St. Louis China hub effort called 'alive and well'

ST. LOUIS (AP) -- Leaders of an effort to make St. Louis a hub for international trade with China said Tuesday that the project is going ahead despite setbacks and competition from across the Mississippi River.

St. Louis civic leaders formed the Midwest-China Hub Commission more than four years ago with a goal of making St. Louis a focal point for trade with China, in part by developing warehouses near Lambert Airport.

The project took a big hit in the fall when Missouri lawmakers failed to pass a tax incentive plan. Earlier this week, hub commission chairman Mike Jones told KMOX Radio that the project was essentially a missed opportunity because of the failure to secure the tax breaks. But hub officials said Jones' comments were out of frustration with the legislature.

"The international cargo project at Lambert is very much alive and well," said Dan Mehan, vice chairman of the commission. "It has hit some serious bumps in the road over the past year, but we are working hard to make it a success. We see this as a new life for Lambert and an economic shot in the arm for the St. Louis region and the entire state of Missouri."

Or Illinois. Just across the river, the St. Clair County Board on Monday approved the potential issuance of $550 million in conduit bonds for a project that would turn little-used MidAmerica St. Louis Airport in Mascoutah, Ill., into a site for international cargo flights. Board chairman Mark Kern said the project is not limited to China.

"A China hub is not what MidAmerica is doing," he said. "We're developing trade routes that center on MidAmerica Airport."

The agreement carries little risk for the county. Conduit bonds are issued by governments for nongovernment entities. It allows the borrower access to lower rates, but it would be up to Strategic Air Cargo Inc., of Chesterfield, Mo., the firm that wants to develop the project in Illinois, to sell the bonds.

The project could provide a much-needed boost for MidAmerica, an airport that hasn't turned a profit since it opened with great fanfare in 1998. MidAmerica's financial struggles have raised nagging questions about its usefulness, and critics persistently have labeled it a $330 million boondoggle.

China is Missouri's third-largest trading partner. The St. Louis County Economic Council said Missouri exports to China reached a record $1.2 billion in 2011, up from about $1 billion in 2010.

A key part of the St. Louis project called for development of tax incentives for new warehouses near Lambert. Last summer, Missouri lawmakers tentatively agreed on a $360 million package of tax credits. But a slimmed-down plan failed in a special session in the fall because of a stalemate between the House and Senate.

Soon thereafter, China Cargo Airlines started canceling scheduled air cargo flights to Lambert.

Mehan said he and others share in the frustration over lawmakers' inability to approve a tax incentive package.

"I think there's no doubt flights would be landing weekly at Lambert at this point if not for what happened in Jefferson City this past fall," Mehan said.

Kathryn Jamboretz, a spokeswoman for the St. Louis County Economic Council, said the Missouri project is far from doomed.

"There's substantial work going on behind the scenes that should advance the mission of the cargo hub at the airport," Jamboretz said. "We expect it to happen in the next couple of weeks."