Photos from Centene (Julie Cheatham)
Photos from Centene

Julie Cheatham

The Centene Project

September 26, 2016

Anyone raised in Clayton has watched the city grow taller. Children stand on their tiptoes and peer eagerly out of their windows as bulldozers and swinging cranes uplift the earth, marking the places where, in a short few months, steel and cement will stand. With each addition of a new building or company, Clayton’s landscape has evolved to include the “quality businesses” that the City Government’s mission statement promises. 

Today, a leading multi-line healthcare enterprise, Centene Corporation, is planning one of the largest construction projects in Clayton’s history. While some view Centene’s plans as a promise to enrich the Clayton community, others believe that an expansion of such caliber would threaten everything the City of Clayton has worked so tirelessly to establish.

On June 6, 2016, Centene presented its conceptual design for expansion to Clayton’s Plan Commission and Architectural Review Board (ARB). Recently named the fourth fastest-growing corporation in America, Centene plans to expand its global headquarters in Clayton through the construction of three new buildings: a 21-story Civic Center and Auditorium, a Luxury Residential and Retail building, and a 28-story Hanley Tower that would be constructed across the street from Centene’s current building on Hanley Road and Forsyth Boulevard.  Other components of Centene’s expansion plans include parking that would accommodate 5,300 vehicles, a 40,000 square-foot company fitness center and a 1600 seat corporate civic auditorium. In total, the four subdistricts of the project would add 1.4 million square feet of office space, 55 thousand square feet in retail, and 120 apartment or condo units.

Centene Perspective

Julie Cheatham

Centene Perspective

Over the past 20 years, Centene has grown from a single health plan based in Wisconsin to the 127th largest company in the world with approximately 29,000 employees based in the United States, the United Kingdom and Spain.  

In 2015, Fortune Magazine named Centene America’s fourth fastest growing corporation. To accommodate its monthly influx of 40 new employees in Missouri alone, Centene desperately needs more space in its headquarter city of Clayton.

“Our growth story is unprecedented,” Marcela Hawn, Centene Corporation’s Chief Communications Officer and Senior Vice President, said. As Centene continues to grow worldwide, we are committed to the City of Clayton and want to continue to be an anchor to this region.”

According to Centene Corporation, its proposed Clayton campus expansion will bring 2,000 high-quality jobs to the city with an average salary of 73,000 dollars. One thousand of these jobs will be new to Missouri. Additionally, Centene claims that necessary construction will generate 470 construction jobs per year for the anticipated eight years of construction for the expansion project.

The job estimates provided by Centene are more than a hope. In order for the Fortune 500 company to receive any tax breaks from the City of Clayton, the creation of a minimum 2,000 jobs must become a reality.  

Throughout the planning process, Centene has strived to tried to make its proposal as transparent as possible. The Fortune 500 company currently believes that much of the resistance to the project is due to the mistaken belief that Clayton taxpayers themselves will be forced to pay for a portion of Centene’s expansion.

“Existing tax money from Clayton and Clayton taxpayers will not be used to fund the project,” Hawn said. “The project is paid for by Centene.”

While the City is willing to incentivize Centene to expand with $147 million in tax breaks, Centene itself holds the sole responsibility of funding its $770 million expansion. Only upon Centene’s successful creation of 2,000 new jobs to the City would Clayton grant Centene the predicted tax breaks. These incentives, however, are merely discounts, and Centene would still be responsible for paying large amounts of taxes to Clayton that could then benefit its school district, streets, and fire and police departments.  

If Centene fails to generate the promised 2,000 jobs upon expansion, the City of Clayton would still benefit, as Centene would not be granted any tax breaks and would then be responsible for paying taxes to Clayton in full.

Because of this arrangement, Centene believes that the City of Clayton cannot suffer financially from Centene’s expansion regardless of its success or lackthereof. If the Fortune 500 Company does not expand and instead remains at its current size, the City of Clayton will neither lose nor gain any revenue. However, a Centene expansion would generate a flood of new taxes to the City regardless of its success.

Based on the creation of 2,000 jobs, Centene estimates that at least 4 million dollars in annual payroll tax revenue will be paid to the State of Missouri.  Expansion would also produce 2.8 million dollars for the School District of Clayton on day one for a total of 56 million dollars over a 20-year period.

“These additional resources mean the school can continue to hire great teachers, continue to improve classrooms and bring additional top education resources for our children,” Hawn said.

In addition to the estimated tax revenue from its expansion, Centene also estimates that its project will bring non-Centene jobs to the City. “Our design includes office space for other firms that may want to come to Clayton,” Hawn said. “The design also includes retail shops, which in turn bring more jobs [to Clayton]. As additional jobs are brought to the City, additional tax revenue is generated for Clayton and its residents. Clayton taxpayers will reap the benefits of this world-class development.”

