CLAYTON • An adviser to St. Louis County Executive Steve Stenger who urged the County Council in 2016 to support a 20-year commitment to rent office space at the former Northwest Plaza shopping mall because it would save $10 million testified on Tuesday that he had never actually read the lease.
And officials in Stenger’s administration were scrambling to prepare for millions of dollars in increased costs associated with the project almost immediately after the council ratified the deal in July 2016.
Those were two disclosures in a tense, two-hour hearing on Tuesday, at which council members revisited claims made by Stenger administration officials two years ago that the unprecedented lease was a good deal for taxpayers. Council members now say they were misled into backing the deal.
The lease for nearly 150,000 square feet at the redeveloped mall in St. Ann, now known as the Crossings, will cost taxpayers at least $69 million, and could run as high as $77 million, according to the newspaper’s analysis of the county’s real estate contracts. The development’s owners, Robert and P. David Glarner, are friends of Stenger who have donated $365,000 to his campaign.
A Post-Dispatch investigation published on Feb. 5 provided the first public in-depth accounting of the real costs, finding that the deal does not save money and has the potential to cost millions.
Days before the newspaper’s story, Stenger’s advisers were still insisting the agreement saved money. But the newspaper pointed out their figures did not include millions of dollars the county will pay for property taxes at the Crossings and to rent empty space at buildings across the county that were vacated months or years before their leases ended. Tuesday marked the council’s second ethics hearing on the matter since the newspaper’s findings were published.
Internal emails between county government employees, obtained by council members as part of their investigation, revealed that several employees were alarmed at the expense and length of the deal.
They were also upset about the unusual negotiations with the Glarners, led by Stenger’s former campaign manager Anthony Badino, that did not include input from career county government employees who would normally be involved in negotiating a lease. By the time those officials were included, in the spring of 2016, Stenger’s office had already decided on the Crossings.
Stephanie Leon Streeter, deputy director of the county’s departments of transportation and public works, testified on Tuesday that she had to edit the boilerplate language in an internal letter about the project to make it clear county employees had not reviewed the lease, or that the lease was typical.
“The best I felt we could say was that they were acceptable,” she said.
WHAT THE COUNCIL WAS TOLD
A June 2016 letter from Glenn Powers, Stenger’s interim chief of operations, urged council members to ratify the deal, and indicated its terms were favorable to those at several sites where the county had expiring leases. But council members Ernie Trakas and Mark Harder noted on Tuesday that Powers’ letter did not disclose that the county would also be liable for costs such as building maintenance and property taxes.
“Did you read the lease before signing it?” Trakas asked Powers.
“I didn’t sign the lease,” Powers answered.
“You didn’t?” replied Trakas, pointing to the signature.
“I’m sorry, I answered in error on that,” Powers said.
Trakas: “Back to my original question — did you read it before you signed it?”
Powers signed the lease because Nichalos Gardner, who was then the county transportation director, had refused to do so. Emails obtained by the council revealed that Gardner had told several colleagues that by entering the lease at Northwest Plaza, the county was “selling our soul to the DEVIL.” Gardner quit in April 2017; he could not be reached for comment.
Council Chairman Sam Page told Powers that council members “have the responsibility to make the decision based on the information we get. You can understand that information that we get with your signature on it would not inspire confidence moving forward. … A key point that is missing here is that this lease may cost $20 million to $30 million more than was presented to us originally.”
The Stenger administration knew right away that the lease was going to cost more money. Budget director Paul Kreidler testified that all of the extra costs expected for 2017 were represented in a single line item — for $2.5 million.
Council members said they had no idea that line item was for increased costs associated with the lease. Kreidler responded that nothing had been hidden from them, and that he thought someone had asked a question about it at a budget hearing.
“So in your world,” Trakas asked him, “$2.5 million buried on page 103 or 104 in a several hundred page budget book is right there for everybody to see?”