The Missouri Senate approved HB 3231 on Wednesday, advancing a sweeping redevelopment bill that would let cities create state-backed "innovation districts" with layered financial incentives. The Missouri House must vote on the amended bill by 6 p.m. Friday, when the 2026 legislative session ends.

The bill bundles several tools into a single framework: office-to-residential conversion tax credits covering up to 30% of project costs, tax increment financing, property tax abatements, startup investment incentives, business relocation incentives, and dedicated public-safety funding tied to new tax revenue generated inside each district. The legislation also creates a Rural Missouri Development Fund, which would receive a portion of revenues from high-performing innovation districts.

Because the Senate amended the bill, the House can approve the changes, negotiate revisions, or send it to a conference committee. If both chambers agree on final language, HB 3231 goes to Gov. Mike Kehoe for signature. Most provisions would take effect Aug. 28.

An earlier version of the bill included a $50 million cap on office-conversion tax credits, according to the St. Louis Business Journal. Whether the Senate-passed version retains that cap is unclear.

Chesterfield's $2 billion Downtown redevelopment, with its office-conversion plans and existing $300 million in locally approved incentives, is the type of project the bill's framework appears to support. No local officials have confirmed they would pursue a state innovation district designation. The Staenberg Group's 96-acre project on the former Chesterfield Mall site is expected to include up to 2,363 residential units, with vertical construction targeted for summer 2027.

"This is a legacy project, this is one I'm really going to be proud of," Michael Staenberg, president of The Staenberg Group, said in November when infrastructure work began. "It's a 2 billion dollar project."

The bill has drawn debate over whether large developers could benefit disproportionately from diverted tax revenue. The House has one day left to act.