS) provider, is a member of a growing number of success stories from the vibrant St. Louis Start-Up community and a graduate of ITEN's Mock Angel program. Their software uses big data providers and custom lead scoring algorithms to get their clients' message heard by the right prospects at the right time. As civic-minded business owners, BarrelFish has created a version of their software, “DonorFish," designed specifically to support fundraising for nonprofits. With a Navy veteran owner, BarrelFish has been recognized as a Business of Honor for partnering with area Veteran/Military nonprofits to use their system to drive donorship and participation. This is a company with a great idea, great community spirit, and is a tremendous supporter of veterans and our military.

Contact this outstanding Business of Honor by visiting their website at: www.reelqualityleads.com

reelqualityleads.com Post-Dispatch readers will be introduced to some outstanding individuals and businesses recognized for their contributions to our country and the individuals who have served in our military. Think about how you might support those organizations that are doing tremendous work to support those who gave the nation a blank check to be sent in harm's way when needed.

The Joshua Chamberlain Society ("JCS") is a grass roots, St. Louis-based, 501(c)(3) charity. JCS was formed with the mission of providing long term support to military veterans from the greater St. Louis area that sustained permanent combat injuries fighting the global war on terror as well as the families of local veterans who made the ultimate sacrifice in the service to our country. The unique mission of JCS is that it adopts, in the truest meaning of that word, these veterans or the family of deceased veterans, and commits to provide support for the long term. This support is multi-faceted and comes in the form of gifts, tuition assistance, monetary donations, etc. – anything that JCS identifies as something that will improve the quality of life for these heroic Americans. The Joshua Chamberlain Society takes pride in low overhead; 94 cents of every dollar contributed goes directly to our Heroes. JCS is supported by a strong and committed Board, individuals, foundations and corporations in the St. Louis area.

To learn how you may help The Joshua Chamberlain Society please visit their website at www.chamberlainsociety.org or contact Kathleen Winkler at 314.504.2702.

chamberlainsociety.org

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 • 04.10.2016 • E

WHOSE BEST INTERESTS? Clients’ financial welfare comes first under new federal guidelines

“Is it really better for that small investor to get advice that’s not in his best interest? Is that better than requiring brokers to act in the best interest of clients?”

“This misguided rule will only raise costs, limit choices, and restrict access for Missouri families as they save for retirement.”

— U.S. Rep. Ann Wagner, R-Ballwin

— Jerry Schlichter, St. Louis lawyer representing investors

“While the rule is new, I continue to believe that all the additional disclosures and burdens and potential liabilities will result in limiting advice to small investors.”

“Today’s rule ensures that putting clients first is no longer just a marketing slogan. It’s now the law.”

— U.S. Labor Secretary Thomas Perez

— Ron Kruszewski, CEO at Stifel Financial

Retirement advice, fee model may shift

BY JIM GALLAGHER St. Louis Post-Dispatch

RETIREMENT ASSETS ARE GROWING The chart shows the growth in retirement savings, in billions of dollars. Defined contribution, or DC plans, include 401(k)s, deferred compensation and similar plans for nonprofit and federal workers. DC plans let employees put aside money for retirement in a tax-deferred account.

The U.S. Department of Labor last week messed with the investment advice industry’s multitrillion-dollar retirement money machine. As a result, the way the industry handles clients will undergo serious change.

The administration of President Barack Obama issued hundreds of pages of new regulations centered around a single word: fiduciary.

Starting next April, financial advisers (read: stockbrokers and insurance salesmen) will have a fiduciary duty to their

Honest money input was worth the wait DAVID NICKLAUS St. Louis Post-Dispatch

SOURCE: Investment Company Institute

The financial advice industry is about to go through its biggest regulatory change in decades, but many retirement savers may not even notice.

When a new Labor Department regulation takes full effect in 2018, Americans with Individual Retirement Accounts and 401(k) plans will finally get the unbiased advice they think they’ve had all along.

See FIDUCIARY • Page E4

See NICKLAUS • Page E4

Southwest expands its reach

Lazy filer’s cheat sheet to tax day

Airline is adding gates, flights at a spruced-up Lambert

Last-minute tips help you save dough, buy time — with no cheating required JIM GALLAGHER St. Louis Post-Dispatch

Hey, lazybones! Get a move on. You have eight days to file your taxes if you live in the Metro East or the city of St. Louis.

Yeah, it’s a pain, but look on the cheery side. If you’re like most people, you’ll be rewarded with a nice refund.

So, here’s some info aimed at the very laid-back among us:

SQUISHY DEADLINE

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

Southwest Airlines is adding two gates, set to open this week, in Terminal 2 at Lambert-St. Louis International Airport.

BY LEAH THORSEN • St. Louis Post-Dispatch

Gone is the maroon carpet that covered walls near the chapel in Terminal 2.

It was a remnant of the days when Lambert-St. Louis International Airport served as a Trans World Airlines hub, giving St. Louis an abundance of direct destinations.

The new look — including new chairs, plenty of outlets, paint and equipment — is that of Southwest Airlines, which dominates airport traffic these days and is adding flights — so much so that two new gates are expected to open this week.

“The concourse is full. There are no more gates,” said Rhonda Hamm-Niebruegge, the airport’s director.

The new gates are the latest symbol of the change in dominance at the airport over recent years, when Southwest has See SOUTHWEST • Page E4

Passengers walk through Terminal 2 at Lambert on Monday.

Southwest Airlines occupies all of the terminal.

For most of the United States, the tax filing deadline is Monday, April 18. (All taxpayers got a three-day pass on the usual April 15 deadline, because that date, Friday, is a municipal holiday in Washington.) > Contributions to But about half an IRA, SEP-IRA may of the people liv- still be possible. A2 ing in the St. Louis metro area can take an extra month to file if they want. That’s because the IRS gave a one-month extension to victims and relief workers affected by the flooding that swamped area suburbs and small towns just after Christmas.

Because the IRS can’t tell exactly who was flooded, everyone living in the affected counties gets until May 16 to file.

Around here, those counties are Franklin, Gasconade, Jefferson, Lincoln, St. Charles, St. Francois, Ste. Genevieve, St. Louis and Gasconade. The city of St. Louis, however, is not included.

People have to prepare their federal See GALLAGHER • Page E3

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M 1 • Sunday • 04.10.2016

It’s not too late to slash what Is it time to build a you owe Uncle Sam for 2015 Contributions to IRAs, SEP-IRAs are possible until tax deadline

BY KATHY KRISTOF Reuters

If you are in the process of preparing your 2015 tax return and find yourself horrified by the amount you owe or disappointed by the paucity of your refund, you still have an opportunity to cut the bill by paying yourself instead of Uncle Sam. Whereas most other deductions are off the table as of Dec. 31, contributions to Individual Retirement Accounts and Simplified Employee Pension Individual Retirement Accounts, better known as SEP-IRAs, are available up until the April 18 tax deadline. (The IRS extended the filing deadline to May 16 in some parts of the metro area, including St. Louis County, St. Charles County and Jefferson County, because of recent flooding.)

How much you can contribute depends on your age and whether you are a non-working spouse, an employee or have self-employment income. The best opportunities go to the self-employed and partially selfemployed. (You may want to keep that in mind the next time someone asks you to moonlight.)

INCOME LIMITS If neither you nor your spouse are covered by an employer plan, you can deduct IRA contributions up to the limits of $5,500 per person ($6,500 for those age 50 and over) in both 2015 and 2016.

Assuming you are in the 25 percent federal income tax bracket, putting in the max will shave your federal tax bill by $1,375. You can save on state income taxes, too.

Normally, you cannot contribute more to an IRA than you earned in a year, but there is an exception for non-working spouses. If one spouse earns at least $5,500 ($6,500 if 50 or older), but your combined “modified adjusted gross income” is less than $98,000, you can get the full deduction for the other spouse’s IRA contribution. (Modified adjusted gross income is your AGI, plus any deductions or credits you had subtracted for tuition, student loan interest payments, tax-exempt bond interest and a few other relatively rare deductions, credits and income exclusions.)

You can claim a partial federal income tax deduction for the nonworking spouse’s contribution if your joint income is below $118,000. Once joint income exceeds that amount, you can contribute to a spousal IRA, but you cannot deduct the contribution.

For singles who are covered by workplace plans, deductions get restricted after earning $61,000 and are eliminated completely once modified adjusted gross income hits $71,000.

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SELF-EMPLOYED The real juicy retirement plan deductions go to people who are selfemployed, or have at least some selfemployment income. They can contribute up to 25 percent of their selfemployment income to a maximum of $53,000 in 2015.

If you have both a day job and selfemployment income, you can contribute up to 25 percent of the selfemployment income, in addition to making contributions to your employer plan. The maximum contribution limits are viewed separately, so your maximum annual limit is the sum of the two, adds Mark Luscombe, principal analyst with Wolters Kluwer Tax & Accounting.

If you are lucky enough to be raking in serious money from a side gig, the tax savings could be stunning. Consider a hypothetical taxpayer who contributes the maximum $18,000 to his employer plan, while earning $300,000 from his side Internet business. He can contribute $53,000 to his SEP and the current 401(k) maximum of $18,000 to the employer plan, Luscombe says.

That combination reduces his taxable income by a whopping $71,000, saving him $24,850 in federal income tax. (That assumes that he is in the nation’s top income tax bracket of 35 percent, which he most likely would be.)

Better yet, you do not have to make SEP-IRA contributions until your tax filing deadline, including extensions.

