CLAYTON — St. Louis County has settled a dispute with the owners of the Crossings at Northwest, capping years of controversy over an office lease former County Executive Steve Stenger’s administration signed with some of his most generous campaign donors.
The agreement, entered into late last month, amends the smaller of two leases with entities controlled by Robert and P. David Glarner and releases them from any claims over the 2016 rental agreements that relocated many county offices to the redeveloped site of the former Northwest Plaza shopping center in St. Ann.
In all, it saves the county about $4.1 million by letting it out of one of its leases early, capping rent increases and waiving rent for two years. But a much larger lease covering most of the property and worth millions of dollars will remain in effect through 2036.
Though the lease was not cited in the federal indictment that sent Stenger to prison on pay-to-play charges, it was one of the first major deals to generate scrutiny of his administration’s transactions with campaign contributors. Stenger put a former campaign staffer in charge of the deal and kept it out of the hands of career county government employees who were normally in charge of site selection and negotiations.
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The County Council, led by then-chair Sam Page, held ethics hearings in the wake of a 2018 Post-Dispatch investigation revealing that Stenger’s claims of taxpayer savings from the new lease were false and that the arrangement locked the county into a 20-year agreement that was liable to cost the county millions of dollars more than its prior rental agreements. Though Stenger had claimed a savings of some $10 million compared with the county’s past office leases, the deal looked likely to cost as much as $77 million over its term, almost $10 million more than the county’s prior leases.
When Stenger pleaded guilty and Page became county executive, the council relaunched its inquiry into the lease, voting to issue subpoenas against the Glarners, who had contributed $365,000 to Stenger’s campaigns and refused to appear at public hearings on the matter. The Glarners sued to block the county’s subpoenas before the two sides eventually entered mediation talks in February 2020.
The County Council has said the circumstances that led to the seemingly ironclad 20-year lease were ‘potentially criminal and unethical.’
The county’s office space is rented under two 20-year agreements. The settlement amends only the smaller lease, covering about 15,000 square feet.
Though some council members initially discussed voiding the lease, the far larger lease for 140,000 square feet of space at the Crossings was left untouched in the settlement.
Under the terms of the agreement, the county will get out of the smaller lease nine years early, at the end of 2027. That would save about $3.3 million, though the county may end up having to rent other office space or enter into a new lease agreement at the Crossings.
The agreement also waives rent under the smaller lease for this year and next, saving about $500,000. It caps the rent at its 2020 level of about $256,000 for the remaining years of the lease, removing annual escalations of 3.95%. That saves around another $300,000.
Other concessions from the Glarners include an agreement to pay most utilities and janitorial services five nights a week under the smaller lease.
Each side agreed to cover their own legal costs. The county, represented by its own attorneys and Stephen O’Brien of Dentons, has entered into agreements authorizing up to $300,000 in legal fees to Dentons for the negotiations. The Glarners were represented by JoAnn Sandifer of Husch Blackwell.
Under the larger lease, the county is paying $2.1 million in rent this year, or about $15.16 per square foot. That lease is subject to 3.95% rent escalations through 2026, followed by another five years of rent increases of 2.9%. Rent maxes out at about $3 million for the last five years of the lease, which don’t include any escalations. However, the county is on the hook for property tax payments charged on the property, likely adding millions more to the total bill.
The Glarners and the county agreed to not discuss the settlement and issued a joint statement:
“After meeting with a mediator last year, St. Louis County and owners of the Crossings at Northwest in St. Ann have agreed to resolve all disputes between them without the need for further litigation,” the statement said. “The parties are pleased to have reached the agreement to put the matter behind them and without interruption of the services provided by the County at the Crossings. Further, the parties look forward to working cooperatively and productively together through the remainder of the lease terms.”