ST. LOUIS — A $37 million program to inject much-needed capital into north city businesses and nonprofits has yet to award a single grant in the year since its launch, despite having over 100 applications.
But a legislative fix is on the way, city officials pledged. A new bill introduced at the St. Louis Board of Aldermen could pave the way for the money to begin flowing to the city’s poorest neighborhoods. The pandemic aid money that funds the program must be allocated by the end of next year.
“We’re not gonna save the world with this one,†said the bill’s sponsor, Alderwoman Shameen Clark Hubbard, who represents a swath of the area the bill is designed to benefit. “But we need to get this one fixed, not just because of the time constraints, but because the people, it’s not fair to them if they’ve already been waiting on this.â€
The St. Louis Development Corp., tasked with administering the program aldermen passed last spring, opened applications June 1, 2022, for the pot of money seeded with federal pandemic aid.
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It has delayed awarding the funds because of ambiguity in the bill that authorized the program last year, SLDC Director Neal Richardson said Friday.
He and his staff have pushed for legislative changes that clarify how the agency scores applicants and would allow any business or nonprofit in north St. Louis to qualify while stripping a requirement that applicants must receive support from their alderman.
“We didn’t have much say in how the first legislation was written,†Richardson said in an interview Friday. “When it landed on our desk, it was like, this is going to be very challenging to implement.â€
The legislative tuneup is the latest development in the policy life of a program that has generated controversy since its conception back when the city first began developing ways to use an influx of nearly $500 million in federal pandemic money two years ago.
, as it’s called, was billed as a way to support businesses along the main thoroughfares of north city such as Natural Bridge, West Florissant and Dr. Martin Luther King Drive. It was the subject of one of the first political battles of Mayor Tishaura O. Jones’ administration as she cast doubt on the legality of the idea being pushed by her chief rival at the time, former Board of Aldermen President Lewis Reed.
And when leaders finally hashed out a compromise, it drew renewed scrutiny after Reed, its chief architect, was indicted along with two aldermen whose wards would have drawn much of the funding. They pleaded guilty to accepting bribes in exchange for official letters of support for tax incentives.
A key requirement in the grant program’s legislation in order to win some of the $37 million? An aldermanic letter of support, a condition the new bill, if passed, would finally scrap.
Despite her concerns with that provision, Mayor Jones ultimately reached a deal with Reed and Comptroller Darlene Green to approve the program, even hosting a signing ceremony for the bill with U.S. Rep. Cori Bush, D-St. Louis, that Reed skipped.
Still, even after Reed went to prison, an attempt to strip that language out of the bill was cut from a larger reform package aimed at curbing aldermanic influence in the wake of the indictments.
Meanwhile, the program continued accepting applications, though it wasn’t widely known that SLDC wasn’t actually awarding grants to north St. Louis businesses.
Richardson, the SLDC leader, said one of his agency’s primary concerns after reviewing applications was the disparity between more sophisticated organizations applying for grants and smaller neighborhood businesses the program seemed aimed at.
Many applications weren’t complete, and Richardson said a consultant it hired last year, the National Development Council, is working with many of the applicants and helping smaller organizations properly complete applications.
“We’ve seen a huge discrepancy in the quality of applications between businesses and nonprofits and organizations who traditionally go after public funds versus those who operate, you know a child care facility for example,†Richardson said. “We want to ensure they have an opportunity to be competitive in the process.â€
The new legislation would remove the requirement that an applicant be located along one of 10 main streets in north St. Louis, as well as the pots of money allocated to each. A scoring system would give extra points to businesses located on those streets, a nod to the original “spirit†of the legislation without “limiting ourselves,†Richardson said.
There is demand well beyond the $37 million allocated for the program, Richardson said. And though the bill doesn’t technically contain a limit on a grant award, Richardson said he doesn’t “foresee†the money being used up by one or two large projects.
“But it does open up the opportunity that if there is a catalytic project that can lead to transformational change in north city that’s aligned with the highest needs, you don’t want to miss those opportunities either,†he said.
Aldermanic courtesy
One of the main sticking points during the 2021 fight over the program between Jones and Reed was the mayor’s contention that it didn’t comply with federal rules governing the American Rescue Plan Act funds. But after federal regulators clarified that cities had wide discretion to spend funds in poor neighborhoods, those concerns were largely dropped.
Now, those concerns are again being alluded to as an impetus for the latest bill. SLDC, Comptroller Green and Clark Hubbard have all suggested there are again regulatory compliance questions.
“While the city must adhere to all of the federal rules and regulations, we need to keep in mind the importance of this money to so many businesses in light of COVID,†Green said in a statement Friday responding to questions about the program.
Alderwoman Sharon Tyus, who represents several north St. Louis neighborhoods, helped broker the compromise with the mayor and Comptroller Green last April that created the program. And she’s frustrated those concerns didn’t come up then.
“Why is it a problem, because the mayor was part of this negotiation, as was the comptroller,†Tyus said. “If there was a concern, then why all of this time they didn’t say look, put it in writing, this is a problem this is why we need to change it.â€
They also signed off on the aldermanic letter of support as a condition for the grant funds, Tyus said, and now they want to change it. Aldermen and alderwomen, she argued, know their neighborhoods and the businesses there better than anyone.
“If you’re giving out this money, and you don’t know, you could be giving it to one of the worst businesses in the world,†Tyus said.
Clark Hubbard said her constituents are frustrated by the delays, too, and she was also under the impression that the program last year was one all parties thought would work. But she defended stripping out the aldermanic letter portion given both the indictments and the fact that wards are twice as large now, stretching aldermen even more thin.
“The reality is that’s just not fair to everybody because everybody does not have a relationship with your alderman like that,†Clark Hubbard said.
She and Richardson, at SLDC, said aldermen can still advocate for or against a project. But awards should be based on “scoring criteria overall and not just solely based on the letter of support from the alderman,†Richardson said.
Nick Desideri, a spokesman for Jones, said in a statement that the mayor supported the bill, “which will cut red tape while expanding access for more people to this program. It will help ensure that distribution of funds is more equitable and fair for the neighborhoods that need it most.â€
Assuming aldermen pass the bill in the coming weeks, Richardson said his goal is to get the $37 million into the hands of businesses before the end of this year. SLDC has already begun evaluating the 120 or so applications it has and is prepared to begin using the new scoring system as soon as it is passed.
In the two years he has been there, his agency has been implementing nearly 20 grant and loan programs using federal ARPA money, he said, of which the commercial corridor grant program is only one.
“We want to get money out the door as fast as possible,†Richardson said. “It’s been a huge undertaking to get all these programs stood up.â€