So if you do not have the cash for a full contribution today, file a form 4868, which is an “Application for Automatic Extension of Time to File.”

This gives you until Oct. 15 to file your return and fund your SEP-IRA contribution, no questions asked.

Getting more time to file and make SEP-IRA contributions does not mean that you have more time to pay your regular income taxes. Make sure that you do a good estimate of how much you will owe with your 2015 return. Send any balance due in with your extension request to avoid underpayment penalties.

POST-DISPATCH BUSINESS STAFF ROLAND KLOSE

Business editor

314-340-8128

GREGORY CANCELADA

Assistant business editor

314-340-8330

JACOB BARKER

Energy and environment

314-340-8291

LISA BROWN

Retail, consumer products and marketing

314-340-8127

TIM BRYANT

Real estate and construction

314-340-8206

JIM GALLAGHER

Personal finance and corporate affairs

314-340-8390

SAMANTHA LISS

Business of health

314-340-8017

DAVID NICKLAUS

Business columnist

314-340-8213

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

THE BOTTOM LINE Nearly every presidential candidate this year has been bashing trade agreements. David Nicklaus and Jim Gallagher discuss the advantages of trade and the consequences of a turn toward protectionism on this week’s edition of “The Bottom Line.” stltoday.com/watch

-215.79 17,576.96

SOURCE: Reuters

Nasdaq

-63.85

4,850.69

TIPS can offer some protection, but be aware of the risks

BY LINDA STERN Reuters

With gasoline still selling at around $2 a gallon, food prices relatively flat and Wall Street bond traders betting on 1.5 percent annual inflation as far as the eye can see, it may seem like the wrong time to worry about rising consumer prices.

But some voices — including a few at the policy-setting Federal Reserve — are suggesting consumer inflation could take off faster than expected.

If oil reverses its recent steep decline and wages begin to move up in response to a tighter labor market, inflation could once again become a factor for investors to reckon with.

Some investors already are preparing for that reckoning.

Some big financial firms, including BlackRock Inc., are telling their clients to hedge against inflation by buying funds that hold Treasury Inflation Protected Securities, or TIPS. These bonds, along with consumer-facing I-Bonds, peg some of their interest to the Consumer Price Index (CPI). So as inflation speeds up, holders of those bonds earn enough interest to keep up with it.

Investors have poured $2 billion in new money to TIPS exchange-traded funds in the last 16 weeks.

That may be an obvious bet: Currently, 10-year TIPS are priced, relative to plain vanilla Treasuries, in a way that would reward investors should CPI inflation over the next 10 years top 1.57 percent. The Federal Reserve is targeting 2 percent inflation over next two years.

That makes TIPS seem like a slam dunk. With New York oil futures trading at around $38 per barrel, it is hard to imagine a world where U.S. consumer prices will not rise by more than 1.57 percent.

But think twice before you jump in with both feet — and your retirement account. The following are some of the downside risks you take when you bet on inflation with TIPS:

PROTECTION IS LIMITED TIPS funds may jump quickly in value if investor sentiment starts to reflect big inflation expectations, but they rarely reward investors over time for sustained inflation. At best, they merely pace the CPI with a lag, so you can protect the amount of money you have in a TIPS fund from the effects of a rising CPI. They are not going to overcompensate.

To hedge against a big and sustained pickup in prices, you are better off investing in stocks of companies that really jump during times of inflation, such as energy and real estate. Since 1970, the stock market sectors that have performed best during months of rising consumer prices are energy, information technology, materials and health care, according to Sam Stovall of S&P Global Market Intelligence.

THERE IS A WORST-CASE SCENARIO Like all other bonds, I-bonds lose value when interest rates go up.

Should interest rates rise faster than inflation does — expanding what economists call “real rates” — holders of TIPS may get slammed.

And because their bonds currently are lower-yielding than Treasuries of comparable maturities, they will become less valuable as rates rise, and not be cushioned by any rising-CPI payouts.

YOU HAVE TO PLAN AROUND A TAX HIT Even if you hold your TIPS and TIPS funds for years and years, you will be liable for federal income taxes on the income you earn every year, including the increase in value of the bond should rates fall.

That means that if you decide to invest in them, you should do so from within a tax-favored account, such as an individual retirement account or 401(k).

YOU MIGHT BE BETTING WRONG

MARKETS • WEEK IN REVIEW Dow Jones

buffer for inflation?

S&P 500

-25.18

2,047.60

MARKET WATCH: Page E5

Though TIPS currently are favorably priced, it will take a global economic surge and a recovery in oil prices before there is any big jump in inflation, according to Dan Shackelford, portfolio manager of the T. Rowe Price Inflation Protected Bond Fund.

“I don’t think we’re in the midst of a forced march to higher inflation anytime soon,” he said.

BUSINESS

04.10.2016 • Sunday • M 1

ST. LOUIS POST-DISPATCH • E3

Can’t pay or can’t pay yet? No need to panic GALLAGHER • FROM E1

returns in order to do their state returns.

So the Missouri Department of Revenue also extended the deadline for state income taxes in those same counties.

WHAT IF YOU DON’T FILE AT ALL? Filing is a hassle, so why don’t we just blow it off?

That’s cool — as long as you don’t owe the IRS any money. They’ll hold your refund for three years. If you don’t file by then, the government keeps it.

So, if you haven’t filed your 2012 taxes, you have until April 18 to fess up and file, or your refund goes poof.

“You could very well be leaving money on the table,” said Laurel Ruhmann, an enrolled agent with H&R Block in Fairview Heights. (Enrolled agents have passed muster with the IRS and can represent people in tax disputes.)

The government makes a mint because of taxpayer laziness. In Missouri, the IRS is sitting on nearly $20 million owed to nearly 23,000 taxpayers who never filed.

In Illinois, it owes nearly $39 million to 40,000 people.

“There is no penalty for filing a late return if you’re due a refund,” said IRS Commissioner John Koskinen in a press release.

Of course, you won’t know if you owe the IRS unless you fill out the tax forms.

If you owe taxes and don’t file, Uncle Sam becomes Vinny the Loan Shark. The penalty for not filing at all is 5 percent of the unpaid taxes per month, up to a maximum of 25 percent, and interest on the unpaid amount.

WILL THE IRS NAB YOU? Forgetting to file isn’t a crime. But refusing to file with intent to cheat the government can land you in jail.

Of course, the IRS may never catch you.

If you live purely in the all-cash economy, or launder your income through Panama, you might get away with not filing, if nobody squeals. (Swiss bankers have turned stool pigeon.)

The government gathers data on your income from employers, banks, investment firms, pensions and other institutions that pay you money. If you did freelance work for a business, the business is supposed to report your pay to the IRS even if you weren’t an employee.

The IRS takes that data and goes looking for a tax return to match it to. If there’s no form filed, they’ll send you a letter. It’s best not to ignore the letter. If you do, the IRS will figure a tax bill for you. Since the IRS doesn’t know your deductions, the bill will probably be more than you really owe.

The IRS uses the U.S. mail to contact taxpayers. It almost never phones a taxpayer. A phone call from someone claiming to be an IRS agent and demanding money is a scam.

THE LAZY MAN’S EXTENSION Procrastinators everywhere can get a sixmonth extension on the deadline by filing IRS form 4868 — Application for Automatic Extension for Time to File. That stretches the filing deadline to October.

ASSOCIATED PRESS

Music producer Alexandre Cardinale makes sure his tax returns truly made it into the mailbox in this 2010 photo from Los Angeles.

You can find it at IRS.gov.

The upside for the lazy: The form is only nine lines long. The downside: It’s an extension for filing, not for paying. You’ll still have to estimate the taxes due. If you owe, you still must pay by April 18, extension or not, or face a penalty.

There are a lot of procrastinators around. About one-third of Missouri and Illinois residents still hadn’t filed their taxes by March 25. The IRS expects that 181,000 people will request an extension in Missouri, the “State of Ennui.”

A federal extension automatically grants you a Missouri state income tax extension.

Just include the federal extension form when you file. But if you owe the state, you still have to pay by April 18 and file form MO-60 to avoid penalties.

Illinois also grants an automatic sixmonth filing extension. But people who owe the state must pay on time and file form IL-505-I — Automatic Extension Payment.

(For details, turn to page 2 in this section.)

The IRS will answer simple tax questions on the phone, but it’s tough to get through to someone. They’ll also answer in person at taxpayer assistance centers

IS IT TOO LATE TO CUT MY BILL? Maybe not. Contributions to Individual Retirement Accounts are deductible under certain circumstances. You can make a contribution for last year up to April 18.

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From David Nicklaus’ blog about St. Louis business. STLtoday.com/moundcitymoney Stadia picks 5 • Stadia Ventures has chosen five early-stage companies for the second cohort of its sports business accelerator program.

The firms are innovating in everything from gambling to broadcasting to fitness.

Their founders will come to St. Louis for six three-day mentoring and business development sessions over the next 12 weeks, and Stadia will invest up to $100,000 in each company.

Stadia was founded last year and concluded its first accelerator class, with four companies, in December.

Its five new portfolio companies are: • Behind the Picks, a Scottsdale, Ariz., company that created an algorithm for sports betting.

• EZ Waves, a Charleston, S.C., firm that offers an Uber-like app for scheduling boat and equipment rentals.

• Leaguer, based in New York, a commerce and communications hub for recreational sports leagues.

• Meridix, of Naperville, Ill., a platform that allows anyone to live-stream a sports event using a smartphone.

