State incentives could jump-start downtown redevelopment

Governor Mike Kehoe signed House Bill 3231 on July 13, expanding Missouri’s redevelopment incentive toolkit in a move St. Louis officials and business groups have said could help revive long-stalled downtown projects. The law broadens the Missouri Downtown and Rural Economic Stimulus Act, or MODESA, and creates an innovation-zone framework that supporters say could help finance office conversions and other large redevelopments in the city’s core. Missouri’s Senate bill summary says the measure increases allowable tax increments, extends project durations and broadens the kinds of projects and revenues that can qualify. Greater St. Louis Inc., which backed the legislation, said the package was designed to help catalyze redevelopment of vacant properties including the AT&T building and the Railway Exchange Building. St. Louis Public Radio reported in May, before final passage, that the proposal was aimed at making it easier to convert office buildings into housing in downtown St. Louis. (governor.mo.gov) ### Which state incentives actually changed? HB 3231 modifies MODESA by expanding the taxes and other revenues that can be captured in a redevelopment area, according to the Missouri Senate’s bill summary. The summary says the law also allows more flexibility in how project areas are defined and administered and permits broader “expanded development projects.” (greaterstlinc.com) CivMetrics, summarizing the enacted law, said the package includes up to $50 million in annual office-to-residential tax credits statewide, plus access to income-tax exemptions, property-tax abatements and tax increment financing for qualifying projects. The same summary said qualifying conversions could receive a 25% to 30% tax credit, depending on the building and location. (senate.mo.gov) ### Why are downtown St. Louis buildings central to this push? Greater St. Louis Inc. said the legislation was written with major vacant downtown properties in mind, naming the AT&T and Railway Exchange buildings as examples. The group said the bill could bring “hundreds of millions of dollars” in new investment to downtown St. Louis, though that estimate came from the organization rather than the state bill text. (civmetrics.com) The City of St. Louis has already been trying to stabilize some of those sites. A city release in July 2024 said then-Mayor Tishaura Jones, the Department of Public Safety, the St. Louis Development Corporation and Greater St. Louis Inc. had taken steps to secure and stabilize the Railway Exchange Building. A September 2024 city statement said SLDC and Greater St. Louis Inc. had delivered a 120-day report with a plan for major vacant properties downtown. (greaterstlinc.com) ### How does the innovation-zone piece fit in? Governor Kehoe’s office said HB 3231 created the Missouri Innovation, Public Safety and Accountability Act, a statewide economic-development measure tied to local growth efforts. Greater St. Louis Inc. said the law creates new innovation districts, while CivMetrics said local leaders could apply to the Missouri Department of Economic Development for an innovation-zone designation. (stlouis-mo.gov) CivMetrics said projects inside an approved zone could gain access to a broader stack of incentives and that St. Louis could retain 50% of new state sales taxes and income-tax withholdings generated inside the district for uses including police, lighting, cameras, sidewalks and other infrastructure. That description comes from CivMetrics’ reading of the law and not from a state-issued implementation guide. (governor.mo.gov) ### What has city government said about downtown funding more broadly? Mayor Cara Spencer signed Board Bill 22 on July 13, committing Rams settlement money to several priorities including downtown revitalization, according to the city. A city release said the broader settlement package included $55 million for downtown revitalization, separate from the state incentives in HB 3231. (civmetrics.com) St. Louis already has a downtown economic stimulus authority under city ordinance, and the city’s development agencies also administer tools such as tax increment financing. The new state law adds to that existing structure rather than replacing it. ### What happens next for downtown projects? August 28, 2026, is the effective date listed on the Missouri Senate and House bill pages for HB 3231 and related legislation. (stlouis-mo.gov) That means the state framework is now in place for local officials, the Department of Economic Development and developers to begin pursuing approvals under the expanded rules. (stlouis-mo.gov) Mayor Cara Spencer joined Kehoe and Greater St. Louis Inc. leaders at a ceremonial event in St. Louis on Sept. 2 to highlight HB 3231 and another downtown-focused law, according to Greater St. Louis Inc. and local coverage. The next concrete step is likely to come through project-specific applications and approvals tied to named buildings, incentive packages and financing plans. (greaterstlinc.com) (senate.mo.gov)