St. Louis (KMOV) -- A multi-million dollar tax incentive to keep the headquarters of Peabody Energy downtown is being considered by the St. Louis Board of Aldermen, but not without opposition.
The proposed bill seeks to give Peabody a 10-year tax break totaling $61 million on purchased equipment and improvements to their downtown offices.
Board Bill 73, sponsored by 7th Ward Alderwoman Phyllis Young, would also allow for 50 percent abatements on payroll and earnings taxes for new employees.
“Peabody already has 500 jobs downtown,” said Young, “and they’re planning to bring more.”
But Young said that Peabody, the world’s largest private-sector coal company, has been “shopping around” for other locations to move their headquarters. Peabody’s lease on their current building at 701 Market St. will be slated to end in 2012.
Jeff Ordower of Missourians Organizing for Reform and Empowerment disagrees. He believes Peabody is simply bargaining for a lower tax bracket.
Ordower led a group of 25 protestors wearing pilgrim hats at last Friday’s Board of Aldermen meeting. When Young’s bill was brought up for a reading, Ordower’s group disrupted the meeting by shouting from the gallery, “Lewis Reed funding corporate greed!”
“I think everyone should understand the facts about the deal,” said Reed, President of the Board of Aldermen. “It keeps 500 jobs in the city, it keeps taxes in the city and it actually increases funding for the city’s schools.”
Reed sits on the Board of Estimate and Apportionment which approved the incentive package last week. The other two members of the board, Mayor Francis Slay and Comptroller Darlene Green, also voted in favor of the plan.
Despite this approval, Ordower plans to “escalate” their actions to prevent the bill from passing.
Unavailable for interview, Peabody‘s Meg Gallagher said in a statement:
Peabody Energy is proud of our half-century-plus tenure as a major employer and community leader in the city of St. Louis. Peabody is the only remaining Fortune 500 company still headquartered in the downtown core of St. Louis. We have contributed millions of dollars to the local tax base and created countless jobs. We are committed to the St. Louis region. At the same time, it is just good sense to evaluate opportunities for St. Louis office space with our lease nearing its end. We have this responsibility to our employees… many of whom are city residents… and our shareholders.
The incentives offered by the city are relatively modest and quite customary to help retain Fortune 500 companies such as ours.
Young expects the bill to be voted on by the full board before their Summer recess in July.