• Senaptec, a Beaverton, Ore., company that has software and hardware to assess an athlete’s visual and sensorimotor skills.

(04.06) SixThirty gains international flavor • SixThirty, the financial technology accelerator in downtown St. Louis, is gaining an international reputation.

Of the five companies chosen for this spring’s accelerator class, three have founders from outside the U.S. Atul Kamra, managing director, said 38 percent of the 167 applicants came from foreign countries.

SixThirty, founded in 2013, invests up to $100,000 in each company it selects. It brings the founders to St. Louis for 14 weeks of training, mentoring and networking.

The latest class brings to 24 the number of companies SixThirty has invested in.

Companies from Scotland, England and Australia have participated in past classes.

Here are the companies in the spring class: • BondIT, founded in Herzliyya, Israel, provides information and recommendations to bond investors.

• CheddarGetter, of Bloomington, Ind., provides billing software.

• Just Cash, based in Hollywood, Fla., and Toronto, has developed technology that lets

www.newfb.com 636-940-8740

Android is a Trademark of Google Inc.; iPhone and iPad are registered trademarks of Apple Inc.

MOUND CITY MONEY people use mobile phones to access ATMs and point-of-sale terminals.

• LendingFront, from New York, offers smallbusiness lenders an efficient way to monitor businesses’ cash flow.

• S4, founded in Buenos Aires, uses satellite images and data analytics to help its customers, including insurers and large food companies, predict crop yields. S4 cofounder Tomás Peña opened a U.S. headquarters in Creve Coeur last year after participating in the Yield Lab agribusiness accelerator.

SixThirty was founded by entrepreneur Jim McKelvey with help from Cultivation Capital and the St. Louis Regional Chamber. It is based in the T-Rex building on Washington Avenue. (04.06) RiverVest opens San Diego office • RiverVest Venture Partners, a venture capital firm based in Clayton, has opened a San Diego office and added Nancy Hong as managing director there.

Hong, who has a doctorate in molecular and cell biology, previously was a principal at BioMed Ventures.

The firm also said Niall O’Donnell, another managing director, will split his time between the Clayton and San Diego offices. RiverVest has made 10 investments in the San Diego area over the past decade.

RiverVest, founded in 2000 to make early-stage investments in life-sciences companies, has $290 million of assets under management. It opened a Cleveland office in 2008.

In addition to Hong and O’Donnell, RiverVest’s managing directors are Thomas Melzer, Jay Schmelter and John McKearn.

(04.07) Missourians fail financial literacy • Missouri Treasurer Clint Zweifel and the Missouri Bankers Association are evaluating the way personal finance is taught in the state’s high schools, and they may have reason to be concerned.

Missourians’ scores ranked dead last on an online financial literacy quiz administered

by WalletHub, a personal finance website.

The 30 questions range from basics like compound interest and car insurance to complex matters like how credit scores are determined.

Zweifel’s initiative, then, sounds timely.

Missouri has required high school students to take a personal finance class since 2006, but the treasurer thinks the curriculum needs an overhaul. (04.05)

Jim Gallagher • 314-340-8390 jgallagher@post-dispatch.com

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WHAT IF YOU CAN’T PAY? File anyway, and pay what you can. The IRS will bill you for the rest. It charges interest per month on unpaid balances.

You can set up an installment payment plan online at IRS.gov, or by calling 1-800-829-1040. The IRS won’t take any nasty collection actions — such as filing liens on property — as long as a payment plan is in effect.

Missouri and Illinois also offer installment plans.

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Alliance Credit Union Call for nearest location NA NA 0.21 0.36 0.56 0.66 0.86 1.16 1.81 866-362-0237 www.alliancecu.com NA NA 1,000 1,000 1,000 1,000 1,000 1,000 1,000 Specials: Rate Bump available on 3, 4,& 5 yr terms. www.alliancecu.com EverBank 8300 Eager Road, Suite 700 0.25 0.61 0.73 0.81 1.02 1.09 1.15 1.35 1.75 888-900-6553 www.EverBank.com 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 Specials: 6 month bonus interest rate on eligible accounts - Call Today!

St. Louis Bank 14323 S. Outer Forty Road 0.05 0.30 0.10 0.15 0.40 0.45 0.65 0.90 1.35 888-963-3502 www.stlouisbank.com 100 10,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 Specials: For a complete list of our current rates: www.stlouisbank.com Legend: Rates effective as of 4/8/16 and may change without notice. All institutions are FDIC or NCUA insured. Rates may change after the account is opened. N/A means rates are not available or not offered at press time. Yields represent annual percentage yield (APY) paid by participating institutions. Fees may reduce the earnings on the account. A penalty may be imposed for early withdrawal. Banks, Thrifts and credit unions pay to advertise in this guide which is compiled by Bankrate.com®, a publication of Bankrate, Inc. © 2016. To appear in this table, call 888-768-4243. To report any inaccuracies, call 888-509-4636. • http://stltoday.interest.com

Savings and Loan Rates U.S. RATES

BEST BASIC CREDIT CARD DEALS

These were the highest yields available among U.S. banks These were the best standard credit card deals available surveyed by Bankrate.com® as of Tuesday: amongU.S.bankssurveyedbyBankrate.com® asofTuesday: MMA/Savings account Silvergate Bank iGObanking.com Barclays Ally Bank My Savings Direct

Phone

Min. to Yield earn int. (APY) Carry balances

Phone

Annual Annual Grace % rate fee period

800-353-6436 $ 10000 888-432-5890 25000 888-720-8756 0 877-315-2559 0 877-752-1919 1

1.11 1.10 1.00 1.00 1.00

Amalgamated Bank of Chicago Citizens Trust Bank Westfield Bank, FSB Simmons First Natl Bank

877-484-2372 $ 877-738-6391 855-512-0989 800-735-2465 888-432-5890

5000 1000 1500 5000 1000

1.35 1.26 1.26 1.26 1.25

Citizens Trust Bank Westfield Bank, FSB Simmons First Natl Bank Amalgamated Bank of Chicago

877-484-2372 $ 888-873-3424 888-720-8756 855-255-1176 888-728-3151

5000 1000 0 500 2500

2.15 2.07 2.05 2.05 2.00

Rates are for standard credit cards, and information applies to purchases only. Cash advances frequently are charged interest from the date of transaction. Additional fees may be charged such as for exceeding a credit line, making an ATM transaction, or if a check is returned.B=Billing,T=Transaction,P=Posting,V=Variablerate,F=Fixed.

1-year CD

800-723-0303 404-659-5959 800-368-8930 800-636-5151

7.75 V 9.50 V 10.49 V 10.50 V

37 0 0 0

25 25 25 25

B B B B

404-659-5959 800-368-8930 800-636-5151 800-723-0303

9.50 V 10.49 V 10.50 V 11.00 V

0 0 0 0

25 25 25 25

B B B B

Pay off balances

Colorado Federal Savings Bank AloStar Bank of Commerce My e-BAnC by BAC Florida Bank California First National Bank iGObanking.com

For more information visit www.bankrate.com

5-year CD Colorado Federal Savings Bank First Internet Bank of Indiana Barclays Nationwide Bank Discover Bank

Best Loan Rates

Deposit Trend

ST. LOUIS RATES

NATIONAL YIELD

These were the lowest loan rates available among St. Louis- National average is based on 100 largest institutions in area institutions surveyed by Bankrate.com® as of Friday: the top 10 U.S. markets.

Home equity loan U.S. Bank Commerce Bank

Phone

Rate

800-872-2657 800-453-2265

4.49 5.85

800-432-1000 888-415-3279 800-872-2657

2.49 3.25 3.37

800-432-1000 800-872-2657 888-415-3279

2.74 2.77 3.25

0.25

0.15 0.10 0.05

Used car Bank of America U.S. Bank First FSB of Mascoutah

1-Year CD National Trend

0.20

New car Bank of America First FSB of Mascoutah U.S. Bank

0.30

0.00

6-Jan 13-Jan 20-Jan 27-Jan 3-Feb 10-Feb 17-Feb 24-Feb 2-Mar 9-Mar 16-Mar 23-Mar 30-Mar 6-Apr

Source: Bankrate.com 2016

Home equity loan: fixed rate, 5-year term, secured loan based on $30,000 at 80% LTV; New car: $28,000 fixed rate, 48-month term, 10% down payment; Used car (3 years old): $15,000 fixed rate, 36-month term, 20% down payment.

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BUSINESS

E4 • ST. LOUIS POST-DISPATCH

M 1 • Sunday • 04.10.2016

New gates expected to handle 12 flights per day SOUTHWEST • FROM E1

garnered roughly half the market share.

Southwest, which occupies all of Terminal 2, begins flights Tuesday to Wichita, Kan., and to Des Moines, Iowa — new nonstop destinations from Lambert — as well as year-round service to Seattle.

Gates E31 and E37 initially are expected to handle 12 flights a day between them, a number expected to grow to 16 in June when Southwest adds flights to Oakland, Calif., Cleveland and Portland, Ore. The new flights will result in more than 100 daily departures to more than 40 nonstop destinations from St. Louis for the first time for Southwest, said Dan Landson, an airline spokesman, by email.

“We are focused on making sure that we’re successful with the newest additions,” he said. “Our teams are always watching what the current trends are and where the demand is to determine if there’s a need for a new nonstop destination.”

Southwest began service to Pittsburgh last month, replacing a nonstop flight from St. Louis that American Airlines ended in December.

