Federal Reserve District, 8th ; Employment ; Missouri

Susan C. Thomson

English

Research Papers in Economics

community profile
St. James had what Wal-Mart 
wanted—200 flat, buildable acres 
near an interstate interchange.   
In return, the town got 1,000 jobs.
plentiful Green Space along interstate
I
nterstate 44 runs more than 600 miles 
across the center of the country, between 
St. Louis and Wichita Falls, Texas—and 
right through St. James, Mo.  The tiny 
town has parlayed the thoroughfare that 
divides it and the acres of developable land 
nearby into its biggest economic assets.
For Tacony Corp., one of the initial 
attractions to St. James was its location just 
80 miles down I-44 from the company’s cor-
porate headquarters in suburban St. Louis, 
says the president and chief operating officer, 
Bill Hinderer.  Bucking a trend, the privately 
held company moved manufacturing to 
the United States from Asia.  Hinderer says 
Tacony was unhappy with the quality of the 
vacuum cleaners it was making in Taiwan 
and with the engineering expertise there for 
product development. 
To help make the move possible, the city 
of St. James secured $153,240 in state and 
federal grants and added $50,000 out of its 
own coffers to upgrade and improve street 
access to a vacant, city-owned building. 
Tacony started out there in 1997, with 
30 employees.  It now has five times that 
number.
The interstate worked again in the 
city’s favor when Wal-Mart was scouting 
a 100-mile stretch of I-44 for a site for a 
regional distribution center.  The company 
found in St. James exactly what it had been 
seeking—200 flat, buildable acres near an 
interchange.
In 2001, less than a mile from the 
intersection of I-44 and state Highway 
68, Wal-Mart opened its center.  Hiring 
1,000 people right off the bat, Wal-Mart 
immediately became, by far, St. James’ 
largest employer ever.  State and federal 
grants totaling $182,500 paid for utilities 
and a new access road.  The city issued $59 
St. James/Phelps County, Mo.  
by the numbers
                          City  | County
Population  4,216  |  45,156   *
Labor Force  NA  |  22,300   **
Unemployment Rate  NA  |  7%        **
Per Capita Personal Income  NA  |  $39,768 ***
    *   U.S. Census Bureau, 2010 census
  **   BLS/HAVER, July 2011, seasonally adjusted
***   BEA/HAVER, 2009 
largeSt eMPloyerS
Wal-Mart Distribution Center  1,000
Boys & Girls Town of Missouri   280
St. James Public Schools  225 
Missouri Veterans Home  185 
Tacony Corp.   150
       SOURCE: Self-reported
 