Furthermore, Centene’s plans include the construction of a 1,600 person auditorium for large employee meetings. Centene assures Clayton residents that the modern space could also be used by citizens as a venue for concerts, play productions, and other functions.

Lastly, Centene has also incorporated a 120-room luxury hotel into the top of one of the proposed skyscrapers. Not only will these luxury living accommodations make Clayton a more attractive travel destination, but they will also provide upscale living space for current citizens.

“This project is a significant investment in the long-term future of our City. We would be building, over the next few years, a world-class development that we can enjoy, but most importantly, future generations can enjoy,” Hawn said.  “[Expansion] could really position Clayton to be even more attractive and competitive nationwide.”

Centene’s plans to expand not only take into account the perspectives of the the many residents living in Clayton, but also focus on the health and aesthetic of the City. Centene aims to create and maintain as much green space as possible for Clayton citizens to enjoy. The company has also been in contact with world-class artists and sculptors in order to expand on the artwork that Centene has already brought to Clayton.

“When a company like Centene invests in state-of-the-art structures and brings great jobs and opportunities, this likely attracts top people and other companies to our city. This project is a significant investment in the long-term future of our City,” Hawn said.

To meet the demand of its rapid growth projections, Centene has considered not only its current needs, but also its vision of a future in Clayton.  

“I work here, but I also live here and my kids go to school here. I would love for [Clayton] kids to be able to come back home after college or graduate school and find great job opportunities right here in Clayton – opportunities that can compete with those in New York and other big cities,” Hawn said. “I love Clayton. It’s a wonderful community. I want others to love it too.”

The Opposition

Julie Cheatham

The Opposition

“[They] relied on the city plan when they purchased it. They knew there’d be development around the building and they were welcoming a mixed use where there would be restaurants, and retail, and other residences. And if there wanted to be an office in there, that’d be great too. But they didn’t imagine a 30 story building and on that side of the road, over five thousand parking spaces,” Kevin Cushing, attorney and principal at Carmody Macdonald Law Firm in Clayton, said.

Despite all the positive remarks regarding the expansion, it becomes easy to overlook the harms. Residents at the Crescent Condominium Complex in Clayton have been showing signs of disapproval towards Centene’s expansion.

Cushing is representing these residents and explained their concerns. “The residents [of Crescent] aren’t angered. But these are residents that have made substantial investments in homes,” Cushing said.

The controversy surrounding the project is multifaceted. The main source of concern seems to come from the fact that Centene’s project does not comply with the city of Clayton’s master plan. This master plan lists general guidelines that the city must follow outlining that the whole area of downtown Clayton would have low to mid rise buildings, be pedestrian friendly and be mixed use. Cushing describes that the first issue regarding the project is the fact that the building Centene is planning to build does not fit the guidelines set by the city. The building was proposed to be over 20 stories tall, even though the buildings along Forsyth (where this would be built) are restricted to seven stories.

“The other issues are very clear that the city envisioned a pedestrian friendly walkable neighborhood with mixed use which is residential, retail, and could be office. All we’re getting from this development is the towers and parking garages along Forsyth between Carondelet and Hanley. And that’s our main issue,” Cushing said. “That it’s not mixed use, that it’s not going to be a neighborhood. What it is going to be is a series of parking garages next to an oversized office building and that’s not what the city envisioned with its master plan.”

Cushing was called by the Crescent residents because they felt that Centene’s proposal was unreasonable.

“So what they [residents of Crescent] are asking for is to lower the size of the building [and] to lower the other tower so that there is less demand for parking, and do what the city asks for,” Cushing said.

The residents explained that Centene had met with them numerous times to talk about the project and the blueprints. However, Centene cut off communications once the residents began demanding for the company to comply with city regulations to minimize the impacts.

The biggest impact anticipated right now by the Crescent residents is traffic. Today, there is an influx of traffic that occurs during rush hour in Clayton. But with the 5,300 space parking garage in a nine acre tract near Hanley, many people are fearful that the traffic studies presented to the city were overly optimistic.

“So you’re stuck with all those cars in an already bad situation. To give you an idea, the traffic consultant for the city has indicated that Carondelet, which is the road that leads from Hanley to the Ritz [Carlton], if somebody is wanting to leave the Ritz, and drive to Hanley Road and make a left turn, on any night, the line to make that left turn will be longer than a football field,” Cushing said.

Every night, the amount of traffic stacking back from Hanley will be as long as 360 feet during rush hour.

But this traffic is not just an inconvenience to the residents. Residents trying to sell their house will have a tougher time. Property values will drop because people will not want to live in an area where it becomes impossible to travel to your destination and back.

