Welcome to Finance World

Last Sunday, I reviewed the major credit cards that give you cash rebates once a year, linked to your spending.

Readers were quick to suggest some great deals I missed.

The no-fee Citi Enrich MasterCard provides 1 per cent cash back on all your spending. The maximum rebate is $250 a year.

With a no-fee Canadian Tire Cash Advantage MasterCard, you also get 1 per cent cash back on all spending. But on all purchases at Canadian Tire stores and gas bars and Mark’s Work Wearhouse, you get a rebate of 2 per cent.

This week, I want to talk about credit cards that give you discounts on life’s essentials – such as groceries, gas and new cars.

When it comes to groceries, the no-fee President’s Choice Financial MasterCard provides 10 points for each dollar spent on the card.

Once you get 20,000 points, you can redeem them for $20 in free groceries at participating supermarkets where PC products are sold. That’s a 1 per cent rebate on all your spending.

Laurentian Bank has a no-fee Visa Black Reward Me card. You get one point for each dollar spent, which you can redeem for gift cheques at 30 participating merchants. For example, with 2,600 points (or $2,600 in spending), you can get a $20 Starbucks card. With 3,250 points (or $3,250 in spending), you can get a $25 card for M&M Meat Shops.

Gasoline discounts are a big draw ever since prices hit $1 a litre. With Laurentian Bank’s Visa Black Reward Me, you can get a $25 Esso card with $3,250 in spending.

Canadian Tire has a no-fee Gas Advantage MasterCard, which gives a discount of 10 cents a litre at company gas bars if you spend $2,000 or more in a billing cycle.

That 10-cent-a-litre gas discount used to be available with more than $1,000 in monthly spending until July 1, 2008. That’s when the rules were changed.

Now you get eight cents a litre off gas if you charge more than $1,000 (and less than $2,000) to your card in a billing cycle, five cents a litre with $500+ monthly purchases and two cents a litre with purchases of up to $500 (instant pay day loan).

To save money on a new car — specifically, a GM vehicle – check out the no-fee GM Visa card offered by TD Bank.

This card gives you 3 per cent in earnings. For example, if you spend $2,000 each month, you will contribute $60 a month toward the purchase price or lease down payment on a GM car or truck, up to $720 a year.

The no-fee Citi Driver’s Edge Platinum MasterCard has a lower benefit level, but more flexibility. You get 2 per cent cash rebates on any new or used car, truck, motorcycle, motor home or all-terrain vehicle you buy or lease in Canada up to $5,000.

You may be confused about which credit card to get. How do you compare rewards, interest rates, annual fees and insurance benefits (such as trip interruption coverage or collision damage waivers on rented vehicles)?

The Financial Consumer Agency of Canada has an online Credit Card Interactive Tool at www.moneytools.ca, a good place to go to start your comparisons. (There are also links to the credit card companies’ websites.)

Next week, we’ll check out a product marketed heavily by many card issuers. Is credit balance insurance worth buying?

Clarification: BMO’s Premium Cashback Reward option on its Mosaik MasterCard provides a 3 per cent rebate at Shell gas stations (not 2 per cent, as I wrote last week).

Ellen Roseman’s column appears Wednesday, Saturday and Sunday. eroseman@thestar.ca

Sourse

If you want to see how America’s credit crisis is hitting the streets of your hometown, go to your local car dealer. Auto dealers depend on credit. They need it to run their stores and their customers need it to buy their products. From every angle, credit trouble hurts.

"I’m talking to dealers every day who are just hanging on," said Denny Fitzpatrick, Chairman of the California New Car Dealers Association and owner of Fitzpatrick Chevrolet Hummer in Concord, Calif.

There could be 300 to 400 fewer auto dealerships in America by the end of the year, predicted Paul Taylor, an economist with the National Automobile Dealers Association. In an ordinary year of economic growth, the industry adds 75 to 150 dealers, he said.

High gas prices that have turned buyers away from large trucks and SUVs - and all but obliterated Hummer sales - have hurt his business, but Fitzpatrick thinks tight credit is doing even more damage.

