CLAYTON, Mo. — Clayton officials are considering next steps after health care giant Centene (NYSE: CNC) officially terminated the remainder of its deal to expand its headquarters in the city, foregoing future tax breaks that required the construction of a public auditorium.
Centene notified the city in a July 7 letter that the Clayton-based managed health care giant will not build the 1,000-seat civic auditorium that the company agreed to construct as part of a 2016 deal for a $775 million campus expansion. In exchange for including public benefits highlighted by the auditorium, Centene was to receive more than $80 million in subsidies over 20 years for the 4 million-square-foot development. After building the project’s first phase, a 27-story office tower, the company said in December 2020 it was pausing development on the second phase that would have included another office tower, a hotel, the auditorium and parking garages.
Under terms of the deal, Centene, St. Louis’ largest public company, had until 2024 to build the auditorium and potentially keep all the subsidies from the first phase of the project. In total, the company could have received an estimated $75.6 million in city, county and state tax abatements over 20 years, representing a property tax abatement of 40%. A separate $6.6 million from the Missouri Works program was to assist with funding 1,000 more jobs created at the new campus.
City officials are currently reviewing the development agreement to determine how and when the abatement will be revoked, said City Manager David Gipson. So far, the city’s only notice of default sent to the company was a March 2021 notice for failure to start building the second phase by the end of 2020, Gipson said. That terminated Centene’s development rights for the project. Gipson previously told the Business Journal that failure to build the auditorium could lead to Centene losing some of the first-phase subsidies, although there are no clawback provisions for subsidies already received in the first part of the deal. Clayton couldn't immediately say what Centene has already received.
Clayton Mayor Michelle Harris said Friday "it's just in the hands of attorneys now, to go through the process of unwinding the agreement and ending it."
Read the full story on the St. Louis Business Journal website.
