Mayor Krewson's Update on Airport Privatization Pilot Program (APPP)

Dear Aldermen, Alderwomen, and Airport Commissioners:

I want to take this opportunity to update you on the process being considered for the operation of St. Louis Lambert International Airport. 

Last spring, then-Mayor Francis Slay submitted an application to the Federal Aviation Administration seeking authorization to explore participation in the FAA’s Airport Privatization Pilot Program (APPP). 

While St. Louis Lambert International Airport has improved significantly over the last few years, no one argues that it is as good as we would like it to be. Our leisure and business travelers desire more direct flights to more locations and better and more competitively priced services. Our regional economy needs additional freight transportation. Achieving better airport service is the highest and primary objective of exploring the FAA’s Airport Privatization Pilot Program.

In April 2017 the FAA accepted our preliminary application, which allows us to begin the process.  Pursuing the potential privatization of the airport operation requires significant financial, aviation, legal, and planning expertise of a highly technical nature. 

We must thoughtfully define and outline the terms and conditions under which the City will consider a private operator. 

A multidisciplinary Advisor Team is needed to consult with and assist in defining those terms and conditions, and ultimately in soliciting and evaluating the qualifications and proposals from potential operators.  

To engage a multidisciplinary Advisor Team, the City Counselor issued a request for proposals (an RFP) for professional services in accordance with Ordinance 64102. Today the selection committee consisting of representatives of my office, the Comptroller, the President of the Board of Aldermen, and the City Counselor’s office selected Moelis & Company, LLC, and Grow Missouri, Inc., along with McKenna & Associates, LLC, as our Advisor Team.  

The Advisor Team will work solely on behalf of the City of St. Louis. Their fiduciary responsibility is only to the City of St Louis. In addition to the duties mentioned above, the Advisor Team will evaluate the airport’s existing services and its developable land, air, and cargo capacity, and the team will begin identifying credible firms in the global aviation operation market who may bid on the operation.

 

The following are key provisions of the RFP issued for the Advisor Team that will also be made part of any contract:

(a) no member of the Advisor Team may participate as a consultant, team member, investor, or in any other role with any team that bids to operate the airport when/if we get to that point. 

(b) all costs for services and expenses incurred by the Advisor Team will be borne by the Advisor Team at their sole risk, and will be paid by the City only if, and only when, revenues are available from a final agreement to lease and operate the airport.

 

Full development of the terms and conditions required of any potential operator will be developed in consultation with key stakeholders, elected officials, and the Advisor Team. At this time it is expected that those terms and conditions will include, but are not limited to, safeguards for the traveling public, valuing and retaining our dedicated airport employees, respecting and maintaining collective bargaining agreements, and maintaining the commitment to minority- and women-owned business and employment priorities. 

I look forward to working with the Advisor Team and learning more about how others view St. Louis Lambert International Airport—and how we can improve its operation. We expect the process will attract significant expertise and innovation from the aviation field.  

The Advisor Team contract also will be approved by the Board of Estimate and Apportionment before the team commences its service. 

Deputy City Counselor Michael Garvin and Deputy Mayor for Development Linda Martinez are the leaders of this process and will work closely with the Advisor Team throughout the engagement. They will update elected officials, the Airport Commission, and other interested parties as information becomes available. Feel free to contact them with ideas or questions. We value your input.

In closing, thank you for your interest and participation. Achieving a better airport, more and better service, and an asset that can help drive economic development in our region is the highest priority of this process. 

 

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