"We’re seeing people with Beacon scores that are pretty darned good," Fitzpatrick said, "and the finance companies are just looking for reasons to turn them down."

Not every car dealer sees the situation as that dire. John McEleney, president of McEleney Autocenter in Clinton, Iowa and vice chairman of the National Automobile Dealers Association, says he understands that things are hard, but his business is holding up fairly well.

McEleney owns several dealerships and sells several General Motors brands as well as Hyundai and Toyota cars and trucks.

"Probably the most direct effect for me has been availability of retail financing for my customers," said McEleney.

So far his customers can still get auto loans, McEleney said, but they may need a bigger down payment.

"I wouldn’t say it’s that dramatic, yet," he said.

Fortunately for him, McEleney said, Iowa didn’t experience the run-up in home prices other parts of the nation did, including California. That’s means it hasn’t experienced the home equity crash, either.

In most of the country, the collapse of the housing market has left consumers without the low-cost home equity loans that drove car sales in recent years. Also, the drain of home equity has left potential customers feeling poor, said NADA economist Paul Taylor. That, as much as the actual loss of low-interest credit, has hurt car sales.

With sales down, auto dealers who carry large inventories are experiencing their own credit squeeze.

"The cost of doing business is going up," said Mike Jackson, chief executive of AutoNation, the country’s largest car dealership chain. "Especially on floorplanning with domestics."

"Floorplanning" is the line of credit dealers use to pay for their inventory. Domestic-brand auto dealers who carry large inventories will be among the first to die, Jackson predicts.

Floorplan loans become burdensome the longer cars go unsold. For the first three months a car is in inventory, interest on the floorplan loan is usually reimbursed by the manufacturer. Later, if a vehicle is still there after about six months, finance companies can start demanding payment on the principal on the loan.

As credit markets have tightened, GMAC and Chrysler Credit have raised interest rates and what are called "curtailment" costs, the cost of having vehicles in inventory for a long time, according to reports in the industry newspaper Automotive News. (GMAC and Chrysler credit would not confirm those reports.)

"When you’re scrambling with cash flow like this, it’s ‘How are we going to pay these costs?’" said California dealer Fitzpatrick, who finances his inventory through GMAC.

Many dealers have learned to operate with leaner inventories, said Iowa’s McEleney.

"When a dealer is called upon to pay down $100,000 to $200,000 in inventory they have to look to other outlets," said McEleney. Those other "other outlets," other credit sources to draw from to pay curtailment costs, are no longer easily accessible, he said.

Finance companies have an incentive not to squeeze high-performing dealers too hard, McEleney said. Pushing away a good car dealer means driving away a lot of potential consumer auto loans.

"Historically, that’s been a very desirable piece of business from a lender’s standpoint," he said.

That gives big, multi-store dealers more bargaining clout with lenders, said NADA economist Taylor. For example, Asbury Automotive, a large national dealer chain, recently announced that it had locked in a line of credit with several banks. Smaller dealers can’t do that and their interest rates have been fluctuating widely, said Taylor.

Squeezing dealers on curtailment costs can be a way for manufactures and their affiliated auto finance companies to weed out dealers they see as underperforming, Fitzpatrick said. GMAC has been scrutinizing his dealership’s finances more closely, he said. (GMAC could not immediately comment on Fitzpatrick’s complaints. A spokewoman for General Motors said GM plays no role in floorplan financing.)

"The big question is ‘Who’s going to be left standing?" he said. 

Sourse

The United States needs to act urgently to shield its economy from an escalating credit crisis and Europe must ready plans in case its problems worsen, the head of the International Monetary Fund said on Tuesday.

“We’re right at the moment where action is needed,” IMF Managing Director Dominique Strauss-Kahn told Reuters.

“A non-perfect plan is better than no plan at all,” he said of the $700 billion bank bailout plan rejected by the U.S. House of Representatives on Monday.

Strauss-Kahn said restoring market confidence required the bailout plan to be passed quickly and for the U.S. public to understand what is at stake unless the economy starts to function properly again.

As the crisis has spread beyond Wall Street, European countries have stepped up their efforts to avoid bank defaults as concerns grew that more institutions would fail, prompting the Irish government to guarantee all bank deposits.

