Fenton Withdraws From Grant Program to Market Chrysler Site

Fenton is officially out of a grant program to market the former Chrysler plant and is formally seeking a large portion of its original seed money back.

The Fenton Board of Aldermen recently approved legislation withdrawing its participation in a Section 209 Economic Adjustment Strategy Grant from the U.S. Department of Commerce's Economic Development Administration (EDA).

The city joined in the EDA program in 2009 with the St. Louis County Economic Council and the Missouri Department of Economic Development. The $2.1 million grant called for Fenton to contribute 6.25 percent, or $131,250; St. Louis County to contribute 6.25 percent ($131,250); the state 12.5 percent ($260,000) with the remaining 75 percent ($1.6 million) coming from the federal government.

The grant was set to expire this month, but Fenton Mayor Dennis J. Hancock said the St. Louis County Economic Council notified the city last month of a revision to the plan that would extend it for another year.

Now the city is seeking between $80,000 and $90,000 of its original $131,250 contribution to the grant project. So far, Hancock said, a total of approximately $500,000 has been spent on the study. He said the Economic Council's plan to extend it by another year and spend the entire $2.1 million on other projects had no benefit for Fenton.

According to Hancock, some of the projects the grant would continue to fund included creating an “Asian Trade Desk" to strengthen and broaden the World Trade Center-St. Louis' efforts to identify, guide and prepare companies to take advantage of export opportunities to Asian countries.”

“What we're requesting is a refund of whatever hasn't been spent of ours and we're estimating that to be between $80,000 and $90,000,” Hancock said. “We're making the refund request to the people who have been in charge of the project and in charge of spending the money. We didn't give the money to the EDA. The money was put into a fund along with the money from the state, and the county's portion, I believe, was mostly in-kind. It was our understanding it was all handled locally through the county's economic council.”

Douglas Rasmussen, senior vice-president and division director of the St. Louis County Economic Council's Business Development, said the EDA is waiting for an “inquiry or formal request” for a refund to Fenton and that “it will really be up to the EDA and City of Fenton and whatever they to work out.”

Hancock said when the city first discussed getting involved in the grant program Chrysler had just closed both assembly plants “and there was a lot of uncertainty about what, exactly, the next steps were going to be.”

“We felt it was in everybody's best interests to work with the state and county to try to determine what the next, best use for the property was,” Hancock said. “So we commissioned the study that was done and applied for the grant to fund it. The study has been done and we feel that the purpose of the grant has been fulfilled and that we've lived up to our end of the obligation. We don't see much point in just spending money because it's in a grant that you received. If the purpose of the grant has been fulfilled we would prefer to take the money and invest it back into our city and some other things. We can spend $80,000 just as well as the county can.”

Hancock said an option now that the assembly plant building have been demolished would be to subdivide the 300-acre site so that several buyers could come in and buy smaller pieces of the property.

The Economic Council's Rasmussen said they were “disappointed that the city made that decision and are certainly respectful of the choice they decided to make.”

He added Fenton's withdrawal “will not effect us at all and we're going to be moving forward.”

He  also called the Chrysler closing a “huge event in terms of the impact, but we feel like we have a great plan we're going to effectuate that will pay some real dividends for the county and the region.”

“I think that we certainly would love to move forward with Fenton and certainly, if they were ever to reconsider, we'd love to have them,” Rasmussen said. “At the outset this was really a regional economic development adjustment strategy and so part of that is it that it takes a broad look at ways in which we can re-position the economy, coming out of what was a job loss of over 40,000 jobs and and an economic output loss of $15.5 billion.”

Rasmussen said the council's history with economic adjustment grants has “proven very successful” and mentioned similar grants they obtained when McDonnell Douglas had a massive layoff. He also mentioned the formation of the World Trade Center in Clayton and the creation of business incubator programs as other examples.

Rasmussen said marketing the vacant Chrysler plant will continue and added they believed there was interest in the site until the assembly buildings were recently torn down and sold for scrap by Capstone, the bankruptcy liquidator trustee.

"When those plants were torn down and sold for scrap value, that portion of the grant was removed  because that meant that manufacturing asset was no longer there to attract a new manufacturer,” he said. “That point aside, we're working very actively and in partnership with Fenton and with NAI DESCO, who is
the marketing agent hired on behalf of Capstone to try to find new users to go to that site.”

The marketing has never stopped and the study was really looking at a way to re-position the manufacturing infrastructure, but since that was torn down by the liquidation trustee, now we will continue to market it with the liquidation trustee, the city and the state and others to find new users who could come in and redevelop that property.”