ST. LOUIS, Missouri — Tens of millions of dollars in federal grant funds are coming under increasingly intense scrutiny in the city of St. Louis after several politically connected families were awarded small business grants through a "competitive" process that went through the Mayor Tishaura Jones' office, Board of Aldermen President Green's office, Comptroller Darlene Green's office, and the head of the St. Louis Development Corporation, whom the mayor appoints.
'We Don't Believe You'
"It leaves a bad taste in the mouth of so many people in our community," hair salon owner Tameka Stigers told 5 On Your Side on Wednesday afternoon. "The public trust is gone in our leadership. It's gone because we don't believe you. We don't believe you're going to do what you say you're going to do with the funds."
Stigers, who owns and operates a Black-owned hair salon and spa named Locs of Glory on Delmar Boulevard in North St. Louis said her application seeking funds to expand her operation and hire four to five new employees was not approved.
Stigers is just one of several small business owners who applied for a share of $37 million in funding through the North St. Louis Small Business and Non-Profit Grant Program, which comes from American Rescue Plan Act funds. Many of them feel they were unfairly left out while they watched families with political clout get ahead.
At a board meeting on Thursday morning, St. Louis Development Corporation Chairman Neal Richardson sought to address some of the growing concerns from local business owners who feel spurned after being left out.
'Is it a community amenity?'
"I think the challenge is when we get to the competitive process, some of those decisions around the impact of the project itself," Richardson said. "Is it a community amenity, such as a grocery store, healthcare facility or daycare facility? Some of that decisioning was made on those competitive programs."
SLDC guidelines told applicants they would need to demonstrate their business or nonprofit "fills a gap in needed neighborhood services, to include professional or health services or enhanced retail or cultural offerings" to qualify for funding.
In some cases, adult day care facilities that provide services for people with severe developmental disabilities were left out while bar owners with political clout were included.
Former Mayor Freeman Bosley Jr. won a $100,000 grant for his north side bar the Grand Zodiac Lounge. While the grant allocation is headed to a legitimate business operation, it raises further questions about a scoring system that would boost liquor sales over the financial stability of nonprofits providing care for some of the most vulnerable people in the city. Bosley declined comment when a reporter paid a visit to his bar on Wednesday afternoon.
"There's former politicians all throughout that list," Tameka Stigers told 5 On Your Side. "People are saying, you know, 'You're snitching. You're talking.' No, we're speaking up."
Two weeks ago, the Post-Dispatch scrutinized at least three other grant allocations that were awarded to friends or members of the politically clouted Hubbard family.
'There's former politicians all throughout that list'
Former Missouri House Representative Rodney Hubbard Sr. won a $500,000 grant for his nonprofit 'Carr Square Tenant Organization.'
His former aide, Todd El Irons, was awarded a $15,000 grant for 'The Boomerang Store.'
Ebony Washington, a former candidate for alderwoman and niece to current alderwoman Shameem Clark Hubbard, was awarded $739,000 for a new nonprofit she launched last fall called 'The People Project Corporation,' despite limited financial history, no website, and a campaign headquarters registered to a residential address that has no apparent public-facing operation underway.
All three grants awarded to the Hubbard family network have now been put on pause, pending further review for any potential conflicts of interest.
"We have identified three businesses that were in question around an appearance of impropriety, and so we have requested that the city councilor address those as well as she provides her legal opinion and legal guidance," Richardson said.
In an open letter to the city of St. Louis, Alderwoman Clark Hubbard distanced herself from the grant process and the bill she sponsored that expanded eligibility to a wider pool of applicants.
"The Mayor's Administration and SLDC requested the revision to expand the geography to ensure a more equitable access to this transformative funding," Clark Hubbard wrote. "Once the legislation was passed, I had no further involvement in the creation, implementation, or selection process of the North St. Louis Small Business and Non-Profit Grant Program."
The noted the yearlong delay between the time the bill passed and SLDC began hearing about a list of awardees.
'I explicitly recused myself'
"During this meeting, I explicitly recused myself from any involvement in SLDC votes or discussions where immediate family members or their affiliated organizations were involved," Clark Hubbard wrote.
Some of the ties linking business names and their listed addresses to politically connected families weren't quite as obvious.
One winner, Kayla B Beauty, LLC, won a $17,172 grant for a for-profit business listed at 5979 Dr. Martin Luther King Drive. However, that address leads to a vacant lot next to a community garden. Property records list the plot of land under a different owner's name. When reached by phone, he didn't know anything about the beauty shop.
State business records list Kayla B Beauty, LLC, under a different residential address about three blocks away. Family inside reviewed the documents and said the original storefront address was one digit off. It should've read 5879 Dr. Martin Luther King Drive, they said.
That address featured two locked front doors underneath an old maroon awning that reads, "22nd Ward Headquarters."
Following the money to a former alderman's ward office
The paper trail for the $17,172 grant led back to the campaign headquarters for disgraced former Alderman Jeffrey Boyd. That's where he was working when he went to federal prison for corruption charges after the FBI caught him accepting bribes. Kayla Boyd is his daughter, and while U.S. Treasury guidelines may not automatically disqualify the direct relatives of federal felons from applying for grant funding to support a legitimate business operation, the doors were locked, lights were off, and there was no sign of any business operation during the middle of a weekday.
"No one showed up to my business to vet my business," Stigers said. "I see a lot of things that don't make sense."
"SLDC took the vetting process there very, very seriously," SLDC Vice President of Programmatic Compliance Lorna Alexander said.