The lack of a pan-European regulator makes it more difficult to respond to the crisis in the event of the collapse of a big bank whose business crosses borders, Strauss-Kahn said.

“Developing a contingency plan does not mean it’s announcing a lot of trouble coming. But they’re not totally immune (from the U.S. financial crisis), and so they need to organize. At the European level this is totally needed.

“The EU rules make it much more difficult than in the U.S.,” to act across borders, he said. 

Read more

Oil prices tumbled more than $6 a barrel Monday, briefly slipping below the $100 level as traders bet that global demand for petroleum products will keep falling despite a planned $700 billion U.S. financial bailout.

A stronger dollar also weighed on crude prices as investors who bought oil and other commodities as a hedge against inflation sold their contracts.

Light, sweet crude for November delivery fell as low as $99.80 a barrel in morning trading on the New York Mercantile Exchange, before edging up slightly to $100.28, down $6.61.

The contract fell Friday $1.13 to settle at $106.89. Crude has now fallen 31% since surging to an all-time record of $147.27 on July 11.

Monday’s sell-off was tied to anxiety over the pending U.S. rescue plan. Following a week of intense negotiations, lawmakers could hold a final vote on the emergency measure Wednesday.

But investors are doubtful whether the plan will be enough to unfreeze global credit markets and restore calm to the financial system.

Global credit markets remain extremely tight, crippling companies’ ability to raise capital and cover basic costs like payroll. If the economy weakens further, consumers and businesses around the globe would likely cut back on energy use even more, analysts say.

"The market is clearly questioning whether the bailout will be enough to prevent a stronger economic downturn. That obviously has potentially negative implications for oil demand growth," said Michael Wittner, global head of oil research at Societe Generale in London.

In another sign of declining U.S. demand for fuel, pump prices kept falling Monday. A gallon of regular slipped about a penny overnight to a new national average of $3.643, according to auto club AAA, the Oil Price Information Service and Wright Express.

The rescue plan would give the administration broad power to use hundreds of billions of taxpayer dollars to purchase devalued mortgage-related assets held by cash-starved financial firms.

Congress insisted on a stronger hand in controlling the money than the White House had wanted no fax payday loan. The government would take over huge amounts of devalued assets from beleaguered financial companies in hopes of unlocking frozen credit.

Oil prices were also pushed down by a stronger dollar. Investors often buy crude futures as a hedge against a weakening dollar and inflation, and sell when the dollar strengthens.

While dollar gained as details of the bailout package become known, analysts said the euro was weaker also because of growing economic problems in Europe.

"It is also a question of the euro losing ground due to a continued deterioration in the euro zone," said Olivier Jakob of Petromatrix in Switzerland. "With the rate of bank failures increasing in Europe and the economy slowing more rapidly than expected, pressure will continue to mount on the [European Central Bank] to lower [interest] rates."

Foreign exchange rates

The 15-nation euro fell Monday to $1.4437 from $1.4614 on Friday.

In other Nymex trading, heating oil futures fell 14.51 cents to $2.8732 a gallon, while gasoline futures dropped 15.57 to $2.5094 a gallon. Natural gas futures lost 40.7 cents to $7.221 per 1,000 cubic feet.

In London, November Brent crude fell $5.73 to $97.81 a barrel on the ICE Futures exchange. 

Source

Group of Seven nations welcomed the $700 billion U.S. markets bailout plan on Monday and said they were prepared to step up international cooperation to protect the world’s financial and banking system.

But a day after Treasury Secretary Henry Paulson said he was “aggressively” encouraging other countries to put in place bailout packages of their own, there was little sign other G7 governments were prepared to follow Washington’s lead.

“We pledge to enhance international cooperation to address the ongoing challenges in the global economy and world markets and maintain heightened close cooperation between finance ministries, central banks and regulators,” the G7 ministers said in a statement following a conference call on Monday lasting 15-20 minutes.

“We are ready to take whatever actions may be necessary, individually and collectively, to ensure the stability of the international financial system,” they said.

The statement, a few weeks before G7 finance ministers and central bank governors meet in Washington on October 10, follows a tumultuous week that started with the demise of Lehman Brothers and ended with one of the biggest financial rescues in history.