Passengers waiting at the new gates will get a new kiosk of airport sundries such as snacks and magazines, and a bar with grab-and-go food. Plans are in the works for a sit-down restaurant in that part of the airport, too.

About $200,000 in renovations were made to that part of the airport, including switching out carpet with tile in the hallway and updating restrooms. That money will be recouped through rental fees paid

by Southwest.

CRISTINA FLETES • cfletes@post-dispatch.com

Southwest pilots Adam Travis (left), of Phoenix, and Joe Barnett, of Scottsdale, Ariz., rest between flights in Terminal 2 of Lambert-St. Louis International Airport on Monday.

Southwest is adding two gates — and the pilots quipped that their favorite spot to relax would soon be discovered once the gates opened.

Years ago, international flights operated at that part of Terminal 2, which was previously known as the East Terminal. Gate E29, in the same area as the new gates, still handles inbound flights from other countries — passengers go directly downstairs to customs.

And the airport is still pushing for European flights, which disappeared with TWA. American Airlines ceased its hub

operations here through a series of cuts after absorbing the bankrupt airline in 2001.

Hope again looms that such flights could return. Lambert is on a short list to get flights to London on British Airways and to Frankfurt, Germany, on Lufthansa, Hamm-Niebruegge said.

Lambert came close to securing a London flight a few years ago on British Airways, but was beat out by the Austin-

401(k) fortune is major target for advisers FIDUCIARY • FROM E1

clients when advising on retirement assets, such as Individual Retirement Accounts and 401(k)s. That means they must place their clients’ interest above their own.

Right now, most financial advisers don’t have to do that — which may surprise some clients.

It’s a major shift in the business, and here’s what it might mean: • It makes it much easier for clients to win judgments against brokers who became richer while clients got poorer.

• It will partly upend a system in which many investment brokers get paid mainly on commission.

• It will quicken the trend toward brokers charging clients a yearly percentage of their assets, rather than commissions on their trading.

• It may, or may not, make it harder for clients with just a few thousand dollars in savings to get advice from a broker.

That may push more savers toward fastgrowing “robo-advice” services, providing cheap guidance based on computers.

• It may improve the advice that larger clients receive by lessening conflict of interest.

The stakes are enormous. Investors hold $7.3 trillion in IRAs. Annuities total $1.9 trillion. Employees have an additional $6.7 trillion in 401(k)s and other job-based retirement accounts, according to the Investment Company Institute.

That 401(k) fortune is a major target for financial advisers. As workers retire or switch jobs, advisers pitch them to move the money into IRAs, where advisers can collect fees.

“It’s a gold mine,” said Michael Guillemette, an assistant professor of financial planning at the University of Missouri-Columbia.

Investment firms fought hard against the new rules. But there was a mild sigh of relief on Wall Street when the final version was announced Wednesday. The department eased some rules it proposed last year.

Advisers won’t be declared fiduciaries until next April, and they won’t have to comply with all the rules until 2018.

That means a new president can undo what Obama’s Labor Department has done.

The revision allows retirement plan sponsors and brokers to provide investor “education” — brochures, seminars, media appearances — without being fiduciaries, as long as they don’t recommend a specific investment.

Advisers won’t have to sign new contracts with their existing investors, and they can still recommend their own firms’ house-brand annuities and mutual funds.

“It’s softer than many advisers and brokers thought,” Guillemette said.

“They listened to the industry and worked with them.”

Stock prices for investment firms rose after the announcement.

But the basic change remains — advisers must make recommendations solely in their clients’ interest, not the advisers’. Under current rules, most advisers are held to a lighter “suitability” standard.

For instance, they can’t recommend that a retiree put his life savings in a handful of volatile tech stocks. That’s too risky for an older investor.

But an adviser can recommend a mutual fund or annuity that pays a fat commission for the adviser, when a cheaper option would be better for the client.

A fiduciary standard is a “huge difference,” said Jerry Schlichter, a St. Louis lawyer who sues brokers and retirement plans on behalf of investors. “It is the

highest duty under the law.”

It’s also good news for plaintiffs’ lawyers. It’s easier to show that an investment wasn’t the best available than to show it was unsuitable.

The new rules apply only to retirement accounts — 401(k)s, IRAs and the like. The Labor Department has jurisdiction over those.

Taxable investment accounts aren’t included. The Securities and Exchange Commission has jurisdiction there, and the SEC hasn’t acted.

CONFLICT OF INTEREST The Obama administration is trying to fix what it claims is an expensive conflict-of-interest problem for investors: What’s best for the client isn’t always best for the broker or insurance agent.

Financial advisers get paid more for selling some investments than for others. Put a client in a commission-based mutual fund and an adviser might make 4 percent. Sell a variable annuity, and the commission can be 7 percent. Sell a non-traded real estate investment trust and the broker’s take can be 10 percent.

Put a client in the investment firm’s own house-brand mutual fund, and the firm will make money on management fees.

Tell the client how to buy a no-load mutual fund on his own and the adviser won’t get paid at all — unless he charges an hourly fee, which some do.

Not all of this is visible to the client. The client might see the commission on a stock or mutual fund trade.

Less visible is the “12b-1” marketing fee paid from mutual fund assets and used in part to reward the selling brokerage.

Unless they read deeply into disclosure documents, clients don’t see “revenue sharing” — the payments mutual fund companies make to brokerages for putting lots of client money in their funds.

The commission on an annuity is often invisible.

Schlichter said he once had a 90-yearold client who was sold a variable annuity. “That’s a long-term investment vehicle for someone who’s 90 years old.

There’s no question that’s not in the investor’s best interest,” he said.

The Obama administration says these conflicts distort advice. In a report last year, it claimed that such conflicts lower investment returns by 1 percent a year, costing savers $17 billion annually.

The investment industry disputed that study.

The Labor Department’s solution is complicated. On one hand, advisers can abandon commissions and other conflicts and simply charge an upfront fee for their advice.

But they also have the option of keeping the old payment systems and signing a contract promising to act only in the client’s interest. Advisers will have to disclose how they’re compensated, point out conflicts of interest and be able to show why each recommendation is best for the client.

Keeping those conflicts creates some legal risk. How can they argue that an investment that pays a big commission was really better than one that doesn’t?

That makes fee-based accounts the better option for investment firms, Guillemette said.

“You will see a shift to more of the fee-only model, because it’s easier,” he said.

The advice industry has been moving toward fee-based accounts for years.

But they work best for bigger clients. A typical brokerage will charge 1 percent to 1.5 percent to manage a $100,000 account, with lower fees for richer clients.

In turn, the brokerage waives commissions, although some of the other conflicts remain.

At least until now, fee-based accounts

haven’t normally been offered to smaller clients. The fees would be too high. Brokers need commissions to make little accounts worthwhile.

“The person with $20,000 is being served by commission-based products,” Guillemette said.

Opponents of the rule argue that it will make brokerages shun investor small fry. The rule “will only hurt those it claims to protect, jeopardizing the ability for millions of low- and middleincome Americans to receive sound investment advice,” said Rep. Ann Wagner, R-Ballwin.

Ron Kruszewski, CEO at the St. Louis-based Stifel Financial, the parent of brokerage Stifel Nicolaus & Co., worries that Wagner is correct.

“While the rule is new, I continue to believe that all the additional disclosures and burdens and potential liabilities will result in limiting advice to small investors,” he said.

Wagner led a successful effort in the House to pass a bill abolishing the fiduciary rule. Sen. Roy Blunt, R-Mo., is pushing it in the Senate. Should it pass, the bill would be vetoed at the White House.

CHANGES AFOOT Small investors may be lucky to be booted by their broker, Schlichter said.

“Is it really better for that small investor to get advice that’s not in his best interest?” he asked. “Is that better than requiring brokers to act in the best interest of clients?”

Brokers like to sign up young investors without much money, figuring that the accounts will grow as the owners get older. They may find a way to fit the small fry in.

Starting this summer, Edward Jones, the giant Des Peres-based brokerage, will offer a fee-based account with a minimum of $5,000. Clients can confer with advisers who will recommend mutual funds and exchange traded funds.

Bill Fiala, Edward Jones’ principal for investment advisory, said the account is partly a response to the fiduciary rule, but it is mainly a reaction to research showing how investors want to pay for advice. The fee for the accounts hasn’t been set, he said.

Small investors also are prime customers for the growing flock of roboadvisers. Firms such as Betterment and Wealthfront pioneered offering lowcost investment management using computer programs. They use questions on age, goals and risk tolerance to match clients with investments.

Bigger investment firms, such as Charles Schwab and Vanguard, have their own robo offerings. For clients with $50,000, Vanguard offers a robo service that includes a chat with a human adviser.

Some think the fiduciary rule will push the entire industry toward offering lower-cost investment options — such as index mutual funds with tiny expense ratios.

“It is going to be harder to justify actively managed mutual funds,” said Guillemette, citing research showing that low-cost funds linked to a stock index usually perform better.

And making the switch to lower cost funds is “easier from a liability standpoint,” he said.

But the Labor Department went out of its way to note that the goal is better investments, not necessarily cheaper ones.

“Best interest does not mean the lowest-priced product,” Labor Secretary Thomas Perez told reporters.

Jim Gallagher • 314-340-8390 jgallagher@post-dispatch.com

Bergstrom International Airport in Texas.

The airline had stressed that the market it chose would need to support selling its more lucrative business-class seats.

A factor in British Airways’ decision was that Austin showed a stronger economy, Hamm-Niebruegge said.

