BERKELEY — The Boeing Co. has cut a deal with St. Louis County to build a new manufacturing facility, add hundreds of jobs and keep thousands more in the region. In exchange, the company will get tens of millions of dollars in tax breaks.
Construction has already begun. And as that project begins, another is winding down. Ten years ago, Boeing promised Missouri it would keep thousands of jobs in the state, and add hundreds more, in exchange for as much as $229 million in tax breaks.
Now the outcome of that deal is coming into focus: Boeing has lived up to the promises it set a decade ago. It has kept 13,900 jobs in the St. Louis area. It has added around 2,000 new positions. And it has received $129 million in tax breaks, according to data compiled by the Post-Dispatch, the newest of which was just released.
Politicians say such deals are worth cutting.
People are also reading…
“Off the top of my head, I can go through a list of corporate headquarters that are gone,” Republican St. Louis County Councilman Ernie Trakas said. “At the end of the day, if we don’t work to attract and keep a large corporate presence, we will continue to decline.”
But public officials have recently been more skeptical of development incentives. St. Louis Mayor Tishaura O. Jones has scrutinized public subsidies, vowing to reduce handouts in areas of the city already thriving. St. Louis County leaders were more publicly reluctant to pass the new tax deal with Boeing last year than council members were a decade ago. Critics point out that Boeing gets to set the rules of such deals.
“Boeing either rigs the game or makes sure that the existing game doesn’t apply to them,” said Jim Hall, former chairman of the National Transportation Safety Board and a frequent Boeing critic.
And county residents have packed council meetings to protest the incentives, spurred by Boeing arming Israel in its ongoing war in the Middle East.
“I grew up in North County and I see the way that the school systems are deteriorating,” said Nida Mutan, a protester, Florissant resident and second-generation Palestinian-American. “We could be putting these funds into so many better things. Millions of dollars going to Boeing is ridiculous.”
Boeing plays a huge role in the St. Louis region’s economy. It claims 16,700 workers at its regional facilities in north St. Louis County, St. Charles and Mascoutah. It is the second largest employer in St. Louis County, after Washington University, and paid $18 million in property taxes in St. Louis County alone last year.
Moreover, most of its employees are well-paid — the average salary for new employees was nearly $107,000 in 2023, according to state tax break records. That’s the kind of resident who buys a home here, goes out to restaurants, shops in the region’s malls, supports the schools and is coveted by business and civic leaders coast-to-coast.
Boeing is far from the only company to land mega tax deals in Missouri. Since 2000, the software company Oracle, the parent company to Kansas City-based Cerner Corp., has collected subsidies worth nearly $1.8 billion, the most in the state, according to an incentive database kept by Good Jobs First. General Motors, which has an assembly plant in Wentzville, has received almost $411 million since 2002. And Ford Motor Co. has received just under $173 million since 2001 for its Kansas City plant.
Boeing points out it has met all the requirements for the tax breaks. The incentives are meant to reward companies for growing jobs, but also for keeping the baseline level of employment in the state.
“Any incentives Boeing receives from the state are performance-based,” Boeing spokesman Kurt LaBelle wrote in an email to the Post-Dispatch. “If we don’t meet the measures in the agreement, Boeing doesn’t receive anything.”
A decade-long deal
Boeing’s current streak of tax incentives started more than a decade ago with a deal that didn’t end up happening.
On Monday, Dec. 2, 2013, Missouri Gov. Jay Nixon called a special session of the Legislature to consider a bill that would lure Boeing to build its 777X jet assembly plant in St. Louis County. The state’s application, pitching incentives on the company’s proposed $1.8 billion investment, was due in just eight days. Lawmakers passed the bill that Friday with unusual speed and bipartisanship, the Post-Dispatch reported then.
A month later, Boeing announced it would build the plant in Seattle. St. Louis would only build some of the wing components. Without the plant, the tax deal was moot.
Boeing’s Global Services & Support president Jim O’Neill (from left), Gov. Jay Nixon, Rep. William Lacy Clay and Rep. Ann Wagner attend a ground break ceremony for a new facility to build composites for the 777x commercial airplane on Tuesday, Dec. 16, 2014 at the Boeing Defense tooling center in Berkeley. Photo by Huy Mach, hmach@post-dispatch.com
Just a year later, the state readied another proposal. Policymakers were worried Boeing’s local employment could shrink as major fighter jet assembly programs wound down.
