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Privatization features a large cast, big dollars

Terminal 1 [St. Louis Lambert International Airport photo]

The cast of players in the unfolding drama about privatizing St. Louis Lambert International Airport is a large one. Not surprisingly, many in that cast come with a considerable price tag.

Substantially all that cost has been paid by retired billionaire Rex Sinquefield, whose behind-the-scenes activities have been carried out by Grow Missouri, a nonprofit organization he funds. As a political action committee, Grow Missouri has actively promoted causes Sinquefield has favored and candidates he has supported, including the now defunct Better Together effort and former county executive Steve Stenger.

Stenger now is serving a sentence in federal prison after pleading guilty to honest services bribery and mail fraud earlier this year.

Travis Brown heads Grow Missouri and is co-leader of the advisor team that includes representatives from a number of consulting, legal, financial and communications firms.

Grow Missouri was one of three firms selected by the city of St. Louis to play the lead roles in decision making on the privatization issue. The other two are:

McKenna & Associates LLC, an Arlington, Virginia-based operation that advertises itself as “a boutique advisory firm that provides management and consulting services,” including fund raising. Representing the company as co-leader on the privatization advisor team is Andrew McKenna, its founder, president and CEO. Three other McKenna employees also are on the advisor team.

Moelis & Co. LLC, a New York-based investment bank that will advise on seeking and evaluating proposals from organizations interested in bidding on a Lambert lease and operating agreement. The firm has six people on the advisor team.

St. Louis Mayor Lyda Krewson, who continued to support the privatization study launched by her predecessor Francis Slay upon taking office in 2017. As mayor she is a member of the Board of Estimate and Apportionment, which must approve any privatization agreement. Other members of the board are Lewis Reed, president of the St. Louis Board of Aldermen; and Darlene Green, St. Louis city controller.

Members of the Board of Estimate and Apportionment named above also serve with Paul Payne, St. Louis budget director, as voting members of the group of city officials working with the advisor team. Non-voting working group members are Rhonda Hamm-Niebruegge, director of airports;

Marlene Davis, who chairs the board of aldermen’s transportation and commerce committee; and Julian Bush, St. Louis city counselor.

St. Louis Airport Commission, an appointed body that oversees airport operations.

At a recent meeting, members complained they have been left in the dark about what’s happening on the privatization front and were unable to answers questions they are being asked. To help deter the embarrassment of not being able to respond, a commission member suggested their names should be removed from the privatization website, fly314.com.

In addition to Grow Missouri, McKenna and Moelis, other organizations with one or more representatives on the advisor team include:

Squire Patton Boggs, an international law firm noted for its lobbying activities. It has numerous offices worldwide and will provide public finance and compliance counsel services with three representatives on the advisor team.

The Wicks Group, a firm providing regulatory and airline counsel services. It has four people on the advisor team.

Ellinger and Associates LLC, a Missouri, law firm that will provide general counsel and compliance services. Two Ellinger attorneys serve on the advisor team.

Clayborne, Sabo & Wagner, a Belleville law firm, with three members on the advisor team, who will provide real estate advice and community outreach.

Mayer Brown, a global law firm with one of its major offices in Chicago. It has four serving on the advisor team and will offer transaction documentation counsel.

Jones Strategic Advisors – a St. Louis area consulting firm, will focus on community and stakeholder outreach. The firm’s principal, Mike Jones, is an advisor team member.

Charbonnet & Associates, a New Orleans law firm with two advisor team members, will provide environmental assessment oversight, airline communications and community outreach.

Metropolitan Strategies and Solutions, a consulting firm with offices in St. Louis and Washington, DC., will handle communications and community outreach tasks.

Stifel, Nicolaus & Co., a full service brokerage and investment banking firm headquartered in St. Louis. The company has two members on the advisor team.

Jeff P. Aboussie Regional Strategies,  a former St. Louis airport commissioner. Aboussie served as executive secretary-treasurer of the St. Louis Building & Construction

Trades Council and will work on community outreach and legislative activities.

Greenberg Traurig, a Miami-based law firm with offices in other U.S. cities, Europe and Asia, will provide independent transaction counsel for the city’s Board of Aldermen.

Siebert Cisneros Shank & Co. LLC,  a full service investment banking and financial services company that recently merged with the Williams Capital Group. Its new name is Siebert Williams Shank & Co., LLC [SWS]. With two advisor team members, the firm, along with PFM Group and its two advisor team members are to supply analysis, advice and consulting related to services provided by other providers.

This collection of consultants and financial and legal experts doesn’t come cheap.

Budget Director Payne estimates the monthly cost of fees and expenses is averaging about $800,000, or a projected $20 million during the life of the project.

All outlays are covered by Grow Missouri but the potential lessee’s offer will pay for reimbursements and any closing costs.

Although any transaction must be approved by the St. Louis Board of Aldermen, the fact that upfront expenditures will be reimbursed only if a deal is made presents what many observers believe is a conflict of interest favoring a recommended deal. 

That and other concerns will be examined in the next article.

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