Council asks for investigations of Stenger’s county leases


County Executive Steve Stenger, second from left, listens to Rep. Bob Burns, D-Affton, address the council last year, left to right: 5th District Councilman Pat Dolan, D-Richmond Heights, Chairman Sam Page, D-Creve Coeur, 1st District Councilwoman Hazel Erby and 4th District Councilwoman Rochelle Walton Gray, D-Black Jack. Photo by Gloria Lloyd.

By Gloria Lloyd
News Editor

The majority of the County Council recommended last week that the full council consider  asking for federal and state investigations into the county’s leases for a North County Government Center at the former Northwest Plaza mall.

The move targeting County Executive Steve Stenger comes a little more than a month before the Aug. 7 primary election in which Stenger faces Democratic opponent Mark Mantovani, who has gotten public support from some members of the council.

The report recommends that the U.S. Attorney’s office and the Missouri attorney general’s office look into links from Stenger’s campaign contributions to the lease, which the council approved in July 2016. The owners of Northwest Plaza, brothers Robert and David Glarner, are Stenger’s largest campaign donors with a total of at least $365,000 to his campaign so far. They also donated to other members of the council.

“There’s no fat in it,” 6th District Councilman Ernie Trakas, R-Oakville, said of the 28-page report. “It’s a simple, quite frankly, indictment of the county executive and what went on at Northwest Plaza…. I’d be surprised if both organizations did not open investigations.”

The timing is a coincidence, said Trakas, who wrote the report of the council Ethics Committee that concludes with the recommendations for state and federal authorities to launch investigations into the 20-year, $69 million lease for more than 100,000 square feet of space in the former Northwest Plaza in St. Ann, now called The Crossings at Northwest. It’s the natural finish to a series of hearings that started in February, he said.

Each member on the Ethics Committee — Trakas, council Chairman Sam Page, D-Creve Coeur, 1st District Councilwoman Hazel Erby, D-University City, and 7th District Councilman Mark Harder, R-Ballwin — has tangled with Stenger at one point or another. Trakas has accused Stenger of being the mastermind behind a recall effort and a court case that could throw Trakas out of office for allegedly violating the county Charter.

And in a statement, Stenger said the requests for investigations are all about the election.

“The council’s report is a baseless, politically motivated August election hit piece,” Stenger said. “The Crossings at Northwest is one of the greatest economic success stories in St. Louis County history. The once-dead Northwest Plaza now supports over 2,800 jobs, over 20 employers and generates $328 million in annual revenue. We are proud of our part in this rebirth. Suffice to say, we are more than happy to have anyone review the matter and confident they will reach the same conclusion.”

The report concludes with a recommendation from the Ethics Committee to the council to request state and federal investigations into the leases, to take the unprecedented action of possibly terminating the lease because a public employee allegedly benefited from it, and to adopt campaign-finance restrictions that would prevent  the appearance of impropriety that the council sees with the Glarner donations and The Crossings lease.

The committee also recommends that final drafts of leases should go back to the council for final approval before they’re signed. As legislation is currently drafted at the council, the council gives the county executive final authority to negotiate and sign leases.

The council was going to take up the issue at its meeting Tuesday night — after the Call went to press. That’s also when Trakas said that all 7,000 pages of documents the committee examined should go online on some type of portal on the county website.

The final committee report is 28 pages long. Trakas said he drafted a report that started at seven pages, but other members kept adding to the report. The plan was originally to continue holding hearings, but council members felt they hit a wall as far as obtaining public records. Documents from the key players during the months the lease was actually negotiated were withheld from the council due to attorney-client privilege, according to the report.

The council hit the brick wall investigating what Trakas calls the “most onerous document I have ever read,” a lease for space at The Crossings that locks the county into rent payments for two decades with virtually no way to get out of it.

Besides the rent itself, which the committee sees as above the market rate, the lease is on the “high end” of a triple-net lease, according to the report. Those provisions in the lease put the county on the hook for insurance and property taxes incurred by the developer, even though the county doesn’t own the property. The county can renew the lease after 20 years for a guaranteed price hike of 3 percent. If the council refuses to appropriate money for rent for any of the office spaces moved to The Crossings, the Glarners can force the county to leave, but those offices cannot open anywhere else in the county according to a stipulation in the contract.

That is what the report calls a “death penalty” for key county functions like the Board of Election Commissioners, the satellite assessor’s office and Workforce Development, which hosts the Missouri Jobs Center.

The county released from any type of liability both the half dozen LLCs that signed the lease with the county, such as Specklebelly LLC, and also dozens more LLCs owned by the Glarners, Trakas said.

“We took it as far as we can, and we believe there is more to be uncovered,” Trakas said of the council. “We don’t have investigators at our disposal. We don’t even have a lawyer.”

The lease was negotiated by a Stenger appointee, Anthony Badino, who is no longer employed by the county and served as Stenger’s campaign manager when he was elected in 2014. A $21,000 payment that Stenger said was a delayed payment from his campaign came through to then-county employee Badino just as he started negotiating the lease, according to the report.

The council sought drafts of the lease from the county’s attorney who negotiated it with the developer, Deputy County Counselor Bob Grant, who is now retired. But the county declined to provide the council documnets from Grant and Badino, citing attorney-client privilege. Stenger countered that the committee was provided thousands of pages of documents.

“No documents were withheld with the exception of privileged work product,” Stenger said. “All county employees asked to testify did so. Our administration cooperated fully and produced thousands of pages of documents requested by the committee. We are more than happy to have anyone review this transaction.”

But Trakas said an outside analysis referred to by Stenger in a July 2016 radio interview was never produced.

“No, no document ever — and we asked for it directly a number of times — was ever produced,” Trakas said. “We hardly consider the Economic Development Partnership an outside, independent analysis.”