    †  Includes five part-time
†
By Susan C. Thomson
photo by steve sMIth studIos
Drives Economy of Tiny Missouri Town
22   The Regional Economist  |  october 2011The Regional Economist  |  www.stlouisfed.org   23
million in 20-year industrial revenue bonds 
to buy the land and to build and equip the 
1.2-million-square-foot center.  The com-
pany is leasing it all for an amount equal to 
the principal and interest and will become 
the owner when the bonds are paid off. 
From its investments in the two compa-
nies, the city’s payoff has been hundreds of 
jobs—secure and with competitive wages 
and benefits, says Bob Wilson, executive 
vice president of Phelps County Bank and a 
long-time member of St. James’ Industrial 
Development Authority (IDA).  “We now 
have younger citizens staying in the area to 
work and raise a family,” he says.
The new corporate jobs have also 
plumped up the cushion against economic 
jolts, a cushion that has long been provided 
by the city’s substantial base of steady public 
and nonprofit employers. 
One of these is the private social service 
agency originally called Boys Town, a  
St. James mainstay since its 1949 found-
ing as a home for troubled boys.  It went 
on to serve girls as well, change its name 
accordingly and offer outpatient care.  Since 
merging in 2009 with an agency in St. Louis, 
it has moved its headquarters there while 
keeping its 442-acre St. James campus.
The Missouri Veterans Home, one of 
seven the state operates, has been a St. James 
stalwart since the home’s founding in 1896.  
Fifteen years ago, it moved into a new  
150-bed building on the same park-like, 
40-acre site.
The city also gets a sustaining economic 
lift from a private philanthropy, the James 
Foundation.  Lucy Wortham James (1880-
1938), a descendant of the family that 
established an ironworks in the area in 1826 
and gave the town its name, set it up for 
her hometown’s benefit.  Annual income of 
about $1.7 million from the trust’s invest-
ments maintains the city’s park, cemetery 
and library, as well as the 1,860-acre Mara-
mec Spring Park, a few miles southeast of 
town.  The foundation also sets aside $5,000 
a year for grants to various civic betterment 
projects.  It deeded 2.25 park acres to the 
city for the $2 million swimming pool it 
opened this past summer.
The foundation has been a community 
cornerstone, “a critical element for stability 
and beautification over the years,” says Peter 
Hofherr, chief executive of St. James Winery. 
Top Left:  Ken Wilkinson assembles a 
vacuum cleaner at the tacony Corp. plant 
in st. James.  tacony, based in st. Louis, 
moved its manufacturing from taiwan to 
the u.s. because it wasn’t happy with the 
quality of the work or the product develop-
ment expertise it had found overseas.
Top Right:  At st. James Winery, Jimmy 
bailey (left) and trevor Metzger transfer 
“must” to tanks for the first pressing of a 
batch of grapes.
Bottom:  In the tasting room at st. James 
Winery, Maribeth Wronkiewicz prepares to 
serve customers.  st. James Winery is the 
largest of about 100 wineries in the state 
and one of about five in the st. James area.  
to draw tourists to the st. James area, 
several wine and grape-themed festivals 
are held every year.
photo by steve sMIth studIos
photo by steve sMIth studIos
photo by susAn C. thoMson
His family-owned business is the largest 
of the state’s approximately 100 wineries, 
with sales of about 500,000 gallons last year, 
a 9 percent increase from 2009.  St. James is 
also home to Meramec Vineyards, and there 
are three other wineries within a few miles. 
Capitalizing on the local wine culture, 
the St. James Chamber of Commerce 
underwrites four wine and grape-themed 
festivals a year, three of them new since 
2009.  Attendance increases at each of the 
two- and three-day festivals every year, 
according to the chamber’s president, Renee 
Ridling.  “I think our future in St. James is 
going to be enhanced by tourism growth,” 
she says.  To better promote it, the cham-
ber took over the city’s tourist information 
center near I-44 and expanded its hours in 
mid-2011.   24   The Regional Economist  |  october 2011
Around the same time, the city acquired 
yet another tourist attraction when Tacony 
opened a vacuum cleaner museum.  The 
display of machines, dating back to the early 
1900s, is in the company’s present plant 
in the city’s 121-acre industrial park. To 
accommodate the growing company’s move 
from its original location, the city gave it 
11.4 park acres valued at $228,000. 
The company has expanded its new build-
ing three times to a total of 200,000 square 
feet as it boosted production and added jobs, 
most recently 35 of them in 2009 and 2010, 
Hinderer says.  Along the way, the city has 
arranged $518,849 in community develop-
ment block grants, which were used to build  
a new water storage tank for the plant and to 
pave and light an access street. 
Tacony is the only full-line vacuum 
cleaner plant left in the U.S., producing the 
high-end Riccar and Simplicity brands, sold 
through dealers.  With the move stateside, 
the company has “succeeded in making 
higher quality products, better engineered 
for the U.S. market but at higher costs,” 
Hinderer says.  But the move has been worth 
it, he insists.  
Tacony is the largest tenant in the park, 
which is home to 10 businesses, including 
two machine shops, a cabinet manufacturer, 
a concrete block maker, the offices of a truck-
ing company and a new high-tech startup.
The last is Product Innovation and Engi-
neering LLC, which sells unique software 
for high-speed manufacturing.  The soft-
ware was developed at the National Science 
Foundation’s Small Business Technology 
Transfer program at Missouri University of 
Science and Technology (MS&T) in Rolla, 
Mo.  The software was based on research by 
