In a February 2, 2018 letter published by the St. Louis Post Dispatch, former Saint Louis City Mayor Francis Slay outlined several reasons behind his decision to submit an APPP preliminary application in March of 2017, before he left office. We have reproduced the original letter below and have included hyperlinks that we have independently researched in order to provide insights into the subjects referenced. All linked documents and data are, in our opinion, relevant, but were in no way reviewed or recommended by the author of the original content.
We should explore airport’s untapped potential
By Francis G. Slay
Posted to STLtoday.com on Feb 2, 2018
A great deal has been written and said about the effort being undertaken to explore the possibility of improving St. Louis Lambert International Airport, and generating a much-needed infusion of money to invest in our city through the federal government’s airport privatization program. Unfortunately, much of it is ill-informed.
I initiated the process after many years of listening to airport stakeholders and the business community talk about the airport’s massive debt, limited connectivity, significant excess capacity, and how Lambert does not stack up to airports in other cities.
Additionally, the city government’s ability to provide adequate city services at an affordable cost still has not recovered from the recent recession. By necessity, taxes were increased. The city started charging for trash pickup. Neighborhood and affordable housing spending was reduced. Nearly a thousand city government jobs were eliminated, and public safety has been woefully underfunded. The long-term outlook for the city budget, even with a strong economy, remains troublesome.
As I was nearing the end of my term, I wanted to leave my successor with the best options to move our city forward. I became interested in the Federal Aviation Administration’s waiver program, which allows a limited number of airports to explore the option and opportunity of seeking private investment into and operation of local airports, and to use revenue generated by the airport to fund needed city services and neighborhood improvements.
Getting into the FAA program commits the city to nothing. I expect that, unless the city gets a proposal that would keep the airport under city ownership, improve our airport, increase airport revenues without an increased burden on passengers and airlines, protect the jobs of airport employees, and provide a much-needed infusion of cash to stabilize the city’s finances and make investments in our people and neighborhoods, the Board of Estimate and Apportionment and Board of Aldermen would choose the status quo. But, given the untapped potential of our airport and the precarious state of city finances, I believe we owe it to ourselves to explore the possibilities.
To do this the right way, to write a credible application, to ensure we have all of the facts, to know what our airport is worth, to run a competitive, transparent process, and to evaluate complicated lease proposals would require financial experts, aviation and airport consultants, and other professionals. Such a process could cost millions of dollars the city does not have.
So I asked Rex Sinquefield, as a civic gesture, to consider providing the city with the resources needed to explore this option. He generously agreed. He understands that, if this is not a good deal for the airport and the city, it will not happen.
The fact that the city has entered the FAA process does not mean it is committed to entering into any agreement. It is up to the city leadership to make sure that any such agreement is with a qualified, professional operator, and that the arrangement will be good for the city and the airport. I do not believe the Board of Aldermen, or the Board of Estimate and Apportionment, will agree to a long-term lease unless the region gets a better airport, passengers get better service, the airport employees keep their jobs, the airport’s $800 million debt is paid off, and the city gets a game-changing amount of money.
Under federal law, any proposal would also have to be approved by the FAA and the airlines that use Lambert.
Lambert is a diamond in the rough with a tremendous amount of potential to better connect our city and region nationally and internationally and be the catalyst we need to make St. Louis easier to get in and out of and more competitive. The right agreement with the right operator can make that happen.
Sometimes the best deal is the one you don’t make. But, we owe it to ourselves to find out what is possible.
Francis G. Slay is the former mayor of St. Louis.
- https://www.stlouis-mo.gov/government/departments/comptroller/documents/upload/CityofStLouisMO_CAFR-FY17.PDF (Page 126)
Significant excess capacity
1990 Comprehensive Annual Financial Report
Lambert does not stack up to airports in other cities
Government’s ability to provide adequate city services
- https://wallethub.com/edu/most-least-recession-recovered-cities/5219/ (St. Louis ranks 90th)
- https://wallethub.com/edu/best-and-worst-cities-for-first-time-home-buyers/5564/ (St. Louis ranks 167th)
Taxes were increased
Charging for trash pickup
Revenue generated by the airport to fund needed city services
“Over the longer term, ICF believes that Westchester, Saint Louis, or other pioneering airports will demonstrate the value of the FAA APPP (after its success in Puerto Rico) and will use sale proceeds to higher purposes: leveraging large transportation infrastructure development (as Nashville is considering), offsetting unfunded pension liability (as Chicago attempted to do with Midway Airport), or shoring up other public sector needs. If the U.S. Congress modifies, expands, or liberalizes this program, ICF believes that airport privatization in the U.S. will truly take hold.”
Precarious state of city finances
- https://www.stlouis-mo.gov/government/departments/comptroller/documents/upload/CityofStLouisMO_CAFR-FY17.PDF (Pages 8 & 9)
“Total unrestricted net position decreased by $126.8 million for the year ended June 30, 2017. Unrestricted governmental activities net position showed a $1,240.8 million deficit at the end of fiscal year 2017 as compared with a $1,119.3 million deficit in fiscal year 2016.”