St. Louis comptroller calls for ‘do-over’ of grant program

ST. LOUIS — Comptroller Darlene Green on Wednesday said the city’s development arm should pause and reboot a $37 million grant program for north St. Louis businesses and nonprofits, saying a flawed rollout of the program could put the city at risk of lawsuits and the loss of future federal funds.

The recommendations came in the form of a “preliminary risk assessment” performed by the comptroller’s audit division, which reviewed relevant regulations and news reports and reached out to some grant applicants. In it, Green and an auditor raised concerns that most of the money is set to be awarded to a handful of entities, that established businesses are being passed over while brand-new businesses are in line for money, and that some of the money may be on its way to people who shouldn’t have it at all.

“An immediate do-over is in the best interest of the city and its taxpayers,” the report says. “The current status of the program has placed the city in a vulnerable situation.”

The call for a reset is the latest twist for a program that’s supposed to be a big win for the city, a first step toward reversing years of disinvestment and neglect on the city’s north side. Mayor Tishaura O. Jones and other officials have talked about the cash as a way to restore vibrancy to forgotten corridors and offer opportunities to people left out for decades.

But in recent weeks, Post-Dispatch reporting has raised questions about the way the St. Louis Development Corp. plans to dole out the money. One announced winner, in line for $50,000, has its offices in Shrewsbury. Two are based in vacant buildings. And three awards, worth nearly $1.3 million, are intended for entities with ties to the family of Alderwoman Shameem Clark Hubbard, who sponsored the grants bill and sits on the board of SLDC.

In each case, SLDC emphasized that the vast majority of grant awards are not final. Staffers and contractors, they said, were still conducting “viability assessments” to ensure everyone in line for money was legitimate, and any appearance of impropriety would be investigated. But for weeks, they refused to release grant applications that could shed more light on questionable applicants’ plans for the money.

Business owners passed over for funding started protesting outside City Hall and at SLDC events, complaining that some of the biggest grants are headed for well-financed institutions like the Urban League of Metropolitan St. Louis and the Boys & Girls Club. And Green, who is up for reelection in April, has begun publicly questioning the program’s administration.

Last month, she made a rare appearance at the Board of Aldermen to criticize the program, prompting Jones to make her own extraordinary trip to the board for a public rebuttal. And on Wednesday, at a meeting of the city’s top fiscal body with Jones, Green announced the report and urged SLDC to take heed of its recommendations.

Jones acknowledged the report’s concerns but rejected its conclusions.

“It is our intent to be aboveboard,” she told Green at the meeting, “but what we’re not going to do is start this program over.”

In a written statement, SLDC chief Neal Richardson blasted the report, saying it was “riddled with errors and false allegations.”

Richardson and the mayor’s office said they planned to meet with the comptroller soon to clear up her concerns. And Conner Kerrigan, a spokesperson for Jones, noted SLDC recently released a ream of documents from the program, including redacted grant applications and vetting protocols, late last week. Green didn’t take any of the newly released information in SLDC’s “transparency portal” into account, Kerrigan said.

But Green was unimpressed by the portal, which excised key parts of dozens of grant applications and did not fully describe winners’ plans for the money.

And she emphasized that she’d spoken with a number of North Side business owners who have been mistreated and said the city needs to do right by them. Her office said one way to fix that would be for the city to require all grant winners to have been operating since at least January 2018, and then ensure they’ve paid their taxes.

“It’s not illegal to overlook hardworking people,” Green said in an interview, “but it is wrong.”

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