Frank Liou, a professor there.  The eight-
employee company, now co-owned by Liou 
and his wife, Lisa, put up a 3,500-square-
foot building in the industrial park and 
moved there in July.  Lisa Liou is president.
The company took advantage of the city’s 
offer of 1.5 free acres in the industrial park 
for every eight jobs created there.  The offer 
stands, and about half of the 30-year-old 
park remains available. 
For years, the city hoped to find a single 
taker for one 40-acre parcel there, says Butch 
Tucker, president of the Industrial Devel-
opment Authority.  That no longer seems 
Top:  the city’s library and new swimming 
pool are among the legacies of a private 
philanthropy, the James Foundation, which 
was established by a descendant of the 
family that gave the town its name.
Above Left:  buel F. Leuthen enjoys the 
fresh air at the Missouri veterans home   
in st. James, one of the nonprofit   
employers that have kept the economy   
on an even keel over the decades.
Above Right:  tom Gasko relaxes at 
tacony’s vacuum cleaner museum,   
where he is the curator.  Room after   
room of vacuums—some at least   
100 years old—help to draw tourists   
to st. James.  Gasko, a longtime   
collector, donated the vacuums.
photo by steve sMIth studIos
photo by steve sMIth studIos
photo by susAn C. thoMson
photo by steve sMIth studIoseleven more charts are available on the web version of this issue.  Among the areas they cover are agriculture, commercial 
banking, housing permits, income and jobs.  Much of the data is specific to the eighth district.  to see these charts, go to 
stlouisfed.org/economyataglance
U.S. AGRICULTURAL TRADE FARMING CASH RECEIPTS   
06 07 08 09   10 11
90
75
60
45
30
15
0
NOTE:  Data are aggregated over the past 12 months.
Exports
Imports
July
Trade Balance
B
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D
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A
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06 07 11 08 09 10
210
190
170
150
130
110
90
NOTE:  Data are aggregated over the past 12 months.
August
Crops Livestock
B
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CIVILIAN UNEMPLOYMENT RATE INTEREST RATES   
06 07   08 09 10 11
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P
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August
06 07 08 09 10 11
6
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10-Year Treasury
Fed Funds Target
August 1-Year Treasury
P
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NOTE:  On Dec. 16, 2008, the FOMC set a target range for 
the federal funds rate of 0 to 0.25 percent.  The observations 
plotted since then are the midpoint of the range (0.125 percent).
INFLATION-INDEXED TREASURY YIELD SPREADS RATES ON FEDERAL FUNDS FUTURES ON SELECTED DATES
3.0
2.5
2.0
1.5
1.0
0.5
0.0
–0.5
–1.0
–1.5
–2.0
–2.5
NOTE:  Weekly data.
5-Year
10-Year
20-Year
P
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Sept. 16, 2011
07 08 09 10 11 Sept. 11 Oct. 11 Nov. 11 Dec. 11 Jan. 12 Feb. 12
0.25
0.20
0.15
0.10
0.05
CONTRACT MONTHS
P
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4/27/11
6/22/11 9/21/11
8/09/11
REAL GDP GROWTH CONSUMER PRICE INDEX
06 07 08 09 10 11
8
6
4
2
0
–2
–4
–6
–8
–10
NOTE:  Each bar is a one-quarter growth rate (annualized); 
the red line is the 10-year growth rate.
P
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06 07 08 09 10 11
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August
CPI–All Items
All Items Less Food and Energy
economy at a Glance
realistic to him.  Nor does he expect more 
developments on a Wal-Mart scale or, given 
the current international business climate, 
more corporate repatriates like Tacony. 
Hinderer agrees.  Although reaction to 
the company’s move has been overwhelm-
ingly positive, he says, he knows of no others 
that have followed suit as a result. 
While receptive to prospects of any size, 
the IDA is mostly counting on smaller 
manufacturing, wholesale and retail enter-
prises, Tucker says.   
“Home runs [like Tacony and Wal-Mart] 
are few and far between,” says Brad Frazier, 
the Wal-Mart center’s civic-minded general 
manager.  “What I’d like to see is a group 
of smaller businesses”—singles, in baseball 
terms.  As possibilities, he and others men-
tion more spin-offs from MS&T, which is 
just 10 miles away.  
Community leaders are just as eager for 
more commercial development.  In the city’s 
local customer base, they count not only 
residents but also Wal-Mart’s 1,000 employ-
ees, drawn from as far as 50 miles away.  
These people are already shopping at local gas 
stations and convenience stores, says Mayor 
Dennis Wilson.  “Additional retail would 
be an enticement to these folks when they 
get off shift to stop and shop more,” he says.  
It would also provide the city with much-
needed additional sales tax revenue, says Bob 
Wilson, the banker and the mayor’s brother. 
Toward that end, the city is promoting 
one 13-acre parcel, about a block from the 
interstate, with a half-empty strip shopping 
center on it.  Candace Connell, the city’s 
community development director, envi-
sions a mixed-used development, possibly 
including a grocery store, farm supply store, 
discount store, and hotel or motel.  The city 
has signaled its willingness to offer tax-
increment financing to a developer. 
In all, the mayor estimates that there are 
at least 100 acres of developable land left 
within the city limits, most of it “fronting or 
just a few blocks off the interstate.” 
Susan C. Thomson is a freelance writer.
The Regional Economist  |  www.stlouisfed.org   25

Plentiful green space along interstate drives economy of tiny Missouri town

http://stlouisfed.org/publications/pub_assets/pdf/re/2011/d/stjames.pdf

Plentiful green space along interstate drives economy of tiny Missouri town

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