Good morning, MBA readers,
What’s the value of that “organic” label on the food in your local supermarket? It has grown leaps and bounds over the last decade. Sales of organic foods in the U.S. were almost $48 billion in 2018, according to the Organic Trade Association, more than double the total of about $21 billion in 2009. But increasing consumer appetite for organic foods coupled with inadequate systems for verifying food as organic has led to the potential for exploitation. One Missouri farmer took advantage in spectacular fashion, orchestrating one of the biggest fraud cases in agriculture history, as a new report from The Kansas City Star details. While the case of Chillicothe farmer Randy Constant was ultimately discovered and prosecuted, the growth of the organic market could continue to incentivize illegal activity — and will challenge regulators and enforcement officials to keep up. Read on for more about that story, as well as other top business news from around the state.
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Missouri looks to hang up on robocalls
Lawmakers are introducing legislation to fight the spread of telemarketing fraud. A bill sponsored by Rep. Steve Helms, R-Springfield would go after “call spoofing,” a practice used by telemarketers and fraudsters to give the appearance they are calling from local phone numbers. (St. Louis Post-Dispatch)
Boeing to borrow $10 billion or more
The aerospace company that spent much of 2019 embroiled in scandal after two crashes of 737 Max jetliners is asking banks for $10 billion or more amid rising costs, sources told Reuters. Federal regulators are not expected to approve the plane’s return until March at the earliest. (Reuters)
Columbia City Council to take up new Airbnb rules
A public hearing is scheduled Tuesday to address potential zoning regulations for short-term rentals like those marketed by Airbnb. Some residents have expressed concern that a lack of zoning for Airbnb accommodations will ruin neighborhood dynamics and decrease investment in Columbia properties. (Columbia Missourian)
Parson dismisses Galloway’s criticism about delayed tax returns
Missouri Auditor Nicole Galloway, who is vying to unseat Gov. Mike Parson in November, blamed Parson’s administration for the fact that thousands of Missourians are still waiting for their 2018 tax returns. Parson said most taxpayers still awaiting returns either filed for extensions or have tax issues, and he said Galloway is trying to score political points. (Missourinet)
Recently shuttered Boonville hospital struggled for a year
The abrupt closure of Pinnacle Regional Hospital in Boonville isn’t the black swan it initially appeared to be, lawyers representing its employees say. Over the past year, the hospital has been sued by vendors, the Missouri Division of Employment Security and by its own employees, all for issues involving nonpayment. (KCUR)
Manufacturer leads new warehouse development in Fenton
Fenton-based GAT Finishing Systems will begin construction of a 30,000-square-foot facility in February. CEO Dan Guirl said the company, which designs and fabricates finishing systems, is in discussion with potential tenants about leasing the space, but that GAT could also use the facility for future expansion. (St. Louis Business Journal)
St. Louis County set to select engineer for $5 million rec center overhaul
The county’s lawmakers could pick an engineer and architect for renovations to the Greensfelder Recreation Complex on Tuesday. The county Parks and Recreation department’s acting head is recommending Brentwood-based Chiodini Architects. (St. Louis Business Journal)
Say that again
“Somebody who was competing with him in the organic market noticed that he was flooding the market with too much grain and at too low of a price for what organic grain should be sold for.”
That’s federal prosecutor Anthony Morfitt describing how federal authorities realized Missouri farmer Randy Constant was running one of the largest frauds in farm history, The Kansas City Star reports. Constant was a prominent figure in the organic food business and the Missouri town of Chillicothe. He became successful trading organic grain and sold farm-grown tilapia by the ton to hundreds of grocers, including Whole Foods. Records show Constant sold 7% of all the corn labeled organic and 8% of all organic soybeans in 2016, worth more than $19 million that year. Authorities say Constant took advantage of the lax federal monitoring process for supposedly “organic” grains and sold conventionally grown grain for much more with the organic label. Between 2010 and 2017, Constant made roughly $140 million in fraudulent grain sales, the feds estimate.
That’s the number of guests who visited Silver Dollar City in 2019, breaking the previous annual record of 2.18 million guests in 2018, the Springfield Business Journal reports. The new record was announced Monday as the Branson theme park enters its 60th year. Park officials attribute the growth to over $100 million in capital investments made to the park. Most recently, Silver Dollar City spent more than $30 million on a new area called Rivertown, which is anchored by the $23 million Mystic River Falls slated to replace the Lost River of the Ozarks this summer.
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Just a year after closing its first real estate fund, the St. Louis firm is looking to raise a second fund, the St. Louis Business Journal reports. At the helm of PPAF are Michael Gingrich, fund manager, and Derrick Frost, investment adviser representative and a former NFL punter. The duo previously raised $10 million in January 2019 and has completed 10 deals across the country, several of which took place in Frost’s hometown of St. Louis. One such deal was the $8.3 million acquisition and renovation of a 70-unit apartment complex in the DeBaliviere Place neighborhood. Now, Gingrich and Frost are looking to raise more money with an open-ended structure, keeping the fund open while deploying capital. The second fund will target similar assets and add value to properties, Gingrich said.
It’s been a pleasure doing business with you this morning.