ST. LOUIS – The Cortex Innovation Community, a $2 billion economic engine for the region, has achieved national prominence and ignited an urban renewal not seen in the city’s core in nearly a century.
But the district, now in its 20th year, is facing some of its biggest challenges yet, with millions of dollars in lost revenue, slowing development and pandemic-related uncertainty about whether tenants will return to Cortex, which houses dozens of offices and laboratories are.
Regional leaders say regaining momentum at Cortex is a top priority.
“This is too important,” said Jason Hall, CEO of the Greater St. Louis Inc. regional group of companies.
Cortex officials say they have a new five-year strategic plan that addresses those fears and provides a roadmap to attract dozens more companies in the region and build a pipeline of diverse talent. To this end, the district will narrow its focus on selected sectors, build “pandemic-proof” real estate and promote vocational training.
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“This is very much an evolution,” said Sam Fiorello, CEO of Cortex, “by taking the things we’ve done very well and looking at the realities of a changing world.”
The district was created in 2002 with an initial investment of $29 million from Washington University, St. Louis University, the University of Missouri-St. Louis, BJC Healthcare and Missouri Botanical Garden. The organizations joined forces on 200 acres of largely neglected commercial land in the Central West End, northwest of Interstate 64 and Vandeventer Avenue near Midtown.
Over the next 20 years, thousands of square feet of new office and laboratory space were added, a new MetroLink station was built, and more than 425 businesses employing 6,000 people were hired or created. His program has trained 346 new entrepreneurs, 60% of whom have been identified as racial minorities, Fiorello said. And district officials say Cortex has also pushed nearly $1 billion in new developments around it.
The district has sponsored companies like medical technology company Stereotaxis, Cortex’s first-ever tenant, and financial services company Block, formerly known as Square. Both companies outgrew their district premises and relocated to downtown St. Louis. Microsoft and Boeing opened offices; Nationally acclaimed Vicia Restaurant and the Aloft Hotel also call the area home.
All of this — its institutional founders, entrepreneurial programs, advances in diversity — has made Cortex a model for innovation districts across the country, if not the world, said Bob Geolas, partner at New York-based economic development consulting firm HR&A Advisors. Geolas previously led the Research Triangle Park innovation district in North Carolina.
“There are a number of projects that we are highlighting as best practices in the United States,” said Geolas, who has advised the district. “Cortex is always on that list.”
In 2019, momentum swelled in the district, then at 99% occupancy, when Wash U announced its $600+ million neuroscience research center. Developers debuted plans for a $115 million office building. And plans for Cortex’s very first apartments began to appear.
Then the coronavirus pandemic hit and delayed all of these projects, except for the development of Wash U, which is under construction.
It also wiped out the revenue Cortex generated from parking and renting. At one point, the county was losing about $250,000 a month between lost revenue and rising expenses, Fiorello said.
The pandemic exacerbated a funding problem that arose when then-Governor Eric Greitens cut Missouri Technology Corp’s budget. cut by almost 90% in 2017. Cortex had relied on MTC as the source for the district’s programs and had set aside reserves to make up for the loss.
From 2018 to 2019, Cortex’s revenue fell 63% to $3.9 million while its expenses rose 29% to $6.3 million, according to Cortex’s latest publicly available financial filing.
“We have experienced acute financial pain from the pandemic and we are still in the midst of it,” said Fiorello, who was appointed CEO in early 2020.
But, he said, the pandemic has also revealed new opportunities. The organization has already taken steps to support them, such as hiring Brian Russell, whose responsibilities include finding other sources of grants and funding, and Natalie Self, who leads its diversity strategy.
“Two years later,” Fiorello said, “I see a light at the end of the tunnel.”
The new plan
The pandemic and financial woes helped Cortex prepare for its future.
In the new roadmap, Cortex will focus on recruiting and developing programs around companies in the cybersecurity, geospatial, life sciences and national security industries. It will also continue to promote “general technology companies,” Fiorello said. Specifically, 10 additional life science companies, 15 national security companies and 15 general technology companies are to be recruited and 2,500 new jobs will be created. The goal is for those businesses to open at Cortex, but Fiorello said it’s still a win if those firms land elsewhere in the region.
The district will add “pandemic-proof” real estate, or specialized spaces that businesses can’t replicate at home, like labs and safe spaces. Virginia-based Westway Services Group announced last year that it would construct a building for government agencies and contractors who handle classified or special information at Cortex. The district aims to have three new buildings under construction or renovated in the next five years.
Cortex will increase the number of entrepreneurs and startup founders who are people of color and women: guide over 700 companies through its training program called Square One; create 500 new jobs; have 1,250 graduates from Tech Education Partnerships and at least 900 of those graduates are employed two years later. It aims for women and people of color to make up 70% of that.
Cortex chief executive June McAllister Fowler said the plan is intentional, collaborative, and most importantly, practical. And it holds Cortex’s leadership and board accountable, she said.
“There is nothing left unsaid in this plan,” Fowler said.
The focus on geospatial data comes as other developers are making it a core part of their projects. Entrepreneur Jim McKelvey and his partner at StarWood Group, John Berglund, are focusing on this industry for their new innovation district in downtown St. Louis. An anchor in their Downtown North Urban Insight District is the Globe Building, which counts several geospatial companies as tenants. Westways also takes up an entire floor there to build his safe room.
Regional leaders say there is enough promise in the geospatial industry to expand efforts across the metro area.
“Sometimes we get too focused on the ‘I win, you lose’ mentality in the region,” Greater St. Louis’ Hall said. “Cortex’s future success is not an island.”
Part of his future is already there.
Cortex had no place for Virginia-based General Dynamics Information Technology when it first looked here in 2012. The geospatial company found space years later and signed a lease just before the pandemic hit, said Paul Luker, senior director of GDIT.
Despite the pandemic restricting events hosted by Cortex, GDIT has been able to make connections with Washington University and St. Louis University — interactions that Luker said were not possible at its old location in south St. Louis County.
“Cortex,” Luker said, “given us everything we could have hoped for.”