West Newsmagazine 12-4-19

FACEBOOK.COM/WESTNEWSMAGAZINE
WESTNEWSMAGAZINE.COM
December 4, 2019
WEST NEWSMAGAZINE
I 51
LAMBERT AIRPORT, from page 12
liminary application in 2017 and since
then has been taking the required steps
toward a privatization decision.
Why aren’t more airports investigating
privatization? The ACRP Report 66 lists a
number of factors, including:
• The historic pattern of public ownership
of airports and the desire of government
owners to retain control.
• Availability of federal and, in some
cases, state grants and loans to governmental
owners.
• The ability to impose and require airlines
to collect passenger facility charges,
which provide a funding source.
• The exemption from property taxes for
municipal owners.
• Access to low-cost, tax exempt bonds
for financing capital expenditures.
• Constraints possibly imposed in collective
bargaining agreements and contracts
with airlines.
Meanwhile, operations at Lambert have
been on the upswing. As of September,
the operation has recorded 49 consecutive
months of passenger growth.
Passenger numbers reached 1,307,068,
a 3.4% jump from the September 2018
total. Cargo flights also recorded a 9.2%
increase with 130 departures this year
compared with 119 last year.
The growth was due to a new daily
flight for Amazon operated by any one of
three cargo airlines – Atlas Air, ABX or
Air Transport.
Another factor has been the growing
number of connecting passengers.
Through September, the increase in connecting
enplanements has been more than
4%, accounting for a connecting passenger
base of nearly 1.4 million passengers.
“The economy definitely has been stronger
locally, but the biggest factor has been
our relationship with Southwest Airlines,”
Rhonda Hamm-Niebruegge, Lambert’s
director, said. “Starting about five years
ago, we began working with Southwest to
increase the airline’s connecting passenger
volume here. We started in 2015 with
three connections and have increased that
number substantially since then.”
Southwest now accounts for some 60%
of Lambert’s passenger volume, according
to operating reports.
Another favorable trend has been the
reduction in long-term bonded indebtedness.
Lambert’s long-term debt now
stands at just under $600 million. But
with the pay down scheduled over the
next seven years, the amount of revenue
needed annually to service debt will drop
significantly.
Earlier this year, S&P Global Ratings
rewarded the airport by raising its rating
on outstanding revenue bonds to “A”
from “A-”, citing “a very strong management
team that has sufficiently managed
risks to ensure the airport’s steady financial
and operational performance.” Fitch
Ratings made a similar change in October.
With such favorable results, a logical question
is why anyone would want to change
a good thing by steering into the unknown
skies of airport privatization. It’s a question
local attorney Gerald Ortbals has pondered.
Ortbals was chief of staff for former Gov.
Joseph Teasdale, is a former president of the
Bar Association of Metropolitan St. Louis
and is associated with the local Bryan Cave
Leighton Paisner, LLP law firm.
“Privatization is an interesting concept
…as long as it’s done the right way,” Ortbals
said. “But there are some alternatives
that I would hope would be considered,
including a more regional approach in the
decision making.”
Ortbals explained that while the city of
St. Louis owns Lambert, airport revenues
generated from passengers outside the city
have been and still are a much greater percentage
of the whole and that those outside
the city also have an obvious stake in
the privatization issue.
“Yes, restarting the process with regional
involvement would be difficult. But if the
political will was there, it could happen.
And I think the St. Louis region would be
better off because of it,” Ortbals said.
Travelers await departure flights from Terminal 2 at St. Louis Lambert International Airport.
[St. Louis Lambert International Airport photo]
American Airlines plane takes off
NOTABLE PLAYERS, from page 12
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, will provide real estate
advice and community outreach.
Mayer Brown, a global law firm with
one of its major offices in Chicago, 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.
[St. Louis Lambert International Airport photo]
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, has two members
on the advisor team.
Jeff P. Aboussie Regional Strategies,
a former St. Louis airport commissioner.
Aboussie served as executive secretarytreasurer
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.