So Lambert is working to highlight economic growth in St. Louis in areas such as technology and bioscience. Airport officials are set to meet this summer with British Airways and Lufthansa to make a pitch to bring them to Lambert.

The airport also is working to attract and retain airline service in other ways, including by reducing its landing fees, which are based on the weight of an inbound aircraft and paid by airlines.

Between the costs of a new, $1 billion runway built to accommodate busy days of the past, and the loss in past years of flights using larger jets, Lambert had seen the landing fees it charged roughly triple since 1999.

On Wednesday, the airport commission approved plans to make Lambert more cost-competitive, including cutting landing fees by about 1.8 percent from last year, resulting in a 5 percent drop since 2012.

Hamm-Niebruegge said larger planes landing at Lambert recently, including the Airbus 321 planes flown by Frontier Airlines and Southwest’s Boeing 737s, and the addition of new destinations are bringing in more revenue.

“That’s allowing our cost to go down and lower our landing fees,” she said.

Leah Thorsen • 314-340-8320 @leahthorsen on Twitter lthorsen@post-dispatch.com

Proverbial little guy should still be able to get financial help NICKLAUS • FROM E1

Under the existing rules, they weren’t always getting that. As long as an investment was broadly suitable, many investors got the product that was most profitable for the broker instead of the one that was best for them.

That has to end under final rules published Wednesday by the Labor Department. The rules require retirement-account advisers to act as fiduciaries, which means they must always act in the client’s best interest.

The final rules make some concessions to the financial industry, which fought the fiduciary standard for years. The Labor Department gave firms longer to comply, and it eased some disclosure and paperwork requirements.

Still, some firms’ traditional business models face a big challenge. High-commission annuity sales and kickbacks from mutual funds will be allowed, but they must be justified under the best-interests standard.

That may be difficult — or, at any rate, the higher standard may make firms’ compliance departments nervous. Michael Wong, an analyst at Morningstar, says at least $2.4 billion of revenue is at risk.

That includes commissions and surrender fees on variable annuities and fixed-index annuities, commissions on alternative assets like hedge funds, and revenue-sharing payments that mutual funds make to brokers.

He sees retirement money flowing into low-cost index funds and exchange-traded funds, and out of annuities sold by insurance companies.

Winners and losers are already becoming apparent.

“We have already seen tens of billions of dollars of market capitalization shift among different firms in the wealth management sector because of this rule,” Wong said.

Jamie Hopkins, who teaches retirementinvesting classes for advisers at the American College of Financial Services in Bryn Mawr, Pa., says the Labor Department’s final rule addressed some of firms’ biggest gripes about earlier versions.

“People have stopped complaining about being under a fiduciary standard and started looking at this as something we can implement,” Hopkins said.

Brokerage firms — and their legislative allies such as Rep. Ann Wagner, R-Ballwin — have claimed that the rule would hurt investors of modest means. They argued that small accounts would become unprofitable, and that advisers who served them would be forced out of business.

“You never know if that’s a legitimate risk, or if that’s just a threat you hear from people who are against change,” Hopkins said.

“Could some business models not be able to support lower-income clients? That’s a possibility. I do believe that there will be companies out there whose business models still serve that market.”

One example might be Edward Jones, which is piloting a fee-based account for people with as little as $5,000 to invest. Others would include the online advisory services offered by Charles Schwab, Vanguard Group and others.

So the proverbial little guy can still find retirement advice in this new world order. If he can no longer get advice from some people who were in the business before, it’s no great loss. Conflicted advice from sellers of highcost products was almost certainly doing more harm than good.

The evolving U.S. retirement system requires workers to make investment choices that once were handled by company pension managers. At long last, workers can be assured of the honest advice they need to make those decisions.

David Nicklaus • 314-340-8213 @dnickbiz on Twitter dnicklaus@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

SUNDAY • 05.29.2016 • E

BAYER OFFER NEEDS BACKING Antitrust concerns in Monsanto pursuit call for pledge of breakup fee DAVID NICKLAUS St. Louis Post-Dispatch

Price isn’t the only disagreement separating Bayer the eager suitor from Monsanto the reluctant target.

The two companies also appear to differ on how their combination would be viewed by

antitrust regulators around the world. Bayer’s chief executive, Werner Baumann, told reporters Monday that he saw no regulatory problems for a deal. Bayer’s head of crop science, Liam Condon, added, “It is full confidence here in our ability to consummate the transaction from an antitrust point of view.”

Monsanto isn’t convinced.

When he rejected Bayer’s offer on Tuesday, Monsanto CEO Hugh Grant raised two objections: The

Regulatory mix pushes Dynegy to idle plants

$62 billion price was too low, and Bayer was being too glib about its ability to push the deal through.

The proposal “does not adequately address or provide reassurance for some of the potential financing and regulatory execution risks,” Grant said.

Joe Terril, president of investment firm Terril & Co. in Sunset Hills, reads Grant’s statement as a request for a breakup fee. “I would imagine they’re asking for a pretty good breakup fee, maybe

more than Bayer is willing to give,” Terril said.

Such fees cost nothing if a deal goes smoothly, but several would-be sellers have collected them. This month, Halliburton paid $3.5 billion to oil-services rival Baker Hughes after antitrust problems wrecked their merger.

AT&T paid $4 billion in 2011 after regulators nixed its purchase of T-Mobile.

See NICKLAUS • Page E3

ASSOCIATED PRESS

Corn and soybean farmer Gary Niemeyer readies his seed corn for spring planting at his farm near Auburn, Ill., in 2011.

ANNUAL REPORT • THE TOP PUBLIC COMPANIES IN ST. LOUIS

Medicaid additions keep Centene in top spot

State budget impasse stalls moving plans

BY JACOB BARKER St. Louis Post-Dispatch

When the Wood River power plant in East Alton ceases operations this week, it will mark the first in a string of plant closures that could idle 30 percent of Southern Illinois electricity capacity.

Wood River’s first unit fired up in 1954, so the 465-megawatt coal-fired plant probably didn’t have many more years left anyway. But, according to its owner, it wasn’t age or tightening regulations on coal power that prompted the November decision to shutter the plant on June 1.

While coal plants across the country are being retired due to increasingly stringent environmental rules and competition from cheap natural gas, Southern Illinois is in a unique situation.

Wood River’s owner, Houstonbased power plant operator Dynegy Inc., points to an esoteric electricity auction that it says prevents the company from recouping the costs to operate many of its downstate Illinois coal plants.

In addition to Wood River, Dynegy announced this month plans to idle 1,800 megawatts at its Baldwin and Newton coal power plants starting in September.

Newton, about 125 miles east of St. Louis, and Baldwin, less than 50 miles southeast, would each keep one power unit operating, but Dynegy says it could mothball another 500 megawatts at one of its plants. Company management indicated it hopes that can be done at Newton, which would completely shutter the plant and let the company avoid installing expensive pollution controls.

Dynegy’s announcement follows recent turmoil in the downstate electricity market. Prices skyrocketed last year, prompting complaints by Illinois Attorney General Lisa Madigan’s office that Dynegy controlled enough generation in the region to unfairly influence rates. After federal regulators ordered changes that allowed more power to be imported into Illinois, a component of electricity prices fell by half this year. Dynegy announced shortly afterward it would idle the Newton and Baldwin units.

Southern Illinois politicians, however, immediately blamed the closures on new environmental regulations from the administration of President Barack Obama.

“The Democrats’ War on Coal has threatened to devastate two more communities in Illinois with this announcement that power plants in Baldwin and Newton will be retired,” Rep. John Shimkus, RSee COAL • Page E3

PHOTOS BY ROBERT COHEN • rcohen@post-dispatch.com

This year, Centene opened the $25 million Ferguson Service Center at 2900 Pershall Road, which employs about 200 people.

‘Banner year’ stemmed from transformative acquisition in 2015

BY SAMANTHA LISS St. Louis Post-Dispatch

Jamar Hardieway, a health claims representative at Centene, works Tuesday at the Ferguson Service Center. His desk had been decorated with birthday balloons. More than 2,500 work for the company in the St. Louis area, up from the more than 900 local employees in 2012.

TOP FIVE FIRMS IN PAST FIVE YEARS 1 2 3 4 5

2016 Centene Huttig American Railcar Express Scripts Spire

2015 Centene Monsanto Reinsurance Group Caleres Emerson

2014 Centene Monsanto FutureFuel Olin Panera

2013 Monsanto Panera American Railcar Express Scripts Energizer

2012 Olin Peabody Emerson Monsanto Solutia

Centene made a key acquisition in 2015 that transformed it into the nation’s largest provider of Medicaid health care plans and doubled the number of people that the Clayton-based company covers.

While juggling the $6.8 billion deal to buy Health Net Inc., Centene also managed to beat Wall Street earnings expectations each quarter last year, recording big gains in both revenue and profit.

Michael Neidorff, CEO of the managed care company, called it a “banner year.”

Revenue for 2015 grew 37 percent to $22.8 billion, and profit swelled 30 percent to $355 million, all thanks to the addition of 1 million members across the country.

“Operationally, it was an excellent year,” said New York-based analyst Steven Halper with FBR & Co., a brokerage firm.

The strong performance allowed Centene to take the top spot among local publicly traded companies for the third straight year, according to a Post-Dispatch analysis.

The newspaper ranking is based on financial performance: return on equity, size of revenue, revenue growth and profit growth.

The Health Net deal didn’t close until earlier this year, so Centene can expect to see revenue grow by more than 60 percent in 2016. The company will be in a strong position to take the top spot again in next year’s rankings.

