ST. LOUIS — Millions in federal relief funds were promised to north St. Louis businesses hit hard by COVID-19, but many business owners say they’ve been left in the dark.
Tameka Stigers’ north St. Louis salon has worked hard to recover from the pandemic’s toll after being forced to close for months. She hoped federal American Rescue Plan funds would help her make up the losses. But she said she was shut out by a city scoring system that favored specific neighborhoods over others.
“It is ridiculous. It is a slap on our face as business owners, our elected officials, we expect better of them," Stigers said.
Conner Kerrigan, spokesperson for the mayor’s office, said Stigers did not meet the criteria to qualify for the program. He defends the city’s approach, saying the $416 million in requests from businesses in north St. Louis far exceeded the $33 million available.
“We've got a lot of money that's going into north St. Louis to invest in a community that's been disinvested in for about seven decades now," he said.
He said pushback about where the money is going is politically motivated. The city launched a new portal last week, providing a breakdown of businesses that applied for assistance and showing where the federal money is going.
But officials like Comptroller Darlene Green said that the city has moved too slowly, saying in a statement: "The public has lost trust... And the taxpayers are not being protected. The best way to fix this is to immediately course correct, and improve the vetting and selection processes to avoid potential risks of loss of federal dollars, potential court challenges and to restore public trust."
Missouri Sen. Eric Schmitt sent a letter Thursday to the U.S. Department of Treasury, pressing for answers on spending and citing 5 On Your Side's reporting on the issue.
Schmitt said in a statement to 5 On Your Side, “It’s no secret that the State and Local Fiscal Recovery Funds are ripe for abuse and fraud. The pandemic is long over, and cities and politicians are still attempting to use taxpayer funds as rainy-day slush funds to pay for wasteful projects that benefit only the city’s connected and powerful.
"The City of St. Louis is no different. There desperately needs to be accountability. I led the charge earlier this year through the Congressional Review Act to try to put a stop to changing definitions that would allow cities and localities to spend this money indefinitely, and I’m leading the charge again to put a stop to this waste and abuse of taxpayer money. Enough is enough.”
St. Louis Ward 8 Alderwoman Cara Spencer, who’s running for mayor, has also been calling for more oversight.
“We are 2.5 years in, many of these businesses applied in the summer of 2022 and here we are still vetting them," Spencer said. “The faith in the system is gone.”
Stigers said she’s lost hope in a city process that has yet to deliver.
"So we're asking people to sign the petition to get the city audited. We need to do a full performance review audit and see exactly where is the money going to?” she said.
City officials call allegations of wrongdoing irresponsible. They have two more years to distribute the funds to north St. Louis city businesses. Now the process is being paused indefinitely over intense scrutiny.
A spokesperson with the city of St. Louis said there are two deadlines. December 31, 2024 is the deadline for all of the ARPA funding to be obligated, which means the city needs to know where the money is going. The $33 million for businesses in North St. Louis city is already obligated. The next deadline is December 31, 2026, when all of the money needs to be spent by. That’s when the city needs to have all of the funds in the hands of businesses.
A spokesperson with the St Louis Development Corporation, the economic development agency administering the grant program on behalf of St. Louis city, sent us the following statement:
“Allegations of nefarious or fraudulent activity associated with SLDC’s administration of the North St. Louis Small Business & Non-Profit Grant Program by Senator Schmitt or any other politician are completely unfounded and irresponsible. The concerns raised in Senator’s Schmitt’s letter to the U.S. Treasury — like the preliminary report from the Comptroller’s Office — do not provide an accurate or unbiased reflection of SLDC’s actions or processes. SLDC welcomes a professional and fact-based audit of the program, whether it is one we commission independently, or one conducted by the Comptroller, a third-party auditor or the Missouri State Auditor. We fully understand the immense responsibility that comes with deploying such an unprecedented amount of federal funds, and we recognize the importance of transparency and accountability in ensuring these resources reach the businesses and communities that need them most. SLDC paused the disbursement of funds in late September and will continue to hold off on releasing any funds until this matter is clarified.”