"Were there some bad actors? Absolutely," Alexander said. "Were people trying to get as much of this opportunity as they could? Yes. So they might have given us a building that was vacant, that belonged to the family, but it was a North City address. They had a deed on it. It belonged to them. So only then -- and when we provided the list of the conditional award -- only when we go out and do that viability assessment, do we realize that to be true. And so once we find out that's true, then those businesses are removed from the list and deemed ineligible."
"We still have 160 viability assessments to complete," she said.
One grant worth $1.5 million went to Sweetie Pies Upper Crust, a well-known business that closed two years ago. But when its name appeared under a list of awarded grants, the St. Louis Development Corporation listed it at a new address at 4901 Delmar.
'Clerical Errors'
Executives who worked at that address told 5 On Your Side someone at the city told them it must've been a "clerical error."
"We were told that it was a mistake," Kingsway Development president Kevin Bryant told 5 On Your Side. "That money should not have been attributed to this address and it had nothing to do with us."
Bryant said the city's sloppy grant process runs the risk of squandering a rare chance to spark a generational comeback.
"There's a short window to get this right. So I'm frustrated, I'm confused," he said. "It's once-in-a-lifetime money. For projects north of Delmar, we may never see this amount of investment again. So we were glad to see that 30-plus million was allocated for north of Delmar. We just hope and pray that it's allocated into the right projects."
"Sweetie Pies isn't in business," SLDC Board Chair Matthew McBride said during Thursday morning's board meeting. "So it doesn't have a 2023 payroll. They've been in front of my board previously and are very transparent about that. So I don't understand how they could even get through any process."
"We are still needing to verify that payroll," Richardson said. "That payroll has not been submitted to us, and once we're able to either verify that they meet the muster or they don't, they would then fall off the list."
A few blocks away, signs of investment are starting to show up in North St. Louis. A vacant plot of land along the same stretch of Dr. Martin Luther King Jr Drive shows artist renderings of a new $7 million mixed-use facility called 'The Easton' with storefronts on the first floor and affordable housing units above them.
"This is the first of its kind in 30 years over here in this neighborhood," Young Voices With Action board member Robert Cleveland said.
The nonprofit provides youth counseling and promises to bring hope to a part of town where that's often in high demand and short supply.
'We Know How We Got Here'
"We know how we got here," Cleveland said on a street surrounded by vacant, boarded-up buildings. "Same thing that happened to Tulsa, Oklahoma. Same thing that happened to East St. Louis. Kinloch, Missouri, as well. People coming in, taking advantage of it. Then they leave. This is the aftereffect of it."
While the construction site sign bears the logos of the city of St. Louis, SLDC, Easton Development Corporation, Cobalt Construction Consulting, general contracting firm Russell, and Core 10 Architecture, the $1.5 million grant was awarded to the nonprofit group Young Voices With Action.
The SLDC guidelines said funds would only be available to "established businesses expanding into eligible geographic areas with site control." While Young Voices With Action is an established nonprofit, the other yet-to-be-named tenants who could one day occupy this site have not yet been publicly listed. The contractors expect to break ground later this year and cut the ribbon on some part of the new building in 2025.
Other large nonprofit groups with deep community ties won the largest sums of money. The Urban League of St. Louis, the Herbert Hoover Boys and Girls Club, and AMIC STL, each won grants worth $2 million.
'Mom-and-Pop Shops Don't Have That Kind of Leverage'
"The bill was passed to help small businesses, small nonprofits, be able to bounce back from Covid," Stigers said. "It's Covid relief money. It was emergency money."
While Stigers said she respects and admires the work those established groups do in the community, she questions why the city's scoring process would prioritize well-funded organizations that already have several streams of taxpayer funding propping them up over the smaller businesses struggling to survive.
"The Urban League has a $50 million budget, okay? The CEO of the Urban League makes a million dollars a year," she said.
[Tax forms filed in 2022 show the Urban League of Metropolitan St. Louis pays its CEO an annual salary of $392,728.]
"Why take a small amount of $37 million and allocate such a large amount to entities that already receive government resources when you have the mom-and-pop shops don't have that type of leverage, don't have access to the type of capital that they already have access to? It's not wise spending of the money," Stigers said. "That's our opinion as small businesses, and we're sticking to that. The aid was sent for relief. There's no relief for the small businesses. There's none."
Last February, Missouri Governor Mike Parson attended a groundbreaking ceremony at the Advanced Manufacturing Innovation Center of St Louis (AMIC STL) to announce Missouri taxpayers would be kicking in $15 million to the project. Site organizers touted another $7 million in ARPA grant funds at the time. The city of St. Louis added another $15 million in New Markets Tax Credits on top of that.
"They've also received 5 million from Boeing," Stigers said. "It's run by the ex-CEO of Boeing. They don't need $2 million of this small pot of money. There's other monies that they can get from ARPA. Why get it from this pot?"
'They won't be receiving these funds'
"We're united," Bryant said. "I totally support Tameka. Tameka has been consistent. She's been a business owner here a couple of decades, maybe. And you know, she's a taxpayer. She and a lot of other applicants really need and deserve that money. So yeah, none of us understood the rules of how it was being dispersed. We only know what our projects are and how it improves our part of the community. But yeah, that's a heartbreaking thing right there."
"This sits at the mayor's footstep," Stigers said. "She appoints the SLDC president. She appoints the board."
A spokesman for Mayor Jones highlighted the ongoing vetting process at SLDC.
"The only funds that have been dispersed through the North St. Louis Small Business & Non-Profit Grant Program are the $5,000 Capacity Building Grants and $15,000 Stabilization Grants," Chief of Staff Jared Boyd said. "All other awards are still in the preliminary stages while SLDC completes its due diligence, checking that these organizations are compliant and have the capacity to complete their projects. If any awardee is found not in compliance or unable to complete the project outlined in their application, they won't be receiving these funds."