See CENTENE • Page E4

BUSINESS

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BUSINESS

E2 • ST. LOUIS POST-DISPATCH

M 1 • Sunday • 05.29.2016

What’s so scary about falling prices?

Growth can’t be the only way to measure success

BY JAMES SAFT Reuters

It may be time to question our common faith that the only natural and acceptable path is growth: for population, for prices and for the economy itself.

From central bank inflation targets to almost all reporting on and analysis of the economy, this assumption is built into our view of the world.

With population shrinking in Japan, close to topping out in China and with birth rates in Italy, for example, now at their lowest in its history as a modern state, growth of all sorts may be scarce, leaving us in need of a better way to frame the problem. The question may not be how to get growth, but how best to live without it, even if that brings phenomena such as falling prices, or deflation.

Take the example of Japan, which has spent decades in an increasingly expensive and acrobatic attempt to battle recession and deflation.

The textbook argument justifying all of the deficit spending and quantitative easing Japan has used as weapons against deflation is that falling prices make people defer consumption and can thus bring on a self-perpetuating cycle of shrinking prices and economic output.

Stephen Jen, a hedge fund manager and economist of SLJ Macro Partners, takes issue with this, pointing out that while Japanese GDP growth since its labor force peaked in 2000 has trailed almost all industrialized nations, output measured per worker adjusted for the purchasing power of the yen has grown at a more robust rate than in countries like Germany, New Zealand and Canada.

In other words, Japan started off well-to-do and, in terms of what individual workers can buy, has only gotten richer, all while cycling in and out of mild recessions and mild deflation. “Does Japan need to grow?

Our answer is ‘No,’” Jen and colleague Joana Freire write in a note to clients.

“If measured in terms of real GDP growth, it is far from clear that Japan, in the aggregate, needs to grow over time to improve its standard of living, if the population is shrinking.”

It is also true that, although consumer inflation has averaged only 0.3 percent annually since 1990, far below the 2 percent many central banks target, self-reinforcing deflation of a very damaging sort has not taken hold.

THE TROUBLE WITH TRANSITIONS To be sure, we don’t know what might have happened in the absence of government and Bank of Japan recession and deflation fighting. And with government debt running at something approaching 250 percent of GDP, a future of low or no growth does cause considerable transitional problems, not least — how to pay it all back.

It isn’t just our expectations that seem to be unhinged by a failure to grow. Everything else in the public and corporate world is also predicated on upward movement, from planning to investment to hiring.

Matt King, a credit strategist at Citigroup, is not sanguine about the impact of a shrinking pie, or one that fails to grow as we’ve come to expect.

“Think of the reaction to falling (and now rising) oil prices, for example. What ought just to be a redistribution of wealth between oil producers and oil consumers has turned out not to be,” he wrote in a note to clients. “Both markets and the global economy have proved an awful lot happier when prices have been rising than when they have been falling.

The same applies in multiple other spheres.”

King also points out that global corporate revenue outside of the financial sector actually shrank in 2015, a trend that extended into the most recent quarter.

The worry, in the corporate sector as at the national level, is that flagging or negative growth self-reinforces as companies try to get themselves into a profitable size for a smaller stream of customers.

All of this in large part explains the behavior of central banks, which have tried to use credit as a means to provide the growth we used to get more naturally from population expansion.

China’s opening the credit spigots in recent months is the most striking example, a tactic that definitely increased growth and calmed global markets but may well ultimately be a failure in terms of how productively the money was put to use.

Elsewhere in the developed world though, very low interest rates have not succeeded in spurring a strong revival in investment.

If population growth is waning and credit no longer works as an accelerant, the problem may not be just with our tools, but our goals.

ASSOCIATED PRESS

Shoppers choose clothes this month in Tokyo. Japan has spent decades locked in an expensive battle against recession and deflation.

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MARKETS • WEEK IN REVIEW Dow Jones

Nasdaq

S&P 500

+372.28

+163.94

+46.74

17,873.22

SOURCE: Reuters

4,933.50

2,099.06

MARKET WATCH: Page E5

Credit access frees job seekers to be more choosy

BY BEN STEVERMAN Bloomberg

Americans are back to borrowing more with credit cards. According to the most recent Federal Reserve data, they owe $952 billion, the biggest load of revolving consumer debt since 2009.

Part of the story is the same old story: Lots of cardholders still drag around debt, carrying over a balance every month and paying loads of interest. If offered a higher credit limit, many just can’t resist borrowing every extra cent, especially if they’re growing more confident about the economy. It’s tempting to think we shouldn’t be trusted with credit cards, that everyone should either pay in full every month or cut up the credit cards and use debit cards.

Sometimes, however, a credit card can come in handy — and not just when racking up rewards or buying a wider flat-screen. A new study from the National Bureau of Economic Research looked at job losses, examining how credit access affects the way Americans go about finding new jobs. It turns out that credit can often help job-seekers get back on their feet, especially those with lower income and fewer savings.

When workers lose their jobs, the study found, a higher credit limit allows them to take longer to find a new one.

The study linked up an employment database with millions of TransUnion credit reports from 2001 to 2008. It showed that a credit limit increase equal to 10 percent of a person’s prior annual salary can translate into their spending as many as three weeks more looking for a job.

Longer unemployment might sound like a bad thing, but it’s often a mistake to jump at the first job opportunity because you’re desperate for money.

When unemployed people had access to more credit, the study found, they were choosier. They ended up with better jobs a year later, both higher-paying and at larger, more productive companies.

It’s not really credit card spending that allowed people to be pickier. It’s the fact that they knew that cash was available if they needed it, giving them confidence to hold out a little longer.

“The potential to borrow affects search decisions regardless if credit lines are actually drawn down,” wrote the study’s authors, Kyle Herkenhoff of the University of Minnesota, Gordon Phillips of Dartmouth College, and Ethan Cohen-Cole of consulting firm Econ-One. For the unemployed, then, a credit card with a generous limit can work much as unemployment insurance or emergency savings do. These extra resources give them the ability to apply for jobs, network, get retrained, or even move to cities with more promising job markets.

The problem, however, with relying on credit card debt after a job loss is that banks are notorious for cutting off credit just when customers need it most: during recessions. In 2009, the average credit card limit plunged about 40 percent. So when lots of people lose their jobs, that credit card cushion can vanish.

Another question raised by the study is what credit availability means for the economy after a recession. There’s a “tension between the speed of recovery and health of recovery,” wrote the authors. “Tighter debt limits force constrained households to cut their job search short, taking relatively unproductive jobs that are more abundant.”

In other words, job-seekers and government policymakers have similar, difficult choices to make during a recovery: If people rush out to find any old job as quickly as possible, they can hurt their finances and productivity in the long run. But if they’re encouraged to wait for the right job to come along, they — and the economy — may end up stuck in a rut.

BUSINESS

05.29.2016 • Sunday • M 1

ST. LOUIS POST-DISPATCH • E3

MOUND CITY MONEY From David Nicklaus’ blog about St. Louis business. STLtoday.com/moundcitymoney April boost in local jobs • St. Louis’ on-again, off-again jobs recovery is back on.

The area gained 5,800 jobs in April, according to new seasonally adjusted figures from the Bureau of Labor Statistics, pushing employment here to a record 1,365,100.

Metro employment had peaked in January 2008 before falling by more than 80,000 during and after the recession. The area climbed back above the old peak for the first time in February.

A preliminary report for March showed a loss of 4,800 jobs, enough to push the total below the pre-recession peak. Revised numbers available on May 20, however, show a loss of only 800 jobs in March.

The new April figure means the St. Louis area has added 27,000 jobs in the latest 12 months. That’s a gain of 2.0 percent, slightly ahead of the national gain of 1.9 percent.

The local hiring has been led by the professional and business services sector, which added 8,600 jobs from April 2015 to April 2016, and leisure and hospitality, which added 7,900.

Health care firms added 3,500 workers, while financial services companies added 2,800. Totals for specific industries are not seasonally adjusted.

Manufacturing employment shrank by 2,600 over the latest 12 months, partly because of layoffs at U.S. Steel in Granite

City. Retailers employed 2,300 fewer people in April than they did a year earlier.

The BLS also reported Friday that unemployment increased slightly in both Missouri and Illinois. Missouri’s jobless rate rose to 4.3 percent in April from 4.2 percent in March, while Illinois’ rose to 6.6 percent from 6.5 percent. The St. Louis area unemployment rate, which was 4.7 percent in March, will be updated June 1. (05.20) Stadia, Dick’s team up • Dick’s Sporting Goods has developed a compact electric pump for inflating sports equipment, but Dick’s stores won’t be the first place you can buy it.

In a partnership with Stadia Ventures, a St. Louis sports-innovation firm, the Aer pump is being sold through a crowdfunding campaign on the website Indiegogo. Early contributors can order a pump for $29 (plus $15 for shipping) and can expect to get it in February, the site says.

Art Chou, a Stadia co-founder, said Dick’s brought the idea to Stadia. The retailer saw a crowdfunding campaign as an inexpensive way to do market research before shipping the Aer to its stores.

“They’re going to get feedback in advance so they can tweak features and benefits and pricing, and get an idea of what the demand is,” Chou said. “It takes a little bit of the guesswork out of your initial production run.”

The Aer, according to the Indiegogo page, runs on a rechargeable battery and can

ST. LOUIS POST-DISPATCH National St. Louis 1-year average: average:

CD

0.29 %

0.20 %

NICKLAUS • FROM E1

‘Capacity auction’ sets price for plant COAL • FROM E1

Collinsville, said in a May 4 statement, a day after Dynegy’s announcement.

