Grow Missouri, Inc., an organization funded by billionaire retired financer Rex Sinquefield, has been selected to be one of St. Louis city’s consultants in exploring privatizing St. Louis Lambert International Airport.
On January 26, a five-member selection committee voted 3-0 to move forward with a joint proposal that includes Grow Missouri; Washington D.C.-based consulting firm McKenna & Associates LLC; and global investment bank Moelis & Company LLC.
The committee members who voted in favor included City Counselor Julian Bush, Deputy City Counselor Michael Garvin, and Linda Martinez, the mayor’s deputy of development. Deputy Comptroller Jim Garavaglia voted to abstain, and Tom Shepard, chief of staff for aldermanic President Lewis Reed, did not attend the meeting.
Garvin will now negotiate a contract with the joint proposal team.
The approved proposal states that if the city completes an airport leasing deal, Grow Missouri, Inc. will be reimbursed for “out-of-pocket payments for the fees and expenses” of other joint proposers and any contractors Grow Missouri retain. The proposal also stated that no “other payments” will be made to Grow Missouri.
However, the Sinquefield-funded nonprofit paid for the application into the Federal Aviation Administration’s Airport Privatization Program early last year. Grow Missouri has also launched “Fly314,” its outreach project to gain support for privatizing Lambert. If the deal is successful, Grow Missouri will be reimbursed for the application fee and its promotion efforts.
Then-Mayor Francis G. Slay initiated the application process just weeks before he left the office. Slay’s former chief of staff Jeff Rainford is a lobbyist for one of the potential bidders.
Martinez said that the team submitted a “very specific fee proposal.”
“It’s a sliding scale based on what is generated,” Martinez said. “If the amount generated is zero, they will be paid zero.”
She said she couldn’t give any dollar amounts until the contract is negotiated.
Garvin said at a meeting last week that the Request For Proposals (RFP) for a consulting team went out in October, and they have received 11 proposals.
However, he said there are only two full proposals. And only one of them truly meets the requirements, he said.
Going forward with leasing the airport would require a city ordinance, approved by the Board of Aldermen, or a City Charter amendment, which would require 60 percent voter approval.
Since January 5, former Republican state Senator Tom Dempsey – who also works at Sinquefield’s primary political shop, Pelopidas LLC – has been registered as a lobbyist for St. Louis city. The city’s main lobbyist Jeff Aboussie also represents Great St. Louis, a Sinquefield-backed political action committee.
In short, taxpayers are paying a still unknown amount for two lobbyists with strong Sinquefield ties, and they could potentially pay Sinquefield’s nonprofit to help him achieve his goal of privatizing the airport.
On January 24, Airport Director Rhonda Hamm-Niebruegge spoke to the aldermanic transportation committee about the airport’s operations.
She explained that St. Louis became the first municipally-owned airport in the United States in 1927. Because of that, St. Louis is among only 12 public airports out of 457 throughout the country that is “grandfathered” into a federal program that allows the owners to receive part of the airport’s revenue. The city receives about $6.5 million annually, but that would go away if the airport is privatized.
“One thing I think it’s important to understand – the airlines don’t like us being a sponsored airport,” Hamm-Niebruegge told the aldermen. “They are very vocal about it on a federal level because they feel like that money should stay at the airport so that their costs can continue to go down.”
She said that the fees for airlines are now competitive with others around the country.
“Theoretically, if you’re more cost-effective, that’s a better opportunity for you to grow the traffic at your airport,” she said. “If you’re too high-cost of an airport, it’s going to impact who wants to fly here.”
She explained that the bulk of the growth right now is not the local market but rather connecting flights, mainly through Southwest Airlines. Through connections, the airport traffic overall can increase, although the region itself might not be growing.
“Southwest has changed a lot of their flights that formerly connected through Midway to St. Louis,” Hamm-Niebruegge said. “And they’ve done that because they’re happy with their cost in St. Louis, they’re happy with the projections in St. Louis.”
Last year, there were 14.3 million passengers, she said, putting them at being the 31st busiest airport in the country.
“For fiscal year ending 2017, the FAA came out with a report saying St. Louis was the 7th fastest-growing airport in the country, at 8.5 percent,” Hamm-Niebruegge told the aldermen.
If St. Louis privatized its airport, it would become the only privatized airport in the country – outside of the Muñoz Marín International Airport in San Juan, Puerto Rico.
Enter Jamilah Nasheed
On Friday, January 26, Committeewoman Marie Ceselski of the 7th Ward tweeted that a $750 donation from Grow Missouri showed up in state Sen. Jamilah Nasheed’s January 2018 campaign finance report. Nasheed replied to Ceselski: “What’s your point?? I can’t wait to get rid of your useless ass. #realtalk”
The post also circulated on Facebook, stirring up conversation all weekend.
Then on Monday, January 29, Nasheed issued this statement:
“I am calling for the removal of Grow Missouri, Inc. as a member of the St. Louis Airport Privatization Advisory Team. The conflict of interest this group poses threatens to derail the process with the Federal Aviation Administration and it reduces the public’s trust in the process. This cannot go on. Additionally, the advisory team as a whole has been secretive and as a result, their actions have reduced the public’s trust in the process. I believe this process needs transparency, not backroom deals. Unfortunately, I cannot support the privatization process going forward because of the involvement of Grow Missouri and the lack of transparency.”
Last week, Nasheed announced that she is running for president of the Board of Aldermen to unseat incumbent Lewis Reed in the March 2019 election. Following her announcement, Reed said in a statement that Nasheed’s “true motives are not what’s good for the community.”
In a tweet, Nasheed slammed Reed for the absence of his representative at the selection committee’s meeting.
“TFW you get attacked about your ‘true motives’ by a politician who takes a walk when it's time to show his...”
Shepard replied to her tweet, “Didn’t take a walk. Told them I wasn’t available Fri. afternoon & they set mtg w/o me. Your motives r questionable because you’re known to be untrustworthy.”
On January 30, 18 aldermen sent a letter to the members of the Board of Estimate and Apportionment – Krewson, Reed and Comptroller Darlene Green – asking them to reject the selection committee’s choice of Grow Missouri because of conflicts of interests and concerns from their constituents. Signatures from two members of the aldermanic transportation committee – 19th Ward Alderwoman Marlene Davis and 4th Ward Alderman Sam Moore – were absent from the letter.