“It’s really going to change the way people in Clayton view their community. They talk about this project being transformative. And it is. It’s going to substantially change the way people travel and the way they view the city of Clayton,” Cushing said.  

Cushing also explained that the traffic issues are going to heavily influence the community’s perception about the project.

“Centene has said they are going to solve the issues of traffic on Hanley by synchronizing the lights. The traffic consultant, hired by the City, says that the lights are already coordinated. So you can’t synchronize something that’s already coordinated,” Cushing said. “So all they’re doing is giving it more green time. For example at Hanley and Carondelet, they’re going to let the green light on Hanley four seconds longer. That’s supposed to take care of the problem that’s going to be created by six thousand new cars coming into the area. I don’t see how that’s possible.”

City Perspective

Julie Cheatham

City Perspective

Development is nothing new to Clayton, something Mayor Harold Sanger knows well. He also recognizes that since the mayor and the Board of Aldermen eliminated the height restriction in downtown Clayton in the late 1950s, few developments have been implemented without considerable controversy.

When he makes presentations about development, Sanger often brings along a picture. The picture was taken in the early 1960s where Continental Life Insurance wanted to build a building between Compton and Brighton, a building that still stands today. Depicted in the picture is an angry group of citizens protesting the development.

“The people of Clayton Gardens were literally out with picket signs opposing the project because they thought it was going to be the end of life as it was known in Clayton,” Sanger said.

Another past development, the Justice Center, was similarly contested.

“When the Justice Center was built people came out and said ‘there’s going to be convicts and rapists and murderers running through the streets of Clayton,” Sanger said. “You can’t even tell it’s a prison; it looks like an office building.”

Despite the opposition, the city leaders at the time approved these developments and the fears of many residents went unrealized.

”We have to do what’s right for the community; not everyone’s going to like it,” Sanger said. “Never, ever, ever will there be a unanimous [development].”

For Sanger, the Centene Expansion Project has the potential to be right for the community.

“To have one developer develop that entire property is both unique and extremely beneficial to the community,” he said, referring to the 22 parcels of property that are part of the Centene Expansion. “If those were to be developed by individual developers, you would not have a project that really has a whole general purpose.”

Much of the property Centene hopes to develop is currently vacant, meaning it is creating a minimal amount of tax revenue each year. For Sanger, this makes the expansion all the more appealing.

“People will buy things, they will go to lunch, they will take their laundry to a dry cleaner, they will buy something on their way home or they’ll stay and have dinner,” he said. “All of this adds to our tax base. So it’s a very fiscally important project.”

Also fiscally important to the City of Clayton is the tax abatement Centene is requesting. However, Sanger believes that much of the controversy surrounding the tax abatement is due at least in part to a lack of understanding of what a tax abatement truly means.

“We’re not sticking our hand in our pocket and saying ‘Here’s millions of dollars, go do what you want,’ Sanger said. “We’re just saying [that] to help make a project reality, we are willing to look at a situation and see if it justifies a lower tax rate.”

In the entire history of Clayton, the city government has only ever given two tax abatements. Even if the city granted Centene the requested tax abatement, abatements would remain far from the norm.

“Every project is looked at to see if it is an overall benefit,” Sanger explained. “When we look at a request, we will never give a tax abatement that would create a situation where we would be getting less [revenue] than we’re getting now or not enough to cover any additional services that are needed by the new property.”

The other main point of controversy for the project, traffic, is something Sanger plans on addressing throughout the approval process for the Board of Aldermen.

“The [traffic] suggestions will be incorporated into the agreement with Centene. It will definitely help to alleviate those things,” Sanger said.

Even with the possibility of increased traffic, Sanger is optimistic about the implications of the Centene expansion.

“We’re just trying to create something that’s beneficial to our community through additional tax base, to our retailers and restaurateurs through more feet on the street,” he said. “It [The Centene expansion] really solidifies Clayton as the epicenter of commerce, justice and education.”

Other city officials share some of the hope Sanger has for the potential benefits of the Centene expansion. For George Ertle, Assistant to the City Manager, the Centene expansion could fulfill the mission statement of Clayton Planning and Development Services, which includes the phrase, “to promote responsible growth to ensure that the City remains a sustainable, well-designed, and prosperous community.”

“The hallmarks of [such a] community include opportunities for job growth, attracting residents, [and] ensuring sustainable revenue sources,” Ertle said. “The Centene proposal has the potential to provide opportunities that support these values; therefore Clayton is undergoing a careful and transparent development review process of the project,”

In an effort to create a sustainable, well-designed and prosperous community, the City of Clayton has been looking beyond just the Centene expansion project and working to encourage development as a whole.

