Real Estate Development - Clayco - Solae Global Headquarters

Solae Global Headquarters

Project Description

Solae, Inc. is a spin-off of Ralston Purina.  Ralston Purina was purchased by Nestle.  Solae was on the Nestle campus with the corporate headquarters, lab space and had a remote pilot plant for new product. 

Solae needed to move and chose Clayco to do it.  Clayco did a site selection analysis and recommended Center of Research and Technology Excellence (CORTEX).  The site was chosen in the Cortex redevelopment area in the City of St. Louis and with it came many challenges. 

Even though site contamination was an issue, it was not large enough in scale to utilize Brownfield Tax Credits in an economical fashion.  Further, because of the single Tenant nature of the project, Clayco helped Solae focus on the best bottom line result from a real estate perspective.  Tax abatement for a period of 10 years was achieved through the use of Chapter 353 Redevelopment Program.  In addition, we negotiated with the City to allow Solae to relocate and maintain intact its Chapter 100 tax credit program for personal property, which under normal circumstances would have been recaptured because of the move.  In addition, early termination fees for other tax credit programs Solae had used five and six years previously needed to be waived as part of this new corporate headquarters, laboratory and power plant facility and we did get them waived.

In addition, because the location was in a qualified census tract, we competed with 12 other proposed City projects for the $30 million of New Markets Tax Credits (NMTC) the City of St. Louis had and were awarded $6 million of the City’s allocation.  In addition, we went out into the free market and found a second allocatee for another $6 million bringing a total of $12 million of NMTC’s to the table in a complicated layering of New Market allocatee’s to achieve the same result as a single allocation in the form of equity on the front end of the transaction. 

These programs were added to state and local tax credit programs, including Missouri Build and Missouri Quality Jobs.  Missouri Build was replaced by other programs.  While the tax abatement, recapture waivers and NMTC’s benefited Solae to the tune of over $23 million, the jobs benefits are based on job retention and new job creation and are a bit of a moving target in terms of its final value since it is a multiplier based on the actual new and retained jobs, salaries, and real withholdings for the employees and employers.  It is probably safe to say these benefits topped $5 million more.