6.16.19 SB_C

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J O I N U S O N L I N E S T L T O D A Y. C O M / B U S I N E S S

SUNDAY • 06.16.2019 • C

CRAFTING A BETTER PLAN

Critic of merger offers alternatives

DAVID NICKLAUS St. Louis Post-Dispatch

David Rusk spent as much time as anybody picking apart the now-abandoned Better Together plan. He’s written 11 white papers, published by Construction Fo-

rum STL, in which he criticizes everything from the plan’s financial assumptions to its penchant for centralizing things that don’t need to be centralized. When Rusk came to town Wednesday, though, he also wanted to talk about three things Better Together got right. One is that many municipalities in St. Louis County are too small to fund their infrastructure needs. Another is that fragmented government is closely connected to racial and economic segregation. The third is that fragmentation can hold back economic growth. Rusk, who was part of a Con-

struction Forum speaker series, is worth listening to on these issues. He’s been mayor of Albuquerque, N.M., and a scholar at various think tanks, and his book “Cities Without Suburbs” has influenced a generation of urban planners. Though he wasn’t a fan of the Better Together plan, Rusk doesn’t believe doing nothing is an option for St. Louis. He also thinks any future reforms should be sold on the basis of making government better, not cheaper. “It’s tempting, but you must not sell any kind of a merger on the basis of saving money,” he said. “What you can sell is a bet-

ter, more professional standard of service. You need to find a way to establish structures … that can facilitate cooperation, and then let people reap the benefits.” Rusk endorses having the city re-enter St. Louis County, which could be accomplished through a board of freeholders. The St. Louis County Municipal League is already gathering signatures to start such a process. That change alone, however, would do little to address the inequities that are one of the region’s most pressing problems. Rusk would like to see the Missouri Legislature expand St. Louis

BUSINESSES SPROUT IN ‘GREENCUBATOR’ Building on riverfront houses food-based companies

County’s sales-tax pool, ending the system where some cities keep revenue from sales inside their borders. He’d also like to see some property-tax sharing, as is done in the Minneapolis-St. Paul area. He suggests that St. Louis County, which has a triple-A credit rating, could guarantee municipalities’ bonds. This would allow the cities, most of which can’t access credit markets on their own, to borrow money for capital improvements. In addition, Rusk would create what he calls “communities Please see NICK, Page C3

Investors’ tariff fear stalls U.S. retailers

China’s slow growth harms luxury market BY AISHWARYA VENUGOPAL AND NIVEDITA BALU

Reuters

CHRISTINE TANNOUS PHOTOS, CTANNOUS@POST-DISPATCH.COM

Good Life Growing is beta testing different kinds of gutter systems at the Greencubator, on Lumiere Place Blvd. north of downtown. BY ANNIKA MERRILEES

St. Louis Post-Dispatch

Three small businesses are sprouting up near St. Louis’ riverfront, in a building dubbed the “greencubator.” In 2009, a factory north of downtown that printed labels and tags for food packaging relocated to Collinsville, leaving the space abandoned. The building was nearly sold to make way for a proposed new football stadium development, but when the NFL left St. Louis, Sev-Rend CEO Robert Williams Jr. was left without a plan for the property. At the end of 2016, the nonprofit Justine Petersen accepted

the building as a donation from Williams, and went about figuring out the best use of the space. Eventually an idea took hold: convert the building into a place for urban agriculture and foodbased businesses. After all of the attempts to develop the riverfront, said Galen Gondolfi, chief communications officer for Justine Petersen, “could it all of a sudden potentially become, you know, this Cortex on the riverfront? ... And if not a Cortex, at least a hub for startup activity?” The building at 1124 Lumiere Please see INCUBATOR, Page C4

Bobby Forbes, co-founder of Good Life Growing, checks their newly installed gutter system at the Greencubator.

The first half of 2019 was expected to be a boon for U.S. retailers, buoyed by solid consumer sentiment at home and expansion in China — the market many of them have targeted for the future. Instead, new tariffs that President Donald Trump slapped on some Chinese imports last month and fears that more could come in the escalating trade conflict between Washington and Beijing had many investors bailing from the sector. The tensions have hovered as a potential risk for markets for more than two years. But what really unsettled investors in the latest round of earnings calls was retailers admitting that tariffs were starting to bite and how little they had to say on how they could soften the blow. Best Buy Co. Inc. and Walmart warned higher duties would put pressure on prices for U.S. consumers, while Macy’s Inc. and J.C. Penney Company Inc. said their businesses would suffer if tariffs were extended to include apparel and footwear. Kohl’s Corp. said trade tensions were one of the reasons for a cut in its profit outlook and called the situation “fluid.” “We have been watching this tariff story play out,” said Tony Scherrer, director of research and a portfolio manager at Smead Capital Management. “There doesn’t seem to be in the immediate term (any sign) of things getting any better.” Many high-end brands have relied on China to boost sales Please see RETAIL, Page C4

Deflated Paris Air Show? Grounding of Boeing plane looms large BY DAVID KOENIG

Associated Press

Uncertainty over a Boeing jet and apprehension about the global economy hover over the aircraft industry as it prepares for next week’s Paris Air Show. That show and its alternatingyears companion, the Farnborough International Airshow near London, are usually upbeat celebrations of the latest and greatest in aviation technology. In recent

boom years, they have become a stage for huge aircraft orders. This year, however, the mood could be different. The Boeing 737 Max has been grounded worldwide for three months after new flight software played a role in two deadly plane crashes. There is no clear date for when it might fly again. There are other troubling signs for the industry. After several years of surging growth, passenger traffic in March grew at the weakest rate in nine years, although April was slightly better. The chief of the International Air Transport

Association, a global airline trade group, blamed a slowing global economy and damage from tariffs and trade fights. Air cargo shipments — considered a leading economic indicator — fell 4.7% in April, continuing a slump that began in January and could dent demand for air freighters. And airlines have committed to buying so many planes that Boeing now has a backlog of 5,500 orders and Airbus has 7,200 — far higher than usual. Airlines might not have much appetite for more. Please see BOEING, Page C4

MICHEL EULER, AP PHOTO

Boeing planes are on display at the 2017 Paris Air Show. Uncertainty over a Boeing jet and apprehension about the global economy hover over the aircraft industry as it prepares for next week’s Paris Air Show.

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