Hidden legal definitions in the Ballpark Village’s development agreement with St. Louis City have allowed developers Cordish Company and the St. Louis Cardinals to leave undisclosed millions in construction costs unmonitored when it comes to hiring minorities and women.
Developers contracted PARIC to complete the $21.65 million “outer shell” and exterior infrastructure on the $100 million first phase of the retail and entertainment complex.
However, that is the only contract the city is monitoring for minority participation on the project’s contract spending and workforce.
Several other general contractors were hired to complete the 25,000-square-foot two-story Budweiser Brew House, the St. Louis Live entertainment plaza and other interior projects – and none of these contractors are being monitored by the city for inclusion.
The St. Louis Development Corporation officials, who negotiated the contract on behalf of the city, have refused to provide the undisclosed contract amounts to The St. Louis American.
Zed Smith, director of asset management for the Cordish Company, also refused to comment on the contract amounts. Smith said the development agreement passed by the Board of Aldermen only required them to build the outer shell, and “that is all we are responsible for.” He said the interior work – which includes drywall, plumbing, electric and carpentry – is considered “user improvements” or “tenant finishes.”
Millions of construction dollars for those tenant finishes are not being monitored by either the city’s Disadvantaged Business Enterprise (DBE) Office or St. Louis Agency on Training and Employment (SLATE.)
The DBE office is responsible for making sure the developers meet the city’s goals – awarding 25 percent of all contracts to minority-owned business enterprises (MBEs) and 5 percent to women-owned business enterprises (WBEs).
SLATE is in charge of reviewing minority workforce participation, and this project’s goals for “boots on the ground” are 17.7 percent African-American workers and four percent other minorities.
‘I would have raised a flag’
Alderman Terry Kennedy, who has led the passage of legislation that ensures minority participation and city monitoring on publicly subsidized projects, said he did not know that partial monitoring was part of the agreement when he voted in July 2012.
“I would have raised a flag,” he said. “I do not have any recollection of this happening in any other project. On other projects, the entire project is included in the various executive orders and ordinances in terms of M/WBE and workforce participation.”
SLDC was responsible for informing the aldermen about the “unusual” nature of the agreement, Kennedy said, but no one did.
Rodney Crim, then SLDC executive director, negotiated the contract for the city, allowing the lack of monitoring. The development agreement defines that “user improvements” are not part of the total “work” that the developers are held accountable for.
Otis Williams, SLDC’s current executive director, defended Crim’s negotiations. He said that because the city is competing nationally for these large-scale projects, “you can’t be as restrictive.”
“There are things you have to do to get them here,” Williams said.
Adolphus Pruitt, president of the St. Louis city branch of the NAACP, said he does not believe compromising the city’s minority participation legislation is the way to attract retailers and economic growth.
“We understand the predicament that the agreement causes,” Pruitt said, “and our position is that we need to make sure going forward that this doesn’t happen in future agreements.”
The project has received a generous amount of local and state subsidies. It received $17 million in bonds from the Missouri Downtown Economic Stimulus Authority (MoDESA). The city authorized a one-percent sales tax at Ballpark Village, which is expected to generate $14 million over 25 years. About $5.5 million of that sales revenue would go to the city and the rest to the developers. Ballpark Village also benefits from a St. Louis City TIF (tax increment financing), which also puts taxpayer money back into the project.
Current numbers
With more than 75 percent of the project completed, PARIC has hired 12 percent MBEs and two percent WBEs on the outer shell, as of Nov. 30 when PARIC last reported its numbers to the DBE office.
Amber Gooding, who has been tracking PARIC’s numbers for the city’s DBE office, said she expects the numbers to meet the project’s goal of 23.9 percent MBE and nine percent WBE when it is completed this spring.
Zed Smith said he could not provide MWBE participation numbers for the other general contractors working on the interior of the 100,000 square feet of restaurant and retail space, which includes the Cardinals Hall of Fame museum.
Gooding, airport director for DBE and community programs, said she was also not aware of any other contractors working on the job site. She was under the assumption that PARIC was handling all areas of construction, she said.
To receive assistance from MoDESA, the agency requires all projects to meet workforce goals of hiring 17.7 percent African-American workers and four percent other minorities. So far, PARIC has employed 29 percent African-American workers, 0.23 percent Asian and three percent Hispanic workers on the outer shell, according to Michael Holmes, executive director of SLATE.
In January 2013, the Board of Aldermen passed an ordinance that requires all TIF and city-bonded projects to follow the city’s workforce goals of 25 percent minorities, five percent women, 15 percent apprentices and 20 percent local residents.
Because Cordish and the Cardinals signed their development agreement about six months before this ordinance passed, Smith said they are not required to follow it. However, insiders say the developers were encouraged to follow the requirement, and therefore they hired a third-party monitor to track the city’s required workforce numbers.
When asked if Cordish was encouraged to follow the city’s ordinance, Smith did not respond.
When asked if Cordish could provide their findings on workforce numbers for local residents, apprentices and women, Smith refused. He said, “We are not required to share those numbers.”
