Updated 9:30 p.m. Wednesday, June 24, with comments from Mayor Lyda Krewson.
St. Louis could be on the hook for more than $44 million in airport privatization consulting fees if it strikes a deal to lease St. Louis Lambert International Airport by July 2021.
Mayor Lyda Krewson killed the consultant contract in January, but it stipulated that consultant fees must be paid in full if the city goes through with a lease within the following 18 months.
Now, there are two efforts underway to put an initiative before voters in November. One effort spearheaded by the St. Louis City NAACP and the St. Louis-Kansas City Carpenters Regional Council, called St. Louis Rising, is heavily funded by local billionaire Rex Sinquefield. The Sinquefield-backed organization Pelopidas has so far donated nearly $400,000.
Sinquefield also funds Grow Missouri, which served as the lead consultant for the city’s nearly two-year exploration of privatization.
Deputy City Counselor Michael Garvin said Wednesday that the provision of the 2018 contract is still valid. He added that Sinquefield’s involvement in the ballot initiative is self-interested.
“To me there is a clear financial motivation here,” Garvin said. “The ballot proposition has a strict set of guidelines that, in my mind, are designed to assure the consultants get their fees paid.”
Garvin said that’s because the St. Louis Rising ballot initiative would require the city to enter into a lease agreement within the 18-month period.
“I do think the public should be aware that one of the consequences of approving this would be that these consultants get paid a substantial fee. So it's not a completely altruistic motive,” he said.
Garvin said under the terms of the contract, the city would be obligated to pay out the money using proceeds from leasing the airport, if it strikes up a deal by next July.
President of the Board of Aldermen Lewis Reed is spearheading a similar effort. He introduced a bill last week that mirrors St. Louis Rising’s ballot initiative. It would similarly put the issue before voters in November.
During a meeting of the aldermanic Ways and Means Committee on Wednesday afternoon, Alderwoman Cara Spencer, D-20th Ward, questioned Reed on whether his bill would also require the city to pay back the consulting fees from the city’s previous privatization effort.
Reed quipped that he has no problem paying back the consultants for their work if it means getting a significant amount of money to improve north St. Louis.
“If I can gain a billion dollars to help eliminate the Delmar Divide, you better believe I’ll give them their money back,” he said.
Reed said his bill would earmark proceeds of a lease to help alleviate problems in north St. Louis, like poverty, crime and unemployment.
Reed’s bill and St. Louis Rising’s initiative would both require a private operator to pay at least $1.7 billion for a long-term lease of the airport.
St. Louis Mayor Lyda Krewson answered a question about the two ballot initiatives during a Monday Facebook Live chat. She said both have “some issues” and added that she would want support from the airlines that operate out of Lambert before getting on board with the efforts.
“The folks that did the first study, through Grow Missouri, for the city of St. Louis are the same folks behind the petition process, and that entity will get paid all the money they have put into this — some estimate that it’s between $45-$50 million,” she said. “That’s a big chunk of money. So we’ll see.”
Here are the terms of the city's 2018 airport privatization consulting contract. Information regarding termination of the contract and fees is found on Page 17:
Correction: An earlier version of this article referred to Pelopidas as a Rex Sinquefield organization. Travis Brown is the CEO and co-founder of Pelopidas, which has been heavily funded by Sinquefield.
Follow Corinne on Twitter: @corinnesusan
Send questions and comments about this story to firstname.lastname@example.org