CLAYTON — A second phase of health insurance giant Centene’s campus expansion, which calls for a third office tower, hotel and auditorium, is on hold after CEO Michael Neidorff warned he wouldn’t invest further in the region unless crime rates fall.
The Fortune 100 company’s development agreement with Clayton officials, inked in 2016 and amended a year later, calls for construction to begin on the second phase of its campus expansion by Dec. 31. But Clayton Mayor Michelle Harris said Centene officials told her that the company is “very concerned” about crime and has put investments here on hold.
If Centene misses the development deadline, it would give up its right to millions of dollars of property tax abatement for the second phase, according to the development agreement.
He sent a warning to the region, saying a lack of action on public safety would drive people and businesses away.
“I have been assured that as far as Clayton goes as a location, they are very happy here,” Harris said. “But they’re not willing to put more investment into our region, whether it’s Clayton or anywhere else, until they can feel more hopeful about crime being addressed.”
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Centene did not respond to requests for comment Monday.
Neidorff has grown Centene over the last decade into a national health insurance powerhouse and the largest company by revenue in the region. He said in a series of interviews this summer that crime and the region’s inability to drive it down hurt his company’s ability to recruit top-notch talent to St. Louis. The interviews came just as Centene announced a $1 billion East Coast headquarters in Charlotte, North Carolina, and as North Carolina Gov. Roy Cooper signed a law instituting Medicaid Managed Care — one of Centene’s core lines of business — in the state.
The company did not explicitly say then that it was halting plans for another 335,000-square-foot office tower, a 120-room hotel and 40,000 square feet of retail space called for in agreements approved by Clayton officials in 2016 and 2017.
The amount is less than the company first sought, and a citizen's group is seeking to require a popular vote on large incentive packages.
Around the time Neidorff gave his summer interviews, Harris heard from Centene officials that they were putting investments here on hold.
The decision appears to leave unfinished a roughly $370 million investment contemplated as part of a second phase for what was originally a $770 million corporate expansion in the county seat.
Clayton’s Board of Aldermen in 2016 approved the 20-year tax abatement, worth up to $49 million in current dollars, for the campus expansion. In that agreement, Centene promised to build two more office towers — the first was built years ago — plus a hotel, 1.5 million square feet of parking, tens of thousands of square feet of retail, and a civic auditorium.
The company recently completed the first phase: The first office tower of the campus expansion and about 1 million square feet of parking, which qualifies it for a chunk of the tax abatement.
The 120-room hotel is not required as part of the second phase. But the second office tower is.
And the auditorium is a requirement for any tax abatement: The auditorium must be completed by the end of 2024, or Centene, the agreement says, will lose property tax abatement even for the portion of the first phase already constructed.
Harris said there are no plans now for the land, which is vacant and controlled by Centene.
Neidorff’s concerns with crime in the region spurred Centene consultants to lead a secret effort that began in October to combine St. Louis and St. Louis County policing efforts around Jennings, in the county, and adjacent sections of St. Louis. Consultants hired by Centene and other companies are supposed to release a report later this month as part of a review of city and county policing efforts in one of the region’s highest-crime areas.
The city and county police appear to be implementing some recommendations from a consultant even though it has never publicly released them.
Though St. Louis homicides this year have reached levels not seen since the early 1990s, public safety officials have said much of the violence is in certain areas and between people, often with criminal histories, who know each other. Random violent crime is still rare, they say.
Harris, the Clayton mayor, said her understanding is that Centene has not made any decisions about moving its headquarters out of Clayton. The Charlotte location, she said, will serve as a hub of information technology for the company.
The city has no plans now to amend the development agreement, but she said Clayton officials “want to be collaborative and helpful in any other way we can.” She’s still hopeful the company will build out the remainder of the campus.
“They have a terrific plan for Phase II for a total campus and it still stands as approved,” Harris said. “I’m hopeful with renewed energy in the region, post-COVID, and with some new (St. Louis) leadership, that we will get a handle on our crime numbers and perception.”