The conference call at 7:30 a.m paydayloans. EDT, which was convened on Sunday, followed intense telephoning between senior officials over recent days and a preparatory call by deputies to the ministers and central bank governors, a G7 source told Reuters.

The statement said ministers welcomed the “extraordinary actions” taken by Washington to remove illiquid assets that have contaminated banks’ balance sheets and fuelled a financial crisis widely seen as the worst since the 1930s.

LITTLE APPETITE 

Read more

Bankers and economists reacted with caution Friday to the broad outline of a government plan to take on troubled loans and other "bad" assets from banks in an attempt to unclog the nation’s financial system.

With most of the details yet to be worked out, bankers and others had more questions than criticisms of the plan. Treasury Secretary Henry M. Paulson, Federal Reserve Chairman Ben Bernanke and congressional leaders are expected to work out the details this weekend.

Left unclear were the answers to four key questions:

— What assets will the government accept, and what entity will accept them?

— Who will set the price for the assets?

— Will the government hold the assets for the long term, or will it sell them back into the market once the economy improves?

— Will the government accept assets from all banks, only large banks, or only the banks that are in trouble?

"I think action is certainly required," said Terrance McCarthy, chief executive of First Banks Inc. of Creve Coeur. But he was not sure taking bad loans off bank balance sheets would restore healthy sales of houses or free up the mortgage market.

Steve Marsh, president of Enterprise Bank & Trust in Clayton, said, "My initial reaction is that I’m glad to hear that there are serious proposals being considered because it’s clear that we’re facing unusual risk today."

Marsh said he was concerned about the burden the bailout could place on taxpayers. He said he hoped it would not benefit only the biggest banks. Marsh also expressed skepticism that a solution could be approved by Congress with elections less than seven weeks away.

 Radical rescue: Hundreds of billions for bailout

 Local bankers say Paulson had to act on “bad” assets

 NICKLAUS: In the short term, we are all going to be socialists

 NEWSWATCH: How much is TOO MUCH?

 NEWSWATCH: Will bailout help housing market?

 Wall Street ends wild week with biggest two-day rally in 38 years

 Area financial advisers survive storm

 STROUD: Market turbulence can test your level of risk tolerance

 Missouri regulators reassure AIG policyholders

 Credit market remains tight, but avoids collapse

Tom Chulick, chairman and chief executive of UMB Bank in St fast cash. Louis, said Paulson’s proposal calmed the market, but he wondered if the government can come up with an orderly means for assets to flow to and from whatever trust or institution the government designates.

"We think it’s going to be a net plus," Chulick said.

Todd Solomon, president of Pinnacle Financial Services Inc. in Chesterfield, said the plan could make it easier to get mortgages approved. Banks have been adding conditions on mortgages that can make it nearly impossible to close a deal. For example, he said, one lender asked that the borrower name it as a beneficiary of a life insurance policy.

Radhakrishnan Gopalan, an assistant finance professor at Washington University, said banks will have to take losses on the bad loans, even if they do sell them to the government. The loans now are difficult to value; removing them from the banks’ books could make bank financial statements more transparent and restore trust in the market, he said.

Anne Villamil, an economics professor at the University of Illinois at Urbana-Champaign, said she was concerned about how the losses from the financial institutions would be allocated among taxpayers and the private sector.

"I take (Paulson) at his word that this is designed to fix the fundamental problem," she said. At the very least, it will break the vicious cycle some institutions found themselves in of having their capital erode, being forced to raise more capital and then be downgraded because they had too much debt.

J. Fred Giertz, also an economist at Illinois, said he believed action was needed to "keep the financial system from exploding" and sending the economy into a long and severe recession or even a depression.

Although it may seem unfair that big banks and investment firms have gotten the most help from the government so far, the government had to do something to stop what could have been a deep downward spiral, Giertz said.

"It is a temporary fix, but if it’s done correctly and followed through on, it could be a step to a more stable situation," he said.

jerristroud@post-dispatch.com | 314-340-8384

Source

At 10 p.m. on a Friday last month, it was the usual Mardi Gras at Lumi

British bank Barclays is in talks with Lehman Brothers to buy its core U.S. broker-dealer business, including equity, fixed income, M&A advisory and other parts, people familiar with the matter said.

