St. Louis cancels additional North City ARPA grants as audit and lawsuit continue over selection process

City board rescinds smaller awards and revisits disputed recipients

St. Louis officials have canceled additional awards in the North St. Louis Small Business & Non-Profit Grant Program, a pandemic-era effort funded with American Rescue Plan Act (ARPA) dollars that has drawn scrutiny over how recipients were chosen. The latest actions were taken by the St. Louis Development Corporation (SLDC) board on Thursday, as the city continues distributing other grants while a state audit and a federal lawsuit remain active.

In the most recent vote, SLDC ended a set of $12,500 grants that had been presented as smaller awards for applicants who did not receive larger amounts. The board also removed from consideration some of the program’s most publicly disputed initial awards, including recipients tied to a sitting SLDC board member and a former St. Louis mayor. Those rescissions add to a longer-running reassessment of awards made early in the program’s rollout.

Program scale and timeline pressures

The North City program was designed to channel tens of millions of ARPA dollars to businesses and nonprofits in parts of the city that have experienced long-term disinvestment. SLDC has reported awarding close to $25 million to roughly 40 entities, including a mix of neighborhood nonprofits and local businesses. City officials have also faced a firm federal spending deadline: ARPA funds must generally be obligated and spent within set time limits, and unspent dollars can be subject to recapture.

That timing has become a central tension for the city. Some applicants and business owners have questioned why additional money is moving while the state audit is still underway. SLDC, city leaders, and other participants have said the program has gone through leadership changes, internal review steps, and increased public documentation, including a transparency portal intended to show applications and elements of the scoring process.

What is being investigated

Missouri State Auditor Scott Fitzpatrick’s office has been reviewing SLDC’s handling of the program following complaints that alleged conflicts of interest and other irregularities. Separate reporting over the past year has documented disputes over whether SLDC carried out a promised re-review of conditionally approved applications, as well as disagreements between city officials and critics about the program’s controls and documentation.

Beyond the audit, a federal lawsuit challenging aspects of the program remains pending, adding legal uncertainty even as funds are being distributed. SLDC and city leaders have previously said additional disbursements would be paused or adjusted as concerns were addressed, while critics have continued to call for clearer explanations of eligibility checks and how scoring decisions were made.

Key takeaways

• SLDC has canceled the program’s smaller $12,500 awards and rescinded some of the most controversial initial grants.
• Grant distributions continue for other recipients as audit work nears completion and litigation remains ongoing.
• City officials face deadline pressure to deploy ARPA funds, a factor shaping decisions while oversight reviews proceed.

St. Louis officials have framed the latest cancellations as part of tightening program controls and narrowing awards to recipients that can meet eligibility and compliance requirements.

Further board actions are expected as auditors finalize findings and the lawsuit advances, both of which could affect remaining awards and any future redesign of the program’s selection and verification process.