ST. LOUIS — The coronavirus pandemic has devastated businesses and nonprofits, but some are getting help thanks to an extraordinary infusion of federal tax dollars making their way through local governments.
Because of rules set by Congress, this COVID cash — which totals $255 million in St. Louis County, St. Charles County and the city of St. Louis — must be spent on virus relief, not filling budget gaps created by a loss of sales tax and other revenue.
So governments have turned to hundreds of local vendors to provide various services, from housing and construction to testing and supplying personal protective equipment. Unlike Paycheck Protection Program funds, also part of the CARES Act, or the Fed’s Main Street Lending Program, the $150 billion in local government relief does not carry the threat of repayment. More local aid could come in a subsequent stimulus law, though, in one change, that money may be OK’d to plug revenue shortfalls.
“It’s pretty unprecedented,” Max Gillman, professor of economic history at the University of Missouri - St. Louis, said of the infusion to businesses for services.
Only during world wars or the Great Depression did federal spending reach localities — and the businesses located there — at the same scale, Gillman said.
Still, much spending remains. For example, St. Louis County, despite earmarking nearly all its $173 million in funding to broad categories, has spent just $31.6 million as of Aug. 18, with $30 million in checks “in process.” In the city, the number is $15 million expended or committed as of Aug. 14 out of $35.3 million total. St. Charles County as of the end of July had spent $5.5 million of $47.2 million.
A spokesman for St. Louis County Executive Sam Page said the funds can only be spent on expenses incurred from March 1 through the end of the year. Some checks may not go out until early 2021, “but we are well on our way to having the resources out into the community by the end of the year,” said the spokesman, Doug Moore.
The following pages offer a look at some of the local businesses getting the benefit of the COVID cash.
Printer sees opportunity in a different product category
Early in the year, leadership at RBO PrintLogistix pivoted.
The Maryland Heights company is a printer and supplier of promotional materials. But CEO Jim Riley said as the pandemic gained steam, he saw an opportunity to do something completely different.
The company, he said, had a supplier that indicated it could obtain masks, gowns and other personal protective equipment, seen as a critical tool in fighting spread of the virus.
“We could get it at fairly competitive prices, and it was somebody we trusted and had dealt with for some time,” Riley said.
RBO started supplying the PPE to existing clients, such as hospitals, schools and universities, he said, as institutions were “desperate” for the material.
It took a call to land a large contract with St. Louis County.
Riley said he contacted its emergency management group, submitted bids and, records show, won nearly $1.8 million, mostly for masks.
The foray into PPE is temporary, though. “The big spike in it is starting to tail off,” Riley said.
Margins on the material are also thin, he added.
Riley said RBO, with 65 employees, sells some 6,000 items on its website. Those include banners, trade show graphics and even branded practice holes for golf putting.
HAWTHORN SUITES BY WYNDHAM
A fully booked hotel, with travel halted?
Hotels across St. Louis stood empty beginning in March. Many closed outright. And some forecasts say they won’t recover to pre-pandemic revenue totals for years.
But at one hotel, Hawthorn Suites by Wyndham St. Louis, at 1881 Craigshire Road, all 111 rooms are being paid for by St. Louis County, so far at a cost of more than $1.4 million.
The extended-stay complex is serving as a quarantine zone for first responders. Some Republican lawmakers have questioned the expenditure, saying it wasn’t bid and that lower-cost options were available, mirroring complaints about a county-built morgue that’s held few bodies.
Sara Dayley, a spokeswoman for the county’s Department of Public Health, said 102 people total have stayed in the hotel under the government’s contract, a “rolling number as each (person) that goes into the quarantine/isolation hotel is not there for an exact time.”
“Some are finishing out their quarantine based on exposures, others are waiting for test results and some are finishing out their isolation periods,” Dayley said.
The number of rooms the county is paying for will fall by more than half, to just 50, on Aug. 22, Dayley said.
The International Association of Firefighters said it requested the contract based on experiences in Seattle and King County, Washington, “where they saw up to 25% of their workforce in quarantine.”
Public records say the facility is owned by an entity tied to Hiten Kanubhai Patel’s Pasha Hospitality MH LLC. An attorney for the company didn’t respond to a request for comment.
Click here for the full story.