The City of Clayton, Missouri, has a dense, well-developed central business district which includes a number of government buildings and three institutions of higher education:  Washington University, Fontbonne University and Concordia Seminary. While the city is a very lively place, twenty-six percent of its area is designated tax-exempt property, causing a major shortfall for the city's principle funding source. In response, the city has long generated some revenue through formal or informal agreements with the tax-exempt institutions, including Payments in Lieu of Taxes (PILOT’s). For many years, Clayton received funds annually from a formal PILOT agreement with Concordia Seminary and enjoyed an arrangement to lease a portion of that institution’s property for use as a community park for a nominal fee.

This partnership worked seamlessly until the Seminary purchased additional property and the city sought to increase its PILOT fee payment. Relations soured, and it appeared the Seminary would neither renew the existing PILOT fee agreement nor allow the city's continued usage of the park. Previously, the PILOT agreement had been tied to the delivery of public safety services. As such, Clayton’s Fire Chief began conversations in 2007 with the Seminary’s Director of Campus Operations about forging a new PILOT fee agreement that focused not on increasing the dollar amount to be paid to the city, but rather on incentivizing improvements to the seminary's safety equipment and facilities. These improvements would then help reduce the city's public safety service expenses. In 2008, the City of Clayton and Concordia Seminary reached an agreement that provided for reductions in the PILOT fee that were contingent on safety expenditures made by the Seminary. Within the limits of the agreement, the Seminary's spending on public safety improvements were credited toward the annual PILOT fee, resulting in an arrangement that benefited both parties.