But even Dynegy says it’s more complicated than that.

Every year, MISO, the grid manager for Southern Illinois, Eastern Missouri and parts of 13 other states, holds a so-called “capacity auction” that determines the price paid to power plant operators that agree to be ready to pump electricity into the grid when demand is highest.

Downstate Illinois is deregulated, so Ameren Illinois customers can shop for power from different sources. Most of MISO, on the other hand, is made up of regulated utilities such as Ameren Missouri that own both the wires and the power plants. They’re guaranteed a rate of return by state commissions.

Dynegy argues that those regulated utilities don’t rely on the capacity auctions to recover costs but can sell their electricity into a deregulated market such as Southern Illinois at low prices that depress rates.

“Mixing these two regulatory regimes together in the same capacity auction puts all generating units in Central and Southern Illinois at financial risk, regardless of fuel type, shifting jobs and the economic benefits of hosting generating plants from Central and Southern Illinois to neighboring states,” Dynegy said in a November statement announcing the Wood River retirement.

Dynegy’s solution? Move all of Illinois into the electricity market that already covers Chicago and states to the east, many of which are deregulated. That would put Dynegy on even footing, it argues. On Thursday, Dynegy said it would file legislation moving downstate Illinois into that market, known as the PJM Interconnection.

While Illinois Senate Majority Leader James Clayborne, D-Belleville, said he supported the move, the legislative session ends Tuesday. Plus, the proposal has been thrown into a swirl of energy legislation led by the state’s biggest generator, Chicago-based Exelon Corp., which is pushing a bill to prop up nuclear plants that it says are losing money and may need to close.

But the biggest obstacle to Dynegy’s plans is the year-old Illinois budget impasse that still shows little signs of resolution.

“We’ve had discussions over the course of the past couple of years, and certainly Ex-

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

elon has been trying to do similar things,” Dynegy CEO Bob Flexon told analysts earlier this month. “I have to say, though, it hasn’t gotten much traction. The state is preoccupied with budget issues and infighting, while the utilities to the west are just taking over the generation responsibilities for the state of Illinois.”

Critics say a move to PJM, where electricity prices are higher, would essentially be a subsidy for Dynegy’s plants.

None of the market dynamics should be a surprise to Dynegy, they add. Dynegy acquired many of its Illinois plants from Ameren Corp. in 2013 in a transaction where Ameren essentially gave the plants away, asking only that Dynegy take on the plants’ debt.

“Nobody’s changed anything since Dynegy bought the plants,” said Howard Learner, executive director of the Chicago-based Environmental Law and Policy Center. “I get it, Dynegy is trying to maneuver around to maximize profits.

But the notion that it’s somehow unfair because they were shocked to find out the plants were in a competitive market, come on.”

The pressure on Dynegy plants is likely to get even more pronounced as Ameren’s transmission subsidiary finishes large projects in Illinois that will allow more electricity to be imported into the state, said UBS Investment Research analyst Julien Dumoulin-Smith.

“The lowest cost outcome in this instance is simply relying on other states to provide the power,” he said. The question becomes: “Do you want to support in-state coal plants or do you just want to say, ‘Let’s just buy from elsewhere.’”

Dynegy will have to contend with opposition from Madigan’s office, which says “Dynegy’s legislative proposals could cost Illinois ratepayers hundreds of millions of dollars a year.”

Ameren, too, opposes a move to PJM. “We have serious reservations about the legality of the proposal and the cost implications for customers,” Ameren Illinois President Richard Mark said in a statement. “Our initial review indicates that a move like this could cost our customers hundreds of millions of dollars.”

While Dynegy has three years to redeploy the coal units it is mothballing, analysts at Guggenheim Partners wrote this month that they saw a move to PJM as unlikely.

“If history is any precursor, these units will likely move from mothball status to permanent shutdown,” Guggenheim wrote in a May 4 research note.

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

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If Bayer’s executives really have no doubt about winning regulatory approval, they should be willing to risk a few billion dollars to ease Monsanto’s concerns. Antitrust experts, though, think the German company is glossing over some very real issues.

For starters, Monsanto and Bayer have the first- and second-ranked cotton seed brands in the U.S. Bayer acquired its cotton business from Monsanto in 2007 as part of a previous antitrust case. If the Justice Department wouldn’t let Monsanto own both top brands then, it probably won’t let Bayer own them now.

Another concern is that Bayer’s Liberty herbicide and LibertyLink corn, soybean and canola seeds are the most direct competitors to Monsanto’s Roundup and Roundup Ready. In both systems, the seeds are genetically modified so they can survive application of the company’s weedkiller.

“One of the worst things you could do is to link Liberty and Roundup in the same company,” said Peter Carstensen, a law professor at the University of Wisconsin and leading agricultural antitrust expert.

“There’s no incentive for somebody to develop a third alternative.”

At the very least, then, regulators may force Bayer to sell its cotton business, a herbicide-seed pairing and a line of vegetable seeds, another business where the two companies would dominate.

No amount of divestitures, however, can address a broader concern about growing agribusiness concentration. Bayer’s offer comes on the heels of two other megadeals: a merger between DuPont and Dow Chemical and ChemChina’s acquisition of Syngenta.

In crop chemicals, Bayer and Monsanto control 32 percent of the world market.

The top four companies — Bayer-Monsanto, Syngenta, Dow-DuPont and BASF — would control nearly 90 percent.

That means regulators can’t view each deal in isolation. “These are irreversible consolidations, which is why one hopes the government will look carefully at the big picture,” Carstensen says.

Monsanto is right to insist on a breakup fee. The regulatory risks are real, and the time and attention spent on a busted merger would be costly. If Bayer truly sees an easy path to approval, it’s time to back that confidence with cash.

National St. Louis

New car average: average: loans 4.19 % 3.29 %

CD & Deposit Guide

MMA/Savings account

Cotton seeds, herbicides are overlapping areas

Chou said the Aer launch is part of another new business line called Stadia First Look. He said the firm is discussing other product launches with both retailers and manufacturers.

The Indiegogo campaign for Aer launched Monday with a goal of raising $30,000. As of Tuesday afternoon, the site showed $1,077 worth of orders. (05.24)

fully inflate 40 balls on one charge. It has a retractable needle and standard settings for a basketball, football, soccer ball or volleyball.

Stadia Ventures operates an accelerator program for startup sports businesses, and in February it launched Stadia Next, which provides sports businesses with management help.

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ANNUAL REPORT

E4 • ST. LOUIS POST-DISPATCH

M 1 • Sunday • 05.29.2016

Region’s top public company rankings Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27

Last Year 1 14 11 12 9 5 8 7 2 N.R. 15 6 30 4 19 25 26 16 13 3 18 29 20 28 N.R. N.R. 32

Company Centene Corp.

Huttig Building Products Inc. American Railcar Industries Inc. Express Scripts Holding Co. Spire Inc. (a) Emerson Panera Bread Co. Amdocs Ltd. Monsanto Co. Build-A-Bear Workshop Inc. World Point Terminals LP Ameren Corp.

Enterprise Financial Services Corp.

Caleres Inc. (b) Commerce Bancshares Inc. Esco Technologies Inc. (c) Olin Corp.

Perficient Inc. Stifel Financial Corp.

Reinsurance Group of America Inc. Belden Inc. First Clover Leaf Financial Corp.

Cass Information Systems Inc. FutureFuel Corp.

Edgewell Personal Care Co. Foresight Energy LP Reliv International Inc.

Business Composite Medicaid managed care provider 4.25 Home construction supplier 7 Maker of railroad rolling stock 8 Pharmacy benefit manager 9 Gas utility 9.25 High-tech capital goods, automation 9.5 Operates bakery cafes 10.5 Business software and services 10.75 Biotech crops and herbicides 12 Toy stuffed-animal retailer 12 Oil storage master limited partnership 12.75 Utility 12.75 Bank holding company 13 Shoe retailer 13.25 Bank holding company 13.75 Engineered filtration, testing products 13.75 Maker of chemicals and ammunition 14.5 IT consulting firm 16.5 Financial service company 16.5 Insurance holding company 16.75 Cable and signal equipment 17 Bank holding company 17 Payment services management 17.5 Biofuels producer 20 Personal care products 21.5 Coal miner 23.5 Nutritional supplements 25.75

Return on equity Profit growth Revenue growth Revenue 18.3% 31% 37% $22,760 74.8% 1082% 5.8% $660 25.9% 34% 21% $889 13.2% 23% 0.9% $101,752 8.9% 62% 21% $1,976 29.8% 26% -9.1% $22,304 24.2% -17% 6.0% $2,682 13.1% 5.7% 2.2% $3,644 30.8% -16% -5.4% $15,001 27.8% 90% -3.7% $378 18.2% 1.9% 6.6% $96 8.5% 7.5% 0.7% $6,098 11.5% 42% 3.4% $153 14.3% -1.7% 0.2% $2,577 11.4% 0.8% 2.4% $1,110 7.2% 10269% 1.2% $537 -0.1% N.M. 27% $2,854 7.0% -0.7% 3.7% $474 3.8% -48% 5.7% $2,377 7.6% -27% -4.5% $10,418 8.2% -11% 0.0% $2,309 5.9% 21% 3.9% $22 11.3% -4.1% 2.0% $122 12.3% -13% -12% $300 -13.5% N.M. -7.3% $2,421 -39.6% N.M. -11% $985 -7.5% N.M. -9.7% $52

Dollar figure in millions. N.M. Not meaningful. N.R. Not ranked last year. (a) Formerly known as Laclede Group (b) For the 2016 fiscal year ended Jan. 30 (c) Esco’s extremely high profit growth due to it increasing profits to $42.5 million from only $410,000

METHODOLOGY

UNRANKED COMPANIES: 2015 DATA

To qualify • A firm must be based in the St. Louis Metropolitan Statistical Area, which includes the Metro East, and its stock must be traded publicly on a major exchange. Each company receives a composite score based on four measures: return on equity, profit growth, revenue growth and total revenue. Profit growth and return on equity reflect a company’s talent for making money. The percentage change in revenue shows how a company is growing. We use a size factor — total revenue — to give bigger businesses a more equitable footing. After all, it’s easier for small companies to show sharp percent-change increases in profit and revenue. The rankings are added together and divided by four to obtain scores. The company with the lowest score ranks first.

