ST. LOUIS, Mo. (First Alert 4) – A new Missouri economic development law gives St. Louis developers and startup founders tools they say the region has lacked for years — but the path to full implementation runs on two separate timelines.
The law creates an angel tax credit program designed to direct more investment to Missouri-based startups, and establishes an innovation district framework that would allow qualifying downtown companies to recoup 3% of payroll for reinvestment. The angel credit program is available nearly immediately. The innovation district funding cannot move until the state Department of Economic Development finishes its rules and regulations — a process Mayor Cara Spencer’s office said may not be complete until the first quarter of 2027.
Angel tax credits: available now
The angel tax credit program is capped at $6 million in its first year, with the potential to increase by $1 million per year if targets are met.
Jesse Winters, who works with startups at T-REX, a nonprofit innovation hub and tech incubator in downtown St. Louis, said access to capital is central to whether early-stage companies survive.
“Those startups are dramatically impacted by the access to capital that they have,” Winters said.
State Rep. Travis Fitzwater said the program is designed to keep Missouri founders from having to look out of state for funding.
“The angel tax credit program is really a way for us to compete with the states around us that give incentives to those investors that invest in founders,” Fitzwater said.
T-REX-backed companies have generated approximately $1 billion in economic impact since 2011
Innovation district: waiting on city and state
Under the innovation district framework, qualifying companies could receive back 3% of their payroll — roughly $27,000 annually on a $900,000 payroll — money that must be reinvested into the business.
“That they then have to put right back into the growth of that company so that they can use that on hiring an additional engineer, purchasing new software, whatever that may be,” Winters said. “For a small growth stage company, that is incredibly impactful.”
But before any company can apply, the city must establish a Missouri Innovation Zone — and that requires the state to first finalize its rules.
“In order for us to apply for the office residential tax credit, the city needs to create the Missouri Innovation Zone, and it can’t do so until the Department of Economic Development has finished with their rules and regulations,” said developer Charles Goldman of The Goldman Group.
The city must also create a one-stop permitting shop at City Hall to qualify for state approval — a single point of contact that would route applications to fire, safety, building, zoning, and the Board of Aldermen simultaneously.
“They would apply through the one-stop shop, and the one-stop shop would communicate all of their information to fire, safety, building, zoning, board of aldermen,” Goldman said.
Spencer’s office said the city is still working to understand the state’s process to establish the downtown zone, and that the state scorecard needed to launch the district may not be ready until the first quarter of 2027.
Goldman said his firm is prepared to move when the framework is in place.
“We are eager — very eager — to move forward, and would like to move forward in 2027 with the idea of completing the project in several phases over the next several years,” Goldman said.
Downtown construction already underway
While the policy framework takes shape, physical reconstruction along the riverfront is already in progress. Demolition of the Millennium Hotel is underway, clearing the site for a $670 million development. The project is scheduled for completion by the end of 2027.
Ryan McClure, executive director of the Gateway Arch Park Foundation, said the visible construction is significant for public confidence in downtown’s trajectory.
“People see this every day, so they’re witnessing the demolition of the Millennium as it happens,” McClure said. “Cranes in the air are immediate symbols of progress. And you’re seeing cranes doing demolition right now, but then right after that, you’re gonna see cranes building into the air. And I think you’re gonna see more of that in downtown in the coming years.”
McClure said Missouri previously lacked financing tools — including MODESA — that other major markets have used to fund large-scale projects.
“We were missing those. We have them now. So it’s huge,” McClure said.
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