On a brisk October morning in 2001, a group of politicians, developers and other dignitaries met at Parks Airport and boarded a plane headed for Jefferson City for the sole purpose of attending a meeting at the Missouri Development Finance Board. The flight, specially arranged by Steve Stogel, president of DFC Group, was shuttling a virtual booster club, minus the flags and pom-poms of course, for a $73 million redevelopment project for Old Post Office Square. St. Louis Deputy Mayor of Development Barbara Geisman was on board, as was State Appellate Judge James R. Dowd, Craig Schnuck and representatives from Webster University.
Stogel, the financing guru behind the plan, clearly wasn’t taking any chances when it came to shoring up state support. The project required a significant state investment in the form of tax credits for corporate donations. But in retrospect, getting the state’s nod was to be the least of Stogel’s worries.
Just days before the meeting with MDFB, the project, which had been in the works for a full year, was made public in a St. Louis Business Journal article and created an immediate rumble because it called for the demolition of the 102–year-old Century building.
In the months to follow, that rumble would turn into a full-fledged brawl between, on one side, the developers and Mayor Francis Slay, who supported the project as a way to develop a blighted area, and on the other side, opponents who deplored the notion of tearing down a historic building for something as mundane as a parking garage.
But on that morning of October 18, 2001, Stogel was guardedly optimistic. He had, after all, already carved out a reputation for himself by creatively crunching numbers and combining complex layers of private and public monies to finance high-ticket projects like the Gateway Mall and the Convention Center Hotel. He had strong political allies including Governor Bob Holden, who was planning to testify in support of the project. More than that, however, Stogel, always meticulously prepared, had already secured a verbal commitment for a multi-million donation from a corporate sponsor -- Southwestern Bell.
Theoretically, SBC would donate to the parking garage project in exchange for a 50 percent tax credit from MDFB. From Stogel’s perspective, it was akin to doubling the company’s investment – financially and civically.
From SBC’s vantage point, the deal could be perceived as a win as well. The company’s St. Louis headquarters bordered the blighted OPO vicinity. The boarded-up buildings and broken windows surrounding the Bell Center left a poor and lasting impression on anyone SBC was trying to impress. The possibility of a 1,000-car parking garage didn’t hurt either, especially for a company with thousands of downtown employees.
SBC’s early commitment was clearly outlined in a memo dated Oct. 14, 2001, from Geisman to Slay—the same memo that outlined the itinerary for the trip to Jefferson City. In the memo, Geisman writes that the MDFB would “… consider approximately $14 million over two or three (years) in transportation and contribution tax credits for the Old Post Office development.”
Further, she writes, the plan is “for the MDFB to acquire properties with funding acquired by Southwestern Bell and tax credits. The state will then proceed to construct the parking garage on the Century site when OPO of the development is finalized and will, with our participation, issue an RFP for the development of the Syndicate.”
Developers and the city, however, were keeping the exact amount of SBC’s corporate donation close to their chest. At that time it was rumored to be close to $10 million, a figure that was later confirmed when the deal was discussed in a MDFB open meeting last summer.
But in recent months, both the developers, the city and SBC have moved from discretional disclosure to information lock-down. In fact, in a controversial project funded with millions in state money, no one is talking about a major component of the financing, not the developers, not SBC and not the city.
“We continue to support the development of a vital downtown area to ensure the region remains economically viable,” said SBC spokeswoman Ann Wedemeyer.
But when asked for specifics like whether that support would translate into a multi-million donation to the OPO project, Wedemeyer said. “We can not comment on that.”
Marie Casey of Casey Communications, spokeswoman for DFC Group and DESCO, also said the developers were unwilling to release the details.
“We are not in a position to comment on who may or may not be contributors until details have been finalized,” Casey said. “We will gladly share that information when we're able to do so.”
The fact that details are still being finalized in a commitment that a year ago appeared to be a done deal is fueling speculation that the corporate donation hook that the project has been hanging on is not as strong as it once was.
In light of recent financial cutback at SBC, it is easy to see why. Last week, the company announced it was laying off 11,000 employees. The layoffs came on the heels of other company cutbacks. A source within the company said in recent months employee health insurance costs have doubled. Other company benefits have been trimmed as well, including company-issued cell phones and free phone service for employees who work at home.
Supporters of the project point out that the money used for the corporate donation would come from a different pot than that of employee benefits and salaries. In light of the layoffs and cost cutting, a multi-million-dollar donation for a parking garage is perceived by many employees as an irresponsible and unreasonable decadence. While many employees had opinions about the project, none were willing to give their names.
“Oh there would be a lot of grumbling,” one employee said. “It’s not even pleasant to think about what it would do for morale.”
Another employee supported the project but protested SBC’s role in the project. “I think we definitely need more parking downtown, but $10 million would cover quite a few salaries. We are in the communications business, not the parking garage business.”
Another employee who also refused to give his name predicted an outcry from the Communication Workers of America. “A lot of the jobs that were cut were union employees,” he said. “If they turn around and fund a $10 million garage. I’m sure the CWA wouldn’t be at all thrilled.”
A CWA spokesperson could not be reached for comment. Opponents of the OPO project are hoping that, in light of SBC being faced with hard economic decisions, the company will think twice about where it invests its corporate donation.
“I think SBC genuinely wants to help downtown,” says Lynn Josse of the Landmarks Association. “But this isn’t a good use of resources. If they want to do something to help downtown, there are much better ways to spend that money.”
Margie Newman, a tenant of the 10th Street Lofts and outspoken opponent of the demolition of the Century, agrees and told new SBC president Cynthia Brinkley as much in a meeting several weeks ago. Since the city and state aren’t listening, Newman, along with several members of Metropolis, Landmarks and the Missouri Coalition for the Environment, hoped an economic recession, coupled with corporate sense, would ultimately be what saves the Century.
Two weeks ago, they met with Brinkley and urged her to think long and hard about the potential negative impact supporting the OPO project could have on the company’s image.
Brinkley was clear that SBC had made no official decision to commit to the OPO project. That stance has Newman questioning how the developers have represented the deal to the state.
“If it is not a done deal, then how come the developers all these months have represented to the state that it is?” Newman asked. “And how come SBC is not screaming that their name is being used before they have made an official decision?”
Since the developers and SBC refused to comment, the public will have to wait for those answers.
In the meantime, Newman and opponents minced no words in their message to SBC. “I guarantee that if you do provide money to the project we will do our best to make sure and let the world know SBC contributed to the destruction of a historic building.”
Blackmail? No, Newman says just simply playing honest hardball like the developers.
“I hope SBC thinks long and hard before they lay $10 million down to destroy a significant block in downtown,” Newman says. “Because if they think that represents revitalization, they have been sadly misled.” ©Pub Def Publishing 2002 |
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