A deal could save thousands of jobs and many of Lehman’s core investment bank operations, a day after the U.S. bank’s holding company filed for bankruptcy protection.

Barclays said on Tuesday it was in talks to buy some of Lehman’s assets on terms that would need to be attractive to its shareholders. It declined to comment further.

The talks mainly involve the core U.S. business, which has 8,000 to 10,000 staff, but could include some of its global businesses, the sources said.

It does not include Lehman’s asset management and wealth management arms.

The sources said there is an urgency to the talks as a deal would need to be struck before staff and clients leave and damage the franchise.

A deal would include staff, infrastructure, licenses and some of Lehman’s financial positions, but would not leave the UK bank exposed to Lehman’s troubled assets, the sources said.

Barclays was involved in frantic talks over the weekend to rescue Lehman, but quit after U.S credit reports. authorities would not guarantee the U.S. investment bank’s trading obligations. 

Read more

Hundreds of union members and their families milled around Kiener Plaza in downtown St. Louis last month under a blazing blue Saturday sky. Some clutched placards — "InBev — Don’t forget who makes this Bud!" At exactly 1 p.m., drivers of parked tractor-trailers leaned on their horns. A blaring crescendo signaled the Teamsters were in town, ready to roll.

It remains to be seen whether the International Brotherhood of Teamsters will be so rowdy in an upcoming round of national contract negotiations with St. Louis-based Anheuser-Busch Cos.

Events are moving fast and furious: InBev of Belgium expects to finalize a $52 billion takeover of Anheuser-Busch — the biggest buyout in the history of beer — by the end of the year. A five-year contract between the Teamsters and Anheuser-Busch is set to expire Feb. 28; negotiators will go behind closed doors the week of Sept. 29 try to draw up a new contract.

For now, signs point tentatively toward a peaceful, swift and smooth labor negotiation.

"The Teamsters don’t want the uncertainty" from a long or strident standoff, said Gary Chaison, professor of industrial relations at Clark University. "InBev doesn’t want the uncertainty, and Anheuser-Busch knows it’s more valuable without uncertainty."

The Teamsters, one of the country’s biggest unions, faces an odd dynamic as InBev comes to town. The incoming owner of Anheuser-Busch is known for a tough approach toward unions in Belgium, Canada and Brazil. No one knows exactly how InBev will behave toward the Teamsters, which represent about 8,000 Anheuser-Busch employees in the U.S. — about a quarter of the company’s overall work force.

"With Anheuser-Busch, I knew where I stood to a certain degree," said Ray Wilkinson of House Springs, a fourth-generation brewery worker. "I’m concerned for my family. … Right now, I don’t know where I stand."

InBev has tried to assuage concerns about its planned acquisition. The giant Belgian brewer says it will keep all 12 of Anheuser-Busch’s U.S. breweries open, and says it expects the takeover of A-B to have little or no impact on union jobs.

But the Teamsters remain skeptical, arguing that InBev will be under pressure to make good on $45 billion of debt it shouldered to finance the purchase of Anheuser-Busch. The Teamsters wanted to know how that amount of debt — and the need to cut costs — squared with InBev’s assurances. The highly leveraged nature of the transaction raises "major credibility issues," the Teamsters said earlier this summer.

For their part, InBev and Anheuser-Busch have said the combined company will trim $1.5 billion in costs by 2011 — but mostly through economics of scale, overlapping corporate functions and cuts in the salaried, nonunion work force.

Meanwhile, the Teamsters union says its top priorities in the negotiations with Anheuser-Busch are protecting jobs, pension benefits and health care — demands that reflect the fact that many brewery workers’ dads and grandfathers also worked at Anheuser-Busch.

OPPORTUNITY

Relations between A-B and the union haven’t always been tranquil.

Ten years ago, contract negotiations between the Teamsters and Anheuser-Busch temporarily ground to a halt as things turned nasty. The union twice voted down a proposed contract before a deal was struck, narrowly avoiding a strike.

