Denver International Airport last month pulled the plug on a nearly $2 billion deal with a Spanish company leading a public-private partnership.
That’s of interest in St. Louis, where the company — Ferrovial Airports — may bid to lease St. Louis Lambert International Airport. Some city officials are taking a wait-and-see approach, while others hear alarm bells.
“I think we need to take a very critical look if we want to accept any bid from them (Ferrovial), given the experiences Denver has had,” said Alderwoman Megan Green, D-15th Ward.
Green points to the fact that former Mayor Francis Slay, who started the privatization process in the weeks before he left office in 2017, is now a registered lobbyist for Ferrovial.
Over a year ago, the Denver airport hired Great Hall Partners, a joint venture among Ferrovial Airports, Saunders Construction and JLC Infrastructure. The group signed on to complete a construction project on its main terminal, as well as to operate the terminal and its concessions for the next 30 years. But in August, Denver Mayor Michael Hancock gave the OK to terminate the contract.
Getting out of the deal will put the airport back at least $200 million.
During a press conference in mid-August, Denver International Airport CEO Kim Day said the airport would take back control of the project within 90 days and pay the full cost of the $650 million construction project.
“We are very far apart in terms of cost, and schedule and our values — prioritizing safety, the passenger’s experiences and our airline operations,” she said.
Great Hall Partners was delayed on its timeline by more than three years and was over budget by more than $300 million.
In a statement, the company said the catching point was the discovery of issues with the airport’s concrete once the project was already underway.
“As a result, and as one would reasonably expect, there were substantial increased costs and time overruns. We are extremely disappointed with DEN’s decision but are nonetheless committed to ensuring a safe, professional and smooth withdrawal,” the statement said.
St. Louis city officials want to wait and see
Members of the St. Louis Airport Advisory Working Group, which is considering whether to privatize Lambert, say it’s too early to draw conclusions between the deal in Denver and any possible deal in St. Louis.
Linda Martinez, the mayor’s appointee to the group, says they need to wait to see what bids come in before making a judgment on Ferrovial or any other potential bidder.
“If the operator isn’t a good operator, the team won’t be approved,” she said during an appearance on St. Louis on the Air Wednesday.
“If they do have great operation opportunities and financial standing, then we’ll be able to approve them for the second part of the process, which would be a request for actual proposals.”
The working group is finalizing a request for qualifications, which would vet any potential bidders, but Martinez wouldn’t nail down a date for its release.
Paul Payne, St. Louis budget director and head of the working group, also spoke on the program.
“Until we see it (a proposal), we’re not going to be able to gauge one way or the other,” he said.
Asked whether the terminated Denver deal gave him pause about the potential pitfalls of privatization, Payne said that will be up to bidders to explain.
“It’s a question they’re going to be asked, and it’s going to be one they’re going to have to answer if you get to that point,” he said. “And we’re going to have to feel comfortable with that before we proceed.”
Martinez, Payne and other members of the working group have been careful to frame the process as one that could stop at any moment.
“There’s no predetermined outcome,” Martinez said. “I think there’s been a lot of concern because we don't know what the eventual determinations will come to.”
But Alderwoman Green has been skeptical of the process to privatize Lambert from the beginning, in part because of what she describes as ethical concerns, including Slay’s role in the process.
“I don’t think we should even be moving forward given the amount of conflicts of interest that we’ve seen,” she said.
Green and others have also expressed concerns about a lack of transparency. The working group has been hosting public meetings for more than a year, but the bulk of the conversation has taken place during closed sessions.
That includes discussion detailing the contents of the request for qualifications, which will set up the city’s parameters for any potential deal to lease the airport.
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