Will Ferguson Sour Businesses on St. Louis?

(St. Louis Post-Dispatch/MCT) -

Tear gas, looters, protest signs, cops in riot gear and angry demonstrators became the image of St. Louis over the past two weeks, as the troubles in Ferguson, Mo., led international newscasts and hit the world’s front pages.

Brian Williams hosted “NBC Nightly News” from the scene. The cover of Time Magazine showed a man kneeling with his hands up on a Ferguson street. The front page of The Wall Street Journal — the nation’s main business newspaper — was dominated by a picture of a Ferguson protester in a cloud of tear gas. CNN sent the violent video of racially tinged confrontation worldwide.

Now, as tempers cool, local business leaders are worried that the region may feel an economic backlash.

Will business leaders from elsewhere cut the St. Louis area from their list as they decide where to expand production? Will bankers think twice before making a big business loan here? Will people with smart ideas decide to launch their startup elsewhere?

“It has to be a black eye for the community, and you can’t damp it down overnight. People will remember it,” said Richard Ward, a longtime economic-development consultant in St. Louis. “This can have a tremendous long-term effect.”

So far, no business has nixed plans to expand here. No group has canceled a convention here. Hotels report normal bookings.

But people who make those decisions are asking a lot of questions.

“All of our world has changed over the past few days,” said Denny Coleman, CEO of the St. Louis Economic Development Partnership, the business-recruiting arm of St. Louis and St. Louis County. “Nobody has said, ‘Well, I’m not coming there.’ But it’s given prospects a reason to pause until they see where this leads.”

Other cities have erupted in protests and violence following police shootings — Cincinnati in 2001; Anaheim, Calif., in 2012; Albuquerque, N.M., this spring.

The economic consequences have varied. In Anaheim, several days of violent disorder had little long-term effect on jobs and business in the suburban home of Disneyland near Los Angeles. The downtown area smashed in the riot is now enjoying a “boom,” says a city spokesperson.

In Cincinnati, riots spilled into downtown and led to years of discord — including a damaging business boycott by minority groups, a police work slowdown and rising crime.

The 1992 Los Angeles riots, over the police beating of Rodney King, left 52 dead and 1,000 buildings in ruins — events much worse than in Ferguson. One study put the business cost at $3.8 billion in lost sales over the next 10 years.

 

NEXT TO EMERSON

To avoid such damage, the region’s economic salesmen are speaking soothing words to business prospects. They point out that nearly all the violence took place in a small part of a big metro area.

The prospects’ response is noncommittal. “Nobody has said no. It’s just that every client considering investment has raised questions,” said Joe Reagan, president of the Regional Chamber and Growth Association.

The center of unrest bordered the Ferguson-based headquarters of Emerson, a global manufacturer on the Fortune 500 list of major U.S. companies. But it is miles away from other major businesses.

That may limit the damage to St. Louis’s business reputation, Ward said. “This is not downtown. It is not something many people are going to see.”

But people elsewhere may not make the distinction between a small North County suburb and the rest of the region, said Steve Roberts, a St. Louis businessman who chairs the board of Logan University.

Roberts was in Washington last week, walking past the Newseum, which posts newspaper front pages from around the world.

“I couldn’t believe it,” he said. “Half the newspapers in the U.S. had pictures of Ferguson.” A third of the foreign newspapers also showed the unrest. “It was like the world saying to us, ‘What’s wrong with you?’ ”

 

RESPONDING QUICKLY

Despite this month’s battering, business leaders say St. Louis’s long-term image depends on how the region responds in the weeks ahead. If the world sees St. Louis trying to improve education and inclusion of minorities, the damage to the region will subside, they say.

“We have to reach out to groups that don’t feel included,” Coleman said. “Before we start a media campaign, we have to get at some of the roots of this.”

St. Louis businesses may have to pay for it. “Government does not have the resources to make a difference,” Roberts said. “The state is barely making its budget, the cities are struggling and there is no federal money coming down.”

The effort should give some hope to the young people who live in Ferguson and were out in the street, said Mike Roberts, Steve Roberts’s brother and business partner. Their only role models are “people with a ball in their hand (or) a microphone for (singing),” said Mike Roberts, who is black.

He wants major St. Louis companies to help form a group to offer such young people job training directly tied to jobs at those companies, or to give them skills to start their own businesses.

In the Ferguson area, businesses are wondering about the future of the neighborhood.

“We’ve yet to hear from anyone saying, ‘That’s it; we’re out of here,’ ” said Brian Goldman, president of the Northwest Chamber of Commerce, which represents Ferguson-area businesses. “It’s a holding pattern. People are waiting to see what happens. What happens when the verdict comes down?” he asked, referring to the decision on whether to prosecute the policeman who shot Michael Brown.

Former Ferguson Mayor Brian Fletcher wants to reverse the town’s image with 4,000 “I love Ferguson” yard signs, plus T-shirts. He and about 35 business and civic leaders formed an “I love Ferguson” committee. About half are black, Fletcher said.

“I have a line out the door of people wanting signs,” he said.

Mary Engelbreit, the St. Louis native who runs her namesake company known for sweet artworks and greeting cards, drew a poster to raise money for Ferguson. It shows a black mother and child looking at a newspaper headline saying “Hands up, don’t shoot.”

“No one should have to teach their children this in the USA,” says the poster.

Engelbreit drew it after watching the mother of Michael Brown on TV. “I lost a son 10 years ago, and I knew what she was feeling,” Engelbreit said.

She thinks the shock of the riots will bring people together to solve the problems of Ferguson. “I think it will have a good impact eventually,” she said.

But in the meantime, “we have to rebuild the image of St. Louis. We look terrible,” Engelbreit said.