DOWNTOWN – Why would the city want to privatize St. Louis Lambert International Airport? This is the first in a litany of questions and a crush of controversy surrounding the proposal.
What would that even mean?
The biggest changes you would see, according to the working group currently exploring privatization policies, would not be in the terminal. It would be on the outskirts of the facility where, currently, there is very little.
“Right now the city has a thousand acres right next to the airport,” Deputy Mayor Linda Martinez said in an interview. “Completely vacant land. To me that’s a financial opportunity, a job opportunity, an economic opportunity for the city and the region.”
That land, and runways that are used at about 50 percent of their capacity, need development, she said, and the city can’t afford to do it. Martinez said a potential advantage of entering into privatization was that a private entity could handle the development, and the city could, theoretically, get a big check up front and a cut of the profits afterward.
“This is the way to have the best of both worlds,” she said. “Take the assets that are already owned by the city and take the debt and equity that we can’t do by ourselves.”
Asked if this was essentially letting someone else take the risk on the city’s behalf, she replied, “Exactly. They take the risk, but if there’s a return to it the city would get a return and the investor would get a return.”
But if privatization is such a great idea, why hasn’t anyone else in the United States, besides Puerto Rico, done it?
“There have been a number of attempts in the past,” St. Louis Budget Director Paul Payne said. “Like [Chicago’s] Midway went through that in 2008. They almost brought it to conclusion, but then the recession hit, then it didn’t pass. Otherwise it probably would have passed.
“You’ll see in Europe and other areas it has taken root, and those are the areas you want to explore in evaluating this option.”
Alderwoman Cara Spencer, 20th Ward, a leader of those opposing a privatization deal, raises that and many other questions.
“Taking a large gamble like that with our city’s largest asset is really concerning to many of us,” she said after a recent Board of Aldermen meeting.
Right now it is impossible to say whether the deal would be a good one or a bad one, because there has been no offer.
No numbers have been presented by potential bidders. None of that has been requested yet. That will come when the city requests qualifications, then proposals. Those moves are still weeks or months away.
Opposition to the plan at this point has been much more a case of skepticism about the process.
“We have literally no information about not just a potential proposal but why privatization is even being considered at this point,” Spencer said.
She said her problems with the process began with the lead consultant in the project, a group called Grow Missouri, which has backing from billionaire Rex Sinquefield among others. (Grow Missouri’s president holds a minority investment in MetroSTL.com.)
Spencer said that their deal, which says they won’t get paid unless the city decides to privatize the airport, stacked the deck in favor of privatization.
“You’re guaranteeing a conflict of interest with the consultant they’ve hired,” Spenser insisted. “And in fact we saw that the [Request for Proposal] was written with that strange provision that they only get paid out of the proceeds out of the airport privatization, and they were the only respondent to the RFP that they wrote.”
But the people in City Hall running the working group say the ones in charge are those looking out for the city.
“Nobody is dictating an outcome to us,” Martinez said. “They are advisers. They are not the leaders. “
Payne echoed the sentiment.
“I think the important thing is we have set some goals in the process, and no matter who makes the recommendation, as long as the city sticks to its guns and with its objectives throughout this process and is comfortable reviewing everything we receive, if we meet that goal we can proceed, and if we don’t meet that goal we don’t go through with it.”
Then there’s the question of who makes that decision. The two sides tell different stories on this front.
“There’s really not going to be any mechanism by which those members of the public or the Board of Aldermen, for that matter, will be able to evaluate,” Spencer claimed, “not just the proposal but if privatization even is an idea to consider.”
But Martinez said Spencer was simply wrong about that.
“There’s not predetermined outcome here,” she said. “The people that make the decision are the Board of Aldermen and the Board of Estimate and Apportionment, and they’ve not taken a position. And I’m just a city employee trying to make an opportunity available for the city.”
That debate, which has been underway publicly for weeks, finally led to the City Counselor’s office sending a letter to Spencer saying that the board would, in fact, have a say.
“It has been obvious to anyone paying attention that Mayor Krewson was not seeking Charter authority to execute an airport lease,” City Counselor Michael Garvin wrote in a letter on Sept. 18, “and that an ordinance approved by the Board of Aldermen and [Estimate and Apportionment] will be required for any airport lease transaction.”
Meanwhile, Spencer and Martinez also differ on the importance of a citywide vote, something Spencer said was promised in an application to the Federal Aviation Administration to enter the privatization program in 2017.
“It was clearly laid out that the public would have a vote in that process; clearly there has been a change of course and a change of mind,” she said.
But the advisory group said a vote would simply give decision-making power to the mayor, something they feel is less transparent than going through the current process.
The working group won’t say when they will start seeking so-called requests for qualification, other than it will be “very soon.” According to their website, the step is actually months behind schedule. From there it would be about another year until a decision could be made.
The only certainty at this point is that the airport is likely to be at the center of a huge fight between now and whenever then is.
Spencer commented, “I’d like to see us go back to the beginning if we’re serious about airport privatization and handle it in an open and transparent, publicly engaged manner,” indicating that then she might warm to the process.
Meanwhile Martinez insisted her working group had been transparent already.
“If anybody says we haven’t let people know this is the way we were going forward and we were somehow hiding something, I guess they just haven’t really been paying attention,” she said. “We do things in the city, a lot of the times we do things the same way year in and year out, and we expect a different outcome. And what I like about this process is, we’re trying something new.
“We’re trying something different to see if there is a possibility that the city might have a different outcome for the airport and financially.”