But by December 2003, the chill had thawed. Anheuser-Busch wrapped up quick negotiations with the Teamsters and emerged with a contract that has helped smooth labor relations.

By ratifying early, about 7,500 Anheuser-Busch employees covered by the contract got early wage and benefit increases and a $1,000 ratification bonus. Anheuser-Busch committed to keep all 12 U.S. breweries open during the term of the agreement and provided wage raises in all five years as well as bigger pensions.

Will the contract negotiations be swift, smooth and painless this time around? A few factors say yes.

First, rather than salivating over the opportunity to squeeze the union, InBev may want to stay in the background. If Anheuser-Busch hammers out a new union contract quickly, the Belgian company would get valuable, precise information about the labor issues and financial costs it is inheriting at America’s biggest brewer.

At the same time, the Teamsters want to demonstrate they are pragmatic employees that InBev can live with. A constructive approach to negotiations would go a long way in that direction.

"Make no mistake — we’re committed to the success of Anheuser-Busch and InBev," said Jack Cipriani, director of the Teamsters brewery and soft drink conference.

The Teamsters could benefit from negotiating with Anheuser-Busch — with whom it has had a stable relationship in recent years — rather than with InBev no fax payday advances. Lurking in the background is the possibility that, if the union drags its feet and throws up roadblocks to a new contract, InBev could close its buyout of Anheuser-Busch, swoop in and start to throw its weight around.

The next three to four months are "the window of opportunity," Paul Garver, brewery worker coordinator for the International Union of Food Workers, said at the Aug. 16 rally in downtown St. Louis. "Once this merger goes through, the promises that have been made through the media will be meaningless," said Garver, whose group is an international federation of trade unions.

If the new contract is in place before InBev takes control of the biggest U.S. brewer, InBev has to live with it. But if InBev takes over while the Teamsters and Anheuser-Busch are still negotiating, previous progress could conceivably come to naught. InBev would have the opportunity to bargain hard, and could take a very different stance toward the union than did Anheuser-Busch. If the company — or the union, for that matter — dug in its heels over unresolved issues, talks could break down.

Several observers said InBev would likely not want to rock the boat by stirring up labor trouble, even if it did have to mop up the union negotiations.

Despite the arguments for urgency, the Teamsters want to flex their muscles and demonstrate the ability to secure a solid contract. The Teamsters "can’t sell out to Anheuser-Busch just to get a deal," said Neil Martin, a Houston labor lawyer with the law firm Gardere Wynne Sewell. "They’ve got to live with the deal."

The Teamsters would put themselves at a disadvantage in negotiations by appearing too eager to get a new contract with Anheuser-Busch. Chaison said the Teamster’s current message to Anheuser-Busch is, "’We’d like to get a quick agreement with you, but it’s not the end of our world if we don’t.’"

Things are going smoothly this time in preliminary talks. Anheuser-Busch and the Teamsters recently wrapped up a few days of "professional and productive" negotiating sessions in Cincinnati, focused on local issues such as work rules at each brewery.

The upcoming national negotiations over issues such as wages and health care promise to be more difficult. Still, some Teamsters and labor analysts expect this round of contract negotiations to be uneventful, given the encouraging start. "We’re going to get a contact," said Dan McKay, president of the Teamsters Joint Council 13. "We’re going to get a good contract."

NEW REALITY

Where will the future balance of power lie between the Teamsters and Anheuser-Busch InBev? Like many unions, the Teamsters have suffered from the slippage of union membership in the U.S. The days may be gone when hard-muscled labor strife made the union feared. But the Teamsters union still has some kick and a well-earned reputation for shrewd and pragmatic negotiations.

The labor movement in general has "really taken it on the chin over the last couple of decades, but the Teamsters are better situated than a lot of manufacturing unions," said Roland Zullo, assistant research scientist at the University of Michigan’s Institute of Labor and Industrial Relations. Why? A concerted effort to diversify the union’s membership beyond truck drivers, said Zullo.

The Teamsters have lost some of their pull in the national labor movement and in state and local politics, but they "still carry clout among the workers at Anheuser-Busch, and they will still have something to say," said Henry W. Berger, emeritus professor of history at Washington University.

