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ACCELERATING INCLUSIVE ECONOMIC GROWTH IN ST. LOUIS
The Cortex Innovation Community accelerates inclusive economic growth in the St. Louis region. Cortex, a 501c(3) not-for-profit organization, uses different tools to achieve that mission: real estate development, funding and running entrepreneur training programs, convening partners to offer workforce training and company recruitment opportunities, maintaining quality public spaces, coordinating security efforts, and contributing to the St. Louis innovation ecosystem. Because of Cortex’s activities, $77.9 million of net new tax revenue was added to St. Louis City and the region between 2014-2022.
Why Does Cortex Develop Real Estate?
Cortex approved a new 5-year strategic plan in March 2022 laying out the future direction for the organization. This new vision centers on equitable economic outcomes in the region. To help achieve that mission, Cortex needs to continue to build buildings in the district. Given the deteriorated condition of the land, Cortex and its development partners cannot develop those areas without TIF (Tax increment financing) assistance. Below is more information about why Cortex develops land, how Cortex has used TIF in the past, and what Cortex is seeking approval for now.
Why Does Cortex (Still) Use TIF?
TIF (tax increment financing) is a development tool that the City of St. Louis approved and granted to Cortex in 2013. This was granted based on Cortex showing that the land needed additional work to make it “shovel-ready”: environmental remediation, significant improvements to public infrastructure, etc. Cortex, and its development partners, rely on TIF to make development projects affordable. Even today with all the building that has occurred in the Cortex District, undeveloped land still needs to be cleaned up and public improvements made for projects to move forward. Cortex has until 2023 to make these TIF allocations available for use in development.
How Does Cortex Use TIF?
With TIF, Cortex pays the entire costs upfront for redevelopment necessities, such as repaving streets and repairing sidewalks. Once the development is finished, some of the newly generated tax revenue is used to reimburse Cortex for these expenses. The remaining new tax revenue goes to a variety of taxing jurisdictions across the region and state, including the City of St. Louis and Saint Louis Public Schools.
In 2013, the TIF Commission granted Cortex permission to request $167.7M to put towards projects and divided it among eleven redevelopment project areas (RPAs). In order to use TIF, Cortex must create a specific project plan for each RPA and present it to the TIF Commission for review, public input, and approval. This process provides checks and balances to protect the public interest. To date, Cortex has only used $88.7M of the approved $167.7M.
Cortex’s ability to activate unused TIF for development will expire in February of 2023. Because of the slowed pace of construction and the COVID-19 pandemic, we still have three RPAs that need to be developed. That is why we are going to the TIF Commission. If Cortex does not act now, the district will lose the ability to use the remaining allocation. That would mean we will not be able to develop the land, and the public will forego the benefits of new tax revenue, new jobs, and the improved public infrastructure that Cortex would provide.
Cortex currently has TIF bills before the St. Louis Board of Aldermen to approve one project and to activate two redevelopment project areas. Activating these two areas will open the possibility of projects being completed in these areas before the Cortex TIF deadline; without activation, Cortex loses the opportunity to use TIF funds on any future projects. Once project plans are established, they will be presented to the TIF Commission for approval.
Cortex values transparency in our past and future use of TIF funds. If you have additional questions, please feel free to email info@cortexstl.org and we will answer them.