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ST. LOUIS — City officials this week said that another $2.5 million in grants slated for North Side businesses and nonprofits will be canceled, including awards investigated by the Post-Dispatch.

In all, 14 businesses and nonprofits, in line for nearly $500,000 in grants, are having their awards rescinded. One is a demolition business yet to do any demolition. Another is a computer services firm headquartered in St. Louis County.

In addition, the Urban League of Metropolitan St. Louis is forfeiting its bid for a $2 million grant. Michael McMillan, the organization’s CEO, said the project that the grant money was supposed to aid can no longer be done.

The moves will bring the total number of canceled grants to more than 35, and the total amount pulled to nearly $5 million. Officials plan to redistribute the cash to some of the other 400 or so organizations that applied for money.

The news comes in the wake of Post-Dispatch reports on the program and is the latest twist for a high-profile initiative meant to revitalize the city’s impoverished north side, a top priority for Mayor Tishaura O. Jones.

The $37 million initiative is supposed to bring back old business corridors and offer North Siders opportunities they haven’t had in previous decades.

But ever since the city’s economic development agency, St. Louis Development Corp., announced picks for the grant money last summer, they’ve been under scrutiny.

Post-Dispatch reporters found grants were headed to organizations headquartered downtown and in the Central West End. Others listed addresses in boarded-up buildings and vacant lots. Three awards, worth nearly $1.3 million, were on course for entities with ties to the family of Alderwoman Shameem Clark Hubbard, who sits on SLDC’s board and sponsored a bill authorizing the grants.

By September, SLDC officials were telling aldermen that there had been some vetting mistakes. They blamed a third-party contractor for the shoddy work. They promised to double-check each grant before cutting any more checks.

A few months later, SLDC officials said they had canceled seven grants worth more than $1.7 million, including a $739,000 award to one of the organizations led by a Hubbard relative.

They later nixed a few other grants, including one to a bar that had been closed for three years.

But, in February, a Post-Dispatch review found at least 44 questionable firms still in line for money, including:

• 27 that appeared to not be operating, or were barely operating.
• nine that were operating, but not out of north St. Louis locations.
• at least eight that couldn’t deliver on proposed projects because they wouldn’t have enough money.

SLDC officials said then that they were still vetting all of the grants, and records indicated more could be pulled.

Among the 14 getting awards yanked this week was IT firm When You Require Computer Services, in line for a $50,000 grant. The business’ owner, Micah Wangia, said the company counted as a north side business because it had storage there. But its headquarters, and Wangia’s office, were in Shrewsbury.

Halo Demolition, in line for $25,000, lost its grant, too. Despite its name, its owner, Rufus Shannon, said he has yet to do any demolition. Shannon said he’d been trying for five years, but between his health, at 72 years old, and the pandemic, things hadn’t worked out.

Meanwhile, the Urban League’s withdrawal freed up $2 million for the grant program, and came as a bit of a surprise.

The organization had taken some criticism over the summer from North Side business owners who felt the organization, with its tens of millions of dollars in revenue per year, shouldn’t get a grant.

But SLDC made no public move to change that.

As late as October, McMillan, the Urban League CEO, was telling the Post-Dispatch how the money would add to a $60 million project upgrading the organization’s north side headquarters and the surrounding area.

“These funds will help us,” McMillan said on Oct. 2.

Then last month, when the Urban League grant came for approval at SLDC’s board meeting, officials deferred voting on it, with little explanation.

On Wednesday, McMillan cast the withdrawal as a practical one. A lot of time has passed since the initial discussions of the project. Meanwhile, construction costs rose, making completion of the project unaffordable.

“As good stewards of the resources entrusted to us,” he wrote in a text message to the Post-Dispatch, “we believe it is in the best interest to return these funds to SLDC so that they can be redirected toward other impactful initiatives that will benefit the city.”

Jacob Barker of the Post-Dispatch contributed to this report.