Now, the Teamsters are trying to rebalance the scales of power between unions and a brewing powerhouse — Anheuser-Busch InBev — that will supply one-fourth of the world’s beer. The Teamsters and other unions are trying to forge a new international partnership of unions that represent workers at InBev’s breweries in Brazil, Canada, Europe and — when the A-B takeover closes — the United States.

The rise of global entities like Anheuser-Busch InBev means "we must all adapt to new circumstances," said Cipriani. "The Teamsters in St. Louis are adapting to a new international reality."

jmcwilliams@post-dispatch.com

314-340-8372

Source

Thompson Coburn LLP on Tuesday gave St. Louis the verdict it wanted.

The law firm agreed to keep its 595 jobs downtown instead of moving to Clayton in return for about $700,000 in tax abatements and incentives from the city.

Thompson Coburn will even get its name on U.S. Bank tower.

For the city, the retention of the high-profile law firm is a reaffirming win in a year where it suffered the loss of 850 jobs with the closing of Macy’s division headquarters and was jilted by Centene Corp.

The decision to stay downtown was a tough one for Thompson Coburn because it received a number of very competitive proposals over the last two years, Thompson Coburn chairman Tom Minogue said at a news conference. One of the locations the firm had considered was Brown Shoe Co.’s planned mixed-use development at 8300 Maryland Avenue in Clayton.

"We are confident that we made the right choice for us," he said. "We wanted to be where all our people wanted to be."

Although the city was successful in convincing Thompson Coburn to stay downtown, Armstrong Teasdale LLP, currently located at One Metropolitan Square, 211 North Broadway, is considering moving to Centene Corp’s planned headquarters building in Clayton.

A.J. Chivetta, a partner involved in the firm’s relocation efforts, could not be reached for comment.

The city is still feeling the sting of losing Centene back to Clayton. The medical plan administration firm in September announced that it was going to move its headquarters to downtown as part of the Ballpark Village development. But in July, the company pulled out of the deal after it, the city and the developers could not hammer out an agreement.

Clayton offered up to $22 million in tax incentives over 20 years to lure Centene back.

Thompson Coburn employs more lawyers than any other firm in St. Louis and generates $1.2 million a year in taxes for city services, Mayor Francis Slay said.

City officials have been aggressive in their attempts to keep jobs from leaving downtown — especially high-paying ones such as lawyers, who add to the city coffers by way of the 1 percent wage tax.

Keeping a firm of Thompson Coburn’s size downtown "is good for the city’s image and for our economy and our business," Slay said payday loans.

Thompson Coburn agreed to sign a 12-year lease at the U.S. Bank tower, located at Seventh Street and Washington Avenue. The firm will remodel its existing 240,000 square feet.

The $700,000 in incentives include abatements of personal property, construction material sales taxes and about $400,000 in forgivable loans and training funds, said Barbara Geisman, the deputy mayor for development.

As part of the agreement, U.S. Bank will donate its current 360-space garage to the Missouri Development Finance Board. An additional garage, which will contain another 360 parking spaces plus a floor of retail space, will be built in the plaza space in back of the building. The Missouri Development Finance Board will run both garages. The estimated $15 million in construction costs will be financed by revenue from both garages, Geisman said.

"This was a substantial gain for the city of St. Louis in the long run," said Robert Lewis, president of Economic Strategies, a St. Louis real estate and economic development consulting firm. By keeping Thompson Coburn with its large number of employees and high wages, the city can make up its costs within about two years, he estimated.

"It (the deal) helps a big firm with ample prestige located in a very important building stay in the city without hurting the city’s budget," he said."

"It’s not a huge amount of money," agreed Don Phares, professor emeritus of economics and public policy at the University of Missouri-St. Louis.

More importantly, he said, is the city’s image.

"If they (Thompson Coburn) left, it would indicate that downtown St. Louis is no longer the place to do business," Phares said explaining such a decision could influence other firms to leave. "Keeping them there may be a sign to other firms that being in the city is a desirable place to be."

gappleson@post-dispatch.com | 314-340-8331

Source