Return on equity is the tie-breaker for companies with the same score.

Company Aegion Corp.

Allied Healthcare Products Inc. Energizer Holdings Inc. Isle of Capri Casinos Inc. LMI Aerospace Inc. Mallinckrodt Plc Peak Resorts Inc. Post Holdings Inc. Stereotaxis Inc. SunEdison Semiconductor Ltd.

Specific criteria • A company must have been publicly owned since Dec. 31, 2015, and remain a public company at the time of publication. It must have had fiscal year 2015 revenue of at least $1 million as well as 2014 revenue of at least $500,000, must have shown a profit in 2014, and must not have shown negative commonshareholder equity for two years. Results come from fiscal 2015 unless indicated.

Data sources • Data are derived from Thomson Reuters and the company’s 10-K annual report filed with the Securities and Exchange Commission. Revenue for banks is defined as total interest income plus noninterest income.

Business Rehabilitation of pipes, sewer systems Respiratory products Battery maker Casino operator Aircraft parts Drugmaker Ski resorts Branded food manufacturer Cardiological treatment equipment Semiconductor wafers

REVENUE LEADERS (in billions of dollars) 1 Express Scripts 2 Centene 3 Emerson 4 Monsanto 5 Reinsurance Group 6 Ameren 7 Post Holdings 8 Amdocs 9 Mallinckrodt 10 Olin

In the annual report published in May 2015, there were 43 companies listed on stock exchanges. The region was expected to have a net loss of only one company this year: Two corporations — Viasystems Group and Sigma-Aldrich — would leave once previously announced acquisitions were completed, while Edgewell Personal Care joined when it debuted in July.

But the past 12 months have been brutal to the public company scene. Synergetics USA and Pulaski Financial both were gobbled up by larger companies outside the region.

Finally, three energy local companies fell into bankruptcy: Arch Coal, SunEdison and Peabody. For the past four years, these three companies accumulated losses that totaled at least $11.5 billion; SunEdison has yet to report how it fared in the fourth quarter.

Now the list of local publicly trade companies stands at 37.

Last month, First Clover Leaf Financial Corp. agreed to sell itself to First Mid-Illinois Bancshares Inc. of Mattoon, Ill. Once that deal closes, the figure falls to 36.

(Dollar figures in millions) 1 Emerson $2,710 2 Express Scripts $2,476 3 Monsanto $2,314 4 Ameren $630 5 Reinsurance Group $502 6 Amdocs $446 7 Centene $355 8 Mallinckrodt $325 9 Commerce Bancshares $264 10 Panera $149

FASTEST GROWING

TOP GROWTH

1 Post Holdings 2 Mallinckrodt 3 Centene 4 Olin 5 Spire

$4.6 $3.3 $22.8 $2.9 $2.0

93% 61% 37% 27% 21%

1 Esco $43 10269% 2 Huttig Building Products $26 1082% 3 Build-A-Bear $27 90% 4 Spire $137 62% 5 Enterprise Financial $38 42%

BIGGEST DECLINES

IN THE RED

1 FutureFuel 2 Energizer 3 Foresight 4 Reliv 5 Emerson

1 Edgewell 2 Sunedison Semiconductor 3 Post Holdings 4 Foresight 5 Aegion

$300 -12.4% $1,632 -11.3% $985 -11.2% $52 -9.7% $22,304 -9.1%

2015 • Centene 2014 • Centene 2013 • Monsanto 2012 • Olin 2011 • Express Scripts 2010 • Express Scripts 2009 • Peabody 2008 • MEMC 2007 • MEMC 2006 • Peabody 2005 • Maverick Tube 2004 • Engineered Support Systems 2003 • Express Scripts 2002 • Argosy Gaming 2001 • D&K Healthcare 2000 • Express Scripts 1999 • D&K Healthcare 1998 • Maverick 1997 • Furniture Brands 1996 • Titan International 1995 • Titan International 1994 • A.G. Edwards 1993 • A.G. Edwards 1992 • A.G. Edwards

PUBLIC COMPANY SHUFFLE

Revenue Net income $1,334 -$8.1 $35 -$1.8 $1,632 -$4.0 $996 $5.2 $375 -$2.2 $3,347 $325 $105 -$1.9 $4,648 -$115 $38 -$7.4 $778 -$137

BIGGEST PROFIT $101.8 $22.8 $22.3 $15.0 $10.4 $6.1 $4.6 $3.6 $3.3 $2.9

PAST NO. 1 FIRMS

-$275 -$137 -$115 -$39 -$8

From staff reports

Centene’s core business is state Medicaid programs CENTENE • FROM E1

Neidorff attributes the performance last year to winning contracts in new states and expanding its existing state contracts.

Thanks to the acquisition of Oregon-based Agate Resources in January 2015, Centene now operates in 23 states.

Centene’s core business is managing state-run Medicaid programs, which offer health coverage to low-income individuals.

The addition of Woodland Hills, Calif.-based Health Net “gives us that critical mass,” Neidorff told the Post-Dispatch.

With Health Net, Centene increases its total members from 5.1 million in 2015 to more than 10 million. Annual revenue is expected to nearly double from $22.8 billion in 2015 to $37 billion, and the deal should push Centene into the Fortune 100.

The acquisition also will boost Centene’s presence in California, Texas and Florida, three of the largest Medicaid markets in the country.

“We’re not done growing,” Neidorff said.

The CEO said there are more specialty companies he wants to add to the company’s portfolio, but he declined to say which ones interest him. He did say he’s looking to grow health care IT services and wants to expand into more international markets.

Centene already has a presence in Spain as a joint owner in Ribera Salud S.A. Based in Valencia, Ribera operates health care facilities and cares for patients on a capitated payment

system, in which the Spanish company gets a fixed payment for each member it covers.

Neidorff said Latin American countries have approached the company to expand there, as well.

“I always tell people we’re playing a chess game,” Neidorff said of the need to think a few steps ahead.

Last year, rumors were swirling about consolidation among the nation’s insurance giants. Centene was even mentioned as a potential acquisition target by some analysts.

But the company made the first move, announcing on July 2 that it was acquiring Health Net. In the following months, the nation’s largest insurers announced a series of major mergers among themselves.

Aetna Inc. said it was buying Humana Inc. for $37 billion, and Anthem Inc. announced plans to acquire Cigna Corp. for $48 billion.

ROBERT COHEN • rcohen@post-dispatch.com

New employees at the Centene Ferguson Service Center participate in a training session Tuesday.

CENTENE PERFORMANCE Total revenue (billions) $25

$22.8

20 15 10 5

BEYOND MEDICAID While some of the nation’s largest insurers have complained about losing money on the health insurance exchanges, Centene has thrived.

The company actually plans to expand its health insurance marketplace plans, or plans offered on HealthCare.gov, a signature piece of President Barack Obama’s landmark health care bill.

It’s been a profitable line of business, despite complaints from the nation’s largest insurers about losing money, some of which have decided to scale back

0

’11

’12

’13

’14

’15

Net earnings (millions) $400 350 300 250 200 150 100 50 0

$355

$61.79

80 60 40

’11

’12

’13

’14

’15

Source: Annual filings with the U.S. Securities and Exchange Commission

offerings after reporting significant losses due to insuring older and sicker patients.

Centene has found success because instead of offering a broad range of plans, the company is narrowly focused on lowincome individuals who have lost their Medicaid eligibility and need to find a private health insurance plan.

The company plays to its strengths by selling to con-

Closing share price 100

sumers they already know.

Plus, Centene offers marketplace plans in the same geographic areas and with the same networks as its Medicaid business.

After two years of significant growth, Halper said he expects a more modest growth.

“We expect 20 percent earnings growth in 2016,” he said.

While Centene has been an active acquirer, the magnitude of the Health

20 ’14

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Net deal could pose challenges, Halper said.

“When you think about integration of pretty large companies, it takes a delicate hand to navigate,” he said.

Health Net also could lose a large government contract with the Department of Defense to provide services to 2.8 million beneficiaries. The contract is out to bid, Halper said.

Centene’s rapid growth has been a boon to the re-

gion. More than 2,500 work for the company in the St. Louis area, up from the more than 900 local employees in 2012.

In 2010, the company built Centene Plaza, 17-story building in downtown Clayton where the company is headquartered.

The company now plans to build 20-story tower nearby that includes offices, a corporate training center, auditorium, corporate lodging and retail space.

This year, the company also opened its $25 million center in Ferguson, which employs about 200. Centene made the commitment to expand there in the aftermath of the unrest in 2014 following the shooting death of Michael Brown.

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