Good morning, MBA readers,
Traders return to Wall Street today following a week that brought the biggest hit to markets since 2008. That turbulence, stoked by the spread of the coronavirus, was enough that James Bullard, president of the Federal Reserve Bank of St. Louis, shifted his tone about the possibility of the Fed making rate cuts at its March meeting. Bullard said Friday that “further policy rate cuts are a possibility” if a global pandemic develops, but that a focus on public health is more important than the central bank’s decisions. Elsewhere, Evergy, the Kansas City-based utility, is expected to make board changes in the face of pressure from an activist investor, and St. Louis mining giant Arch Coal will get a new chief executive. Start your week with those stories and the rest of Missouri’s top business news.
Want Missouri’s top business news in your inbox? Subscribe here.
St. Louis clears MLS stadium incentives
The St. Louis Board of Aldermen voted 22-1 Friday to pass key legislation offering tax incentives to help fund the new Major League Soccer stadium planned downtown, which is expected to cost as much as $400 million. One bill authorizes $34.5 million in tax abatement over 25 years, and another allows a sales tax exemption for construction materials. (St. Louis Post-Dispatch)
DST Systems parent company plans KC layoffs
Connecticut-based SS&C Technologies Holdings, which bought Kansas City’s DST Systems in 2018, is laying off about 3% of its 22,000 global employees. Most of the cuts will affect the Kansas City unit, which has nearly 5,000 local full-time-equivalent workers, but the company declined to confirm how many Kansas City workers would be laid off. (Kansas City Business Journal)
Mallinckrodt plan would shield branded business, bankrupt generics unit
If approved, Mallinckrodt’s $1.6 billion opioid settlement would use a strategy called ring-fencing to protect its core branded drug business. The company’s generic business, based in the St. Louis area, would go through bankruptcy and devote most of its future profits to addressing the opioid crisis. (St. Louis Post-Dispatch)
MU restricts international programs amid coronavirus concerns
The University of Missouri has barred all new university-sponsored travel to Italy and South Korea amid concerns over the coronavirus epidemic. The school has canceled spring and summer study-abroad programs in Italy and will work with 23 students currently there so they continue their studies. (Columbia Missourian)
Missouri lawmakers mulling guidelines for robot deliveries
A bill sponsored by state Rep. Travis Fitzwater, R-Holts Summit, would set guidelines for the use of autonomous delivery devices in Missouri. For example, the bill would limit robots’ weight to 200 pounds and require delivery vehicles to operate on sidewalks and roads without disrupting traffic. (St. Louis Post-Dispatch)
Feds to fine T-Mobile, Sprint $103 million over consumer data complaint
The Federal Communications Commission has voted to propose fining T-Mobile more than $91 million and Sprint $12 million for failing to protect consumer location data. AT&T and Verizon would also be fined $57 million and $48 million, respectively. T-Mobile said it would dispute the fine. (Reuters)
Evergy, Elliott reportedly near settlement on new board members
Kansas City utility Evergy is expected to announce a settlement with Elliott Management Monday, giving the activist investor two new seats on its board, sources tell Bloomberg. The agreement would also create a special committee to find ways to improve shareholder returns. (Bloomberg)
Arch Coal CEO to retire
John Eaves, who has led Arch Coal since 2012, plans to retire in April at the St. Louis-based mining firm’s annual meeting, the company said Friday. Paul Lang, Arch Coal’s president and COO, will succeed Eaves as CEO and join the company’s board. Eaves will take on the role of executive chairman. (St. Louis Business Journal)
Troubled St. Louis hospital may shed properties amid bankruptcy
Officials at St. Alexius Hospital are considering selling two nearby facilities in a bid to pay down debts related to the hospital’s ongoing Chapter 11 bankruptcy, sources tell the St. Louis Business Journal. The sale would not include the hospital’s main campus and likely not include the adjacent Lutheran School of Nursing property. (St. Louis Business Journal)
KC ad agency names new chief creative
Barkley has promoted Katy Hornaday, executive vice president and executive creative director at the advertising agency, to the role of chief creative officer. Hornaday joined the firm in 2012. (AdWeek)
Say that again
“In my view, further policy rate cuts are a possibility if a global pandemic actually develops with health effects approaching the scale of ordinary influenza, but this is not the baseline case at this time.”
That’s St. Louis Federal Reserve Bank President James Bullard, who in a speech Friday in Fort Smith, Arkansas, marked a stark shift from his earlier stance on further cutting interest rates in response to the coronavirus epidemic, the St. Louis Business Journal reports. Bullard argued that the Fed is in a good position if continued spread of the coronavirus precipitates the need for additional rate cuts, given that the board cut rates three times in 2019. He added that while the economic risk remains minimal for now, investors and policymakers should consider the possibility of what he calls a “global pandemic,” remarking that the current trajectory of the coronavirus is atypical of previous viral outbreaks. Bullard’s comments came at the end of the worst week on Wall Street since 2008. The White House on Saturday warned Americans not to travel to Italy and South Korea and banned travel to and from Iran, where the number of confirmed infected patients recently surged. Dow futures dropped 500 points before rebounding ahead of Monday’s opening bell, with traders bracing for another volatile week.
That’s how many appeals Missouri has received as of Friday from companies that were denied state commercial permits to deal with medical marijuana, the Associated Press reports. Many of the appeals allege flaws and inconsistencies in Missouri’s scoring system, which the state outsourced to Nevada-based Wise Health Solutions for an estimated $582,000. Some rejected applicants have said the company assigned different scores for identical answers on applications. The state received 2,266 applications for medical marijuana businesses and issued 338 licenses. State lawmakers have begun investigating the program and plan to hold additional hearings this spring.
Here are my proposed changes to the @KCMO FY 2020-21 budget. I’m confident these changes advance our shared goal of adopting the most equitable budget in KC history while maintaining our proposed balanced budget. -MayorQ@KansasCityFilm@ChildrensMercy@HireKCYouth@KCSourceLink pic.twitter.com/TdKpUwQNaP
— Mayor Quinton Lucas (@MayorLucasKC) February 28, 2020
That’s Kansas City Mayor Quinton Lucas responding to criticism from the small business community over proposed cuts to entrepreneur support programs. On Friday, Lucas tweeted a list of revisions to the proposed budget for the next fiscal year, including a $25,000 transfer to KCSourceLink from KC BizCare, which helps new entrepreneurs with the process of starting a business. Both organizations have been part of an informal coalition protesting planned cuts to funding for KCSourceLink, Startland News reports. Lucas’ initial $1.7 billion plan slashed funding for entrepreneurship groups like these by 55%.
Hello, my name is
The University of Missouri has hired this former chair of neurology at the University of Kansas as its new executive vice chancellor for health affairs, the Columbia Missourian reports. Barohn, who spent 16 years in his previous post, will start at MU on July 1 with an annual salary of $780,000. Barohn will oversee MU Health Care and the MU School of Medicine, seeking to strengthen their intersecting missions. The position has been filled on an interim basis by several people since Hal Williamson left it in February 2016. Barohn, who researched neuromuscular disorders, was selected following a nationwide search.
It’s been a pleasure doing business with you this morning.