The new deal, approved in 2014, was called “Missouri Works.” It had three parts: Up to $146 million for keeping jobs in Missouri, up to $78 million for creating 2,000 new jobs and up to $5 million for job training.
The Post-Dispatch made more than a dozen requests for documents outlining the deal. This is what they show:
The state set tiers for retention benefits. The more jobs the company kept in Missouri, the more money it would get. The company could even lay off workers and still be rewarded, as long as employment numbers didn’t dip below 12,500.
In its 2015 application, Boeing first said the tax incentives would help it keep 14,500 jobs here — which would have earned it maximum benefits.
But in later filings, it downgraded to 13,900, meaning it fell in the middle tier, earning a maximum of $103.6 million.
That part of the deal was for 10 years, starting in January 2015, and ending at the end of this year.
Through the end of last year, Boeing had already been awarded $102.5 million, according to state data.
Boeing didn’t file for the next stage, new jobs benefits, until 2019. The company was allowed to set the baseline at 13,900 existing jobs. The state would count new employment above that baseline, and give the company tax breaks worth 7% of the payroll of the new workers. The goal was 2,000 new jobs, with benefits estimated at $77.9 million.
As of the end of last year, Boeing reported adding 1,880 jobs — after winning contracts for the T-7A training jet, the MQ-25A refueling drone, and the F-15EX strike fighter — and the state has awarded the company $26.2 million in breaks.
In each case, Boeing submitted annual public reports, though they contained scant information about new and retained jobs.
But at the same time, the state required Boeing to submit a private spreadsheet of all employees who qualified the company for the benefits, with thousands of entries, including wage and position data. State workers used that data to calculate actual benefits, according to the documents.
The new jobs benefits end in June next year, said Department of Economic Development spokeswoman Amy Berendzen.
And now Missouri and St. Louis County have set the stage for another decade-long deal.
A new urgency
On Aug. 8 last year, the county council heard pitches from elected officials, economic development staffers, and leaders in labor, education and transportation.
They wanted the council to approve incentives on a proposed $1.8 billion assembly plant in St. Louis County that would come with 500 new jobs. Boeing had its eye on the site of a Berkeley subdivision long cleared of homes under Lambert’s flight path — one of the sites Boeing considered a decade ago.
There was again urgency in the new proposal.
State and local officials had been working behind the scenes for more than a year on the deal. The company needed the county’s help as quickly as possible to secure a federal contract for an undisclosed project, possibly the next generation of American fighter jets. Boeing is still competing against its Maryland-based rival, Lockheed Martin, for that contract.
The council took a final vote on the $155 million incentive package on Tuesday, Sept. 19.
But the tone was different than at the meeting a decade ago. Some felt they had no choice but to approve the incentives.
“I would love to live in a world where the playing field was level,” said Democratic Councilwoman Lisa Clancy, of Maplewood. “Unfortunately that’s not the case. To even have a chance of getting this major expansion, the city, the county and the state have to make some economic concessions.”
The bill passed with only one no vote, from Chesterfield Democrat Kelli Dunaway, who argued incentives hurt working families.
A few weeks later, the state approved an additional $6 million in aid to help Boeing with its expansion.
Boeing has now started preparing the 106-acre site at the east end of St. Louis Lambert International Airport. The facility’s specific purpose is still a secret.
LaBelle, the Boeing spokesman, said the company plans to continue construction regardless of its success landing the federal contract.
“We need to be prepared to begin work when contracts are awarded,” he said. “Waiting to build facilities after contract award is too late for our customers.”
Airport officials expect Boeing to begin making lease payments — $2.63 million a year — once it begins using the manufacturing complex.
Members of the St. Louis County Council discuss their rationale before voting on a property tax break for Boeing on Tuesday, Sept. 19, 2023. Video courtesy of the county government; edited by Beth O’Malley
A pro-Palestinian group is met by a Boeing employee while they protest at a Boeing facility in Saint Charles. Video by Christian Gooden, Post-Dispatch
