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Politics & Government

Schmitt Steady in Support of China Hub Incentives

Senator who represents Crestwood was the lead sponsor of the measure that will be debated in a special session.

Sen. Eric Schmitt has been steady in supporting a “China hub” plan for Lambert-St. Louis International Airport, even as the legislation ran into turbulence.

Schmitt—a Glendale Republican who represents Crestwood in the Missouri Senate—was the lead sponsor of the so-called “Aerotropolis” plan during the last legislation session. And even though the bill faltered during the regular session, it

The plan survived, Schmitt said, because proponents were persistent.

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“It was a long process,” Schmitt said in July. “But nobody gave up.”

That package included roughly $360 million worth of incentives aimed at drawing international cargo—particularly from China—to the St. Louis airport. The legislation would provide enticements to “freight forwarders” to ship cargo to St. Louis and to develop infrastructure around the airport.

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Supporters—such as Schmitt—argue that the plan could provide new business opportunities for the St. Louis region and provide a use for space around the airport that’s underutilized.

 “What we have in front of us right now with China at the table—and really inquiries that come from other part of the world—is to capitalize on our regional aspects, to use an underutilized airport in a more effective way, the runway that we have, the great highway system that we have.” Schmitt said.

The plan has attracted support from suburban and rural Republicans, as well as some Democrats. Although the standalone bill passed the Missouri House by a wide margin, it never got a vote in the Missouri Senate. Instead, it was attached to wide-ranging economic development bill that failed to pass by the end of the legislative session.

But some lawmakers aren’t so rosy on the plan. Sen. Jason Crowell, R-Cape Girardeau, sent out a constituent letter on Friday stating that the plan “is not about economic growth but is a handout to rich campaign contributors.” 

“Requirements, such as for a developer to qualify for Aerotropolis tax credits, warehouses must be built on 100 contiguous acres of land or in specially designated areas mean that only a select few developers who donate massive amounts to politicians, could qualify for these tax credits,” Crowell wrote. “If that wasn’t enough, according to real estate company CB Richard Ellis, there is currently over 18 million square feet of vacant warehouse space already developed in St. Louis and no need for new warehouse space.”

Crowell went on to say that “strong clawbacks” and “taxpayer protections” must be included “in order to ensure that Aerotropolis tax credits do not become a taxpayer funded ‘Air Bridge to Nowhere’ boondoggle.”

“As conceived by Senate and House leadership, Aerotropolis tax credits are a special interest giveaway to fat cat campaign donors,” Crowell wrote. “But, if Aerotropolis is going to be about true economic development, we must make the changes we’ve discussed.  And if Senate and House leadership fight us and fight the elimination of these special interest provisions, then they must be defeated as well.”

When asked in July about the criticisms that the plan amounted to corporate welfare and had a small chance of actually succeeding, Schmitt said “what’s different with this is before somebody spends $20 or $25 million on a facility, before they receive that credit they have to have that international cargo flowing through that facility.”

“They don’t get to the entire credit, the reduction of their entire tax liability, right away,” Schmitt said. “They got to prove it in year one. They got to prove it in year two. They got to prove it in year three. They got to prove it in year four. They got to prove it in year five. So the accountability built into this I would put up against any incentive on the books.”

“And I think at the end of the day, if this works … and the negotiations are real right now with the second largest economy in the world, I don’t think this region looks anything like it does right now,” Schmitt added. “I would put this credit up against any credit on the books.”

The special session is expected to begin in September.

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