ST. LOUIS — The Cortex Innovation Community, a $2 billion economic engine for the region, has garnered national prestige and ignited urban renewal the city’s core had not seen in nearly a century.
But the district, now in its 20th year, is facing some of its toughest challenges to date with millions of dollars in lost revenue, slowed development and pandemic-wrought uncertainty over whether tenants will return to Cortex, which houses dozens of offices and laboratories.
Regional leaders say regaining the momentum at Cortex is a top priority.
“This is too important,†said Jason Hall, CEO of regional business group Greater St. Louis Inc.
Cortex officials say they have a new five-year strategic plan that will address those anxieties and provide a roadmap to recruit dozens of more companies to the area and build a pipeline of diverse talent. To do so, the district will narrow its focus to select industries, build “pandemic-proof†real estate and foster job training.
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“This is very much an evolution,†said Sam Fiorello, CEO of Cortex, “leveraging the things we’ve done very well and looking at the realities of a changing world.â€
The district was founded in 2002 with an initial investment of $29 million by Washington University, St. Louis University, University of Missouri-St. Louis, BJC Healthcare and Missouri Botanical Garden. The organizations keyed in on 200 acres of largely neglected industrial property in the Central West End, northwest of Interstate 64 and Vandeventer Avenue near Midtown.
Over the next 20 years, thousands of square feet of new office and lab space was erected, a new MetroLink station built and more than 425 companies with 6,000 jobs recruited or created. Its programing has trained 346 new entrepreneurs, of which 60% identified as racial minorities, Fiorello said. And district officials say Cortex has also spurred nearly $1 billion of new development around it.
The district has fostered such companies as medical device firm Stereotaxis, which was Cortex’s first-ever tenant, and financial services company Block, formerly known as Square. Both companies outgrew their space in the district and relocated to downtown St. Louis. Microsoft and Boeing opened offices; nationally acclaimed restaurant Vicia and Aloft Hotel also call the district home.
All of that — its institutional founders, entrepreneurial programming, strides in diversity — has made Cortex a model for innovation districts around the country, if not globally, said Bob Geolas, partner at New York-based economic development consulting firm HR&A Advisors. Geolas previously led North Carolina’s innovation district, Research Triangle Park.
“There’s a number of projects we point to as best practices across the United States,†said Geolas, who has consulted for the district. “Cortex is always on that list.â€
Acute pain
In 2019, momentum swelled at the district, which then had 99% occupancy: Wash U announced its more than $600 million neuroscience research center. Developers debuted plans for a $115 million office building. And plans for Cortex’s first-ever apartments emerged.
Then the coronavirus pandemic hit and delayed all of those projects except for Wash U’s development, which is under construction.
It also wiped out revenue Cortex generated from parking and rent. At one point, the district was losing around $250,000 a month between lost revenue and rising expenses, Fiorello said.
The pandemic exacerbated a funding problem that sprouted when then-Gov. Eric Greitens slashed the budget of the Missouri Technology Corp. by nearly 90% in 2017. Cortex had relied on MTC as a source for the district’s programming and has drawn on reserves to make up for the loss.
From 2018 to 2019, Cortex’s revenue fell 63% to $3.9 million, while expenses grew 29% to $6.3 million, according to Cortex’s latest publicly available financial filings.
“We experienced acute financial pain from the pandemic, and we’re still very much in it,†said Fiorello, who was appointed CEO in early 2020.
But, he said, the pandemic has also revealed new opportunities. The organization already has made moves to support it, like hiring Brian Russell, whose responsibilities include finding other sources of grants and funding, and Natalie Self, who leads its diversity strategy.
“Two years later,†Fiorello said, “I see a light at the end of the tunnel.â€
The new plan
The pandemic and financial troubles helped Cortex zero-in on its future.
In the new strategic plan, Cortex will focus on recruiting companies in and build programming around the cybersecurity, geospatial, life sciences and national security industries. It also will continue to foster “general tech†companies, Fiorello said. Specifically, it aims to recruit 10 additional life sciences companies, 15 national security companies and 15 general tech companies, and create 2,500 new jobs. The goal is for these companies to open at Cortex, but Fiorello said it’s still a win if these firms land elsewhere in the region.
The district will add “pandemic-proof†real estate, or specialized space that companies can’t replicate at home like laboratories and secure space. Virginia-based Westway Services Group announced last year it would build a building for government agencies and contractors that handle classified or special information at Cortex. The district aims to have three new buildings under construction or renovated over the next five years.
Cortex will grow the number of entrepreneurs and startup founders who are people of color and women: have over 700 businesses go through its training program called Square One; create 500 new jobs; have 1,250 graduates from tech training partnerships and have at least 900 of those graduates be employed two years later. It is aiming for women and people of color to make up 70% of this.
June McAllister Fowler, chair of Cortex’s board of directors, said the plan is intentional, collaborative and, most importantly, practical. And it holds Cortex’s leadership and board accountable, she said.
“Nothing is left unsaid in this plan,†Fowler said.
The focus on geospatial comes as other developers are making that a centerpiece to their projects. Entrepreneur Jim McKelvey and his partner at The StarWood Group, John Berglund, are focusing on that industry for their new innovation district in downtown St. Louis. An anchor to their Downtown North Urban Insight District is the Globe Building, which counts several geospatial companies as tenants. Westways also is taking an entire floor there to build its secure space.
Regional leaders say there’s enough promise in geospatial industry for efforts to be spread across the metro area.
“Sometimes we focus too much on the, ‘I win, you lost’ mentality in the region,†said Greater St. Louis’ Hall. “Cortex’s future success isn’t an island.â€
Some of its future is already in place.
Cortex had no room for Virginia-based General Dynamics Information Technology when it first looked here in 2012. The IT company found space years later, signing a lease just before the pandemic hit, said Paul Luker, senior director of GDIT.
Despite the pandemic limiting Cortex-hosted events, GDIT has been able to make connections with Washington University and St. Louis University — interactions Luker said wasn’t possible at its old location in south St. Louis County.
“Cortex,†Luker said, “has given us everything we had hoped for.â€
Editor's note: The description of GDIT has been corrected to say that it is an IT company.Â