Development, in general, is an essential component of Sanger’s vision for the City of Clayton.

“That’s a very important part because [development] will draw quality retailers, quality restaurateurs, and that’s really what we’re about – having quality places for people to go,” he said.

Sanger’s vision for Clayton’s future is largely a product of his reflection on Clayton’s past.  “My job and the current Board of Aldermen’s job is to plant seeds for future boards and mayors for future generations. That’s what the boards and mayors did for us in the past,” he said. “Our goal is to keep it, enhance it, and make it even better.”

School District

With all the potential changes associated with the Centene expansion project, there are worries to how the Clayton School District will be affected.

Sean Doherty, superintendent in the Clayton Schools district, describes the biggest impact that will occur if tax incentives, a tax code designed to encourage economic activity, are requested. However, Doherty stressed that a new tax incentive would not decrease the current tax funds coming into the district, yet would decrease the potential funds coming into the district with this new development.

“Although it might be an incentive that’s going to reduce the amount of money coming into the district, it’s an increase in the total amount of money,” Doherty said. “It’s not going to decrease the amount that we’re already getting, it just wouldn’t increase by the complete amount expected.”

Although Doherty is optimistic with regards to the economic development in Clayton, he feels that the District needs to be mindful about how the Centene project could alter the demography of the District. As a large number of people could come to Clayton due to Centene’s expansion, Doherty has apprehensions to the available space for students in the future.

“The district is not opposed to progress in the community. But when it comes to residential development, if there’s a potential to have new students coming in, then those projects shouldn’t have tax incentives, because that’s money that could pay for the education of those students,” Doherty said.

Although Centene’s studio apartments seeks to attract mostly single millennials, Doherty still recognizes the potential for an influx of new students. “You can’t predict the future,” Doherty said. “The thought is the people who are moving into Clayton might eventually have families, and maybe they will buy the homes because they want to stay in Clayton, but we can’t predict that.”

To deal with this potential issue, the School District has hired a demographer to review possible developments in Clayton and how it may affect the Clayton schools. “[This] way we can do some long range projections on ‘is this impacting our district?’” Doherty said.

Regardless of these reservations, Doherty ultimately keeps a positive attitude towards development in general. For Doherty, new companies in Clayton could even mean new opportunities for Clayton students to intern or work at these companies. “If we can get partnerships together where are students are getting real world experience, I think that would be really beneficial,” he said.

Also, Doherty hopes that a vibrant downtown Clayton will encourage Clayton graduates to return to Clayton. “A lot of our high school students are going to go off to college, and they might see different opportunities elsewhere,” Doherty said. “I think what we want to do is ask ‘What would bring our Clayton students back to Clayton.’ I think it’s good to have people coming back to St. Louis and seeing it as a vibrant place to live.”

Whatever effect future development may have, Doherty is confident that Clayton schools will remain some of the best in the nation. “I don’t think it [development] is going to compromise our standards or who we are as a district,” Doherty said. “Clayton will always have this reputation of being a rigorous and amazing educational experience for students.”

Conclusion

Julie Cheatham

Conclusion

On September 6, 2016 a nearly filled Clayton High School auditorium gathered from 5:30 pm until almost 11 pm for the second public hearing of the Centene expansion project by the Plan Commission and Architectural Review Board. For over five hours, residents listened to presentations and voiced their own opinions. While Centene’s expansion proposal ultimately received the recommendation of the Plan Commission, it is still a ways from reality.

The special development district Centene is requesting requires the Plan Commission to review the general plan and then submit a recommendation to the Board of Aldermen. Now that Centene has received the necessary recommendation, it must also earn the approval of the Clayton Board of Aldermen.

The Board of the Aldermen has the power to approve, reject or send the proposal back to the Plan Commission with suggestions. Should the Board approve the project, Centene would be required to return to the Plan Commission with their individual sub districts and give the specifics of the proposed developments. Those specific plans would again have to receive the recommendation of the Plan Commission and the approval of the Board of Aldermen before the developer could get building permits. However, should the Board of Aldermen reject the project, the proposal would be stopped in its tracks.

Despite the controversy of Centene’s particular proposal, development almost seems inevitable for Clayton’s continued growth and success. “You have to go back to the 50’s, when the Mayor and Board said, against huge opposition, ‘We’re going to release the restrictions on height in downtown Clayton,’ If they hadn’t done that, there would be no Pierre-Laclede building, no Commerce Bank building, there would’ve been nothing,” Sanger said. “They had the vision to do that. Other boards, all the way up through us, have continued that vision of keeping Clayton as the premier place to live and do business in the entire region, and that’s the goal.”

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