A St. Louis city alderwoman plans to introduce a bill next week that would require a public vote for privatizing the city’s assets, including its largest asset – St. Louis Lambert International Airport.
Alderwoman Cara Spencer (D-Ward 20) has consistently criticized the lack of transparency and public accountability in the mayor-led process to consider leasing and privatizing the St. Louis airport.
On June 13, members of the Board of Estimate and Apportionment (E&A) – which includes Mayor Lyda Krewson, aldermanic President Lewis Reed and Comptroller Darlene Green – voted 2-1 to approve a consulting contract with a 16-member advisor team. That team is led by Grow Missouri, Inc., an organization funded by retired financer Rex Sinquefield, a billionaire who has invested heavily in St. Louis and Missouri politics and governance issues. The other two main parties on the contract are Washington, D.C.-based consulting firm McKenna & Associates LLC and global investment bank Moelis & Company LLC.
Grow Missouri is paying for all the consulting costs upfront, but would get all that money back if a deal is signed. According to a press document, the advisor team would also be paid a percentage, depending on the amount of the lease. For instance, if a private entity were to pay the city $1 billion, the advisor team would be paid a 2.75 percent cut (or about $27.5 million), the document states. If the value of a deal were $1.5 billion, the advisor team would be paid a 2.67 percent fee.
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.
At the meeting, Spencer said she requested to speak before the vote was taken but was denied. Her bill, if passed by the board and signed by the mayor, would require a public vote for the sale or long-term lease of any city-owned asset of significance, she said.
“Certainly, the process in which we have undertaken this endeavor has been alarming, to say the least,” Spencer said. “The general public should have the opportunity to weigh in on this matter.”
The comptroller was the lone “no” vote on the Board of E&A.
“We do not have any examples for any city that has been successful with this process,” Green stated at the meeting. “I don’t believe we should be the first to do this.”
Green pointed out 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.
“That would be something that the city could never get back,” Green said, “while this particular contract has no guarantees of any financial payments to the city. None whatsoever.”
Green argued that the “deliverables” in the contract were things that the city already receives, and some parts of the contract regarding paying subcontractors was “open-ended.”
The only financial guarantee in the contract are the fees that the city would pay to the contractor, she said, “which is spelled out very well.”
“Often times, when the city receives and approves a contract like this, we get exactly what’s in here,” Green said. “And for the city right now, it’s nothing.”
Although St. Louis voters approved a $2 million bond issue to buy the airport property in 1928, Green said that voters and the St. Louis Airport Commission were left out of the Board of E&A’s decision on June 13.
“A public vote must be part of the process to decide the fate of the airport,” Green said.
In response to Green’s concerns, Krewson said at the meeting, “Before we know whether we are even interested in this or not, we have to first get started. And this is just the start of that process.”
It’s been 16 months since the Slay administration initiated the process, Krewson said, “so this isn’t something we rushed into.”
Last year, Sinquefield-funded nonprofit Grow Missouri paid for the application into the Federal Aviation Administration’s Airport Privatization Program. 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 and campaign manager Jeff Rainford is a lobbyist for one of the potential bidders.
Since January, former state Senator Tom Dempsey (R-St. Charles) – who also works at Sinquefield’s primary political shop, Pelopidas LLC – has been registered as a lobbyist for the City of St. Louis. 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 to represent city residents’ interests, and taxpayers could potentially pay Sinquefield’s nonprofit to privatize the city’s single most lucrative asset.
Green and Spencer are not alone in their call for a public vote. State Sen. Jamilah Nasheed (D-St. Louis) commended Green’s push to include voters in this process. “We all know someone who works at the airport, uses it for business or benefits from the revenue it brings to our community,” Nasheed said. “That’s why voters should have the final say in any decision that might turn over this public asset to a private group.”
Alderwoman Megan Ellyia Green (D-Ward 15) said there are several different paths a public-vote effort could take – from a vote ordinance specific to the airport to a charter change requiring such a vote on any efforts to lease any public asset valued over a certain amount.
“Many of us are seeking the input we need to make an informed decision before proposing to take it to a public vote,” Green said. “Any efforts to privatize a city asset need to be transparent and include ample public participation.”
A citizen watch group, TeamTIF, also said they are working on an effort to trigger a public vote.
The American requested a comment from Reed and Krewson about a public vote, but did not receive a response on the afternoon of June 19.
Reed said before he voted to approve the contract, “What I’m supporting today is to give the City of St. Louis and the residents the opportunity to see if there is any reason to move forward.”
