ST. LOUIS • A nonprofit funded by retired financier Rex Sinquefield is part of a team of companies chosen Friday to guide the city government through the ins and outs of potentially privatizing St. Louis Lambert International Airport.
A selection committee voted 3-0 to pick the Sinquefield-affiliated Grow Missouri Inc. and two other firms, McKenna & Associates LLC and Moelis & Co. LLC, to seek and evaluate proposals from companies that want to lease the airport.
The decision means that Sinquefield, a St. Louis-based megadonor to political campaigns across Missouri, will continue to be heavily involved in the privatization process initiated by then-Mayor Francis Slay weeks before he left office last year.
Grow Missouri already has funded activities surrounding the city’s application that spurred a decision by the Federal Aviation Administration to allow the city to begin negotiations with private entities interested in leasing and running Lambert.
The McKenna firm, based in the Washington, area, also has done work for the city on the privatization issue.
Voting Friday in favor of picking the Grow Missouri-McKenna-Moelis team to handle the next stage of the process were three members of Mayor Lyda Krewson’s administration.
They are Linda Martinez, the deputy mayor for development; City Counselor Julian Bush; and Deputy City Counselor Michael Garvin.
An aide to Comptroller Darlene Green, James Garavaglia, abstained. Absent was the fifth member of the committee, Tom Shepard, an aide to Aldermanic President Lewis Reed.
In a statement after the vote, Krewson said that although the airport had improved “significantly over the last few years, no one argues that it is as good as we would like it to be.”
Krewson continued: “Our leisure and business travelers desire more direct flights to more locations and better and more competitively priced services. Our regional economy needs additional freight transportation. Achieving better airport service is the highest and primary objective of exploring” privatization.
Privatization supporters in the past also have said a lease agreement could potentially bring hundreds of millions of dollars to help fund city government. That could involve an influx of money up front or a series of payments over the course of a lease.
But the selection committee’s decision and the overall process drew sharp criticism from Alderman Cara Spencer, who attended the meeting.
She said in an interview that there had been a lack of transparency from the start and that the consultants had an incentive to push for a privatization deal because they’d be paid only if one was lined up.
“Their incentive is to say yes,” she said.
She also criticized the selection of the Sinquefield-related firm to continue guiding a process that it started. Moreover, she complained that Airport Director Rhonda Hamm-Niebruegge wasn’t part of the committee.
“I find the lack of inclusion of the airport director really alarming, quite frankly,” Spencer said.
She noted that an aldermanic committee had heard Thursday from Hamm-Niebruegge about Lambert’s rebound in recent years with more and more flights.
The selection committee decision followed a series of meetings to consider 11 proposals from companies seeking to advise the city on the next stage of the process. But Martinez said in an interview that only two of the proposals covered all the parameters sought by the city.
Martinez said Garvin would now negotiate details of a contract with the three firms on the winning team. Martinez said they had proposed what fees should be paid for their services, but she declined to disclose the amounts or whether those were still up for negotiation.
“I can’t talk about anything inside the proposals until we sign a contract,” she said.
But the firms would be paid only out of the proceeds of any privatization deal that ends up being worked out, city officials said. The contract still needs approval by the city’s chief fiscal body, the Board of Estimate and Apportionment, made up of Krewson, Reed and Green.
Grow Missouri, the Sinquefield-funded nonprofit, would be paid only to reimburse any out-of-pocket payments it makes to the McKenna and Moelis firms and to any other contractors hired by Grow Missouri.
City officials emphasize that any decision on whether to privatize and with whom is a long way off. Any leasing decision needs approval by aldermen, the estimate board, Lambert’s airlines and the FAA.
The motion approved by the selection committee said the city was committed to “undertaking a rigorous public engagement” regarding the privatization issue.
Moelis, a New York-based investment bank, would be the lead financial adviser in seeking and evaluating bids, and McKenna would identify experts dealing with environmental, legal, title and other issues.
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