What’s happening with the Kansas City airport is astonishing, but not for the reasons you probably think
If you are the type of person who has casually followed this year’s most dramatic local news story — that would be Kansas City’s grueling civic march to build itself a new airport — you could be forgiven for getting the impression that, over the past five days, something very bad has transpired. Something that puts the airport project in peril.
One reason you might have come to this conclusion is because that’s what The Kansas City Star‘s editorial board seems to believe. Here’s how it characterized what happened at last Thursday’s City Council meeting:
“In an astonishing display of arrogance, nine members of the Kansas City Council on Thursday betrayed voters and rejected a negotiated memorandum of understanding with Edgemoor Infrastructure, the company picked to develop a terminal at Kansas City International Airport.”
Or maybe you follow Mayor Sly James on Twitter. He seemed to agree with the Star, saying that same vote put “a stain on this city I’ve worked six-and-a-half years to avoid.” He added: “It’s a bad way to govern and it is a sham of a process when you do this. This was a political maneuver to get what you want, and I don’t play politics with things like this.”
What if there’s another version of this story, though? Something like:
The mayor and the three council members aligned with him on this issue are the ones who are playing politics, the Star’s editorial is aging about as well as a gallon of milk on a hot sidewalk, and the nine council members who supposedly “betrayed” voters in fact made a sensible — even obvious — decision to push back against a suspiciously lopsided contract that would have put the city in a precarious financial position.
Here’s that story.
Back in May — before Kansas City voted to build itself a new airport, and before Edgemoor was selected to build it — the city determined that the complexities of a billion-dollar airport project required more legal firepower than what it had on its staff. So a decision was made to hire outside counsel for airport-related matters.
At the recommendation of Councilman Quinton Lucas, the City Council voted to hire Charles Renner, a lawyer with the local law firm Husch Blackwell. Renner had experience working on large, public-private partnerships similar to what was envisioned for the new KCI. The city also retained the counsel of two attorneys at WilmerHale, a Washington, D.C., law firm.
The Council allocated an enviable $475,000 for the services of Renner and the WilmerHale people.
“That [amount of money] was for representing us on several steps in the process,” says Councilman Scott Wagner, one of two council members (the other was Scott Taylor) who voted in opposition to hiring Renner. “Everything from the RFP [request for proposals], to the selection process, to finally identifying who would build the airport, to negotiating the MOU [memorandum of understanding], to getting the MOU signed.”
A memorandum of understanding, or MOU, is sort of like a letter of intent. On a big, complicated, time-consuming project like the airport, it’s an agreement between two parties — in this case, the city and Edgemoor — that outlines both parties’ responsibilities and lays out a path to final approval of a contract. It’s a good-faith document designed to ensure that everybody begins on the same page.
That’s where we are right now. In September, Edgemoor was selected to build the new airport. In November, voters approved that plan. The next step was to execute this MOU. Following that, the final contract with Edgemoor would be signed.
In other words, Renner has had three handsomely paid months to draw up and negotiate the MOU with Edgemoor. A few weeks ago, he released the fruits of his labor to City Council members.
Concerns about the document surfaced pretty quickly.
“The way it’s currently written, there’s no shared risk between the city and Edgemoor,” says Councilman Kevin McManus. “The MOU shifts all the risk away from Edgemoor. They [Edgemoor] can back out for any reason and walk away from the project, and the city would be on the hook to reimburse them amounts that are uncapped in this MOU.”
Reading the MOU — I’ve spent better afternoons — one gets the sense that either:
1. Renner is a poor negotiator who acceded to any request Edgemoor made.
2. Edgemoor’s lawyers simply wrote this MOU, and all Renner did was send it along to the council for a vote.
Writing on Facebook to explain why he had voted against the MOU, Councilman Lucas said the MOU’s reimbursement agreement “obligates millions in payments to the developer for some questionable costs.”
Those costs include line items such as $45,000 a month for travel, $20,000 a month for the vague category of “consultants,” and $1.1 million over the next nine months to cover Edgemoor’s legal bills. The MOU also puts the mayor and the council at risk of breaking their biggest airport promise to the public: that no tax funds will be used to fund the new KCI. Nowhere in the document is it explicitly explained where the money to reimburse Edgemoor will come from should the deal fall through.
“The doomsday scenario would be, basically, we enter into this MOU, the developer plows all this money into consultants and various services without consideration of the costs, racks up a huge $50 million tab, and then says, ‘Actually we don’t want to build the airport anymore,’” McManus says. “It could be due to financing issues or any reason. The way the agreement is written, they don’t have to show cause to terminate. They only have to have not committed fraud. And we would then have to pay them everything they’d spent the money on. It could be $30 million. It could be $50 million. Again, the total is unknown because there is no cap, and this is an amount we would pay for no airport being built.”
McManus adds that he’d recently received more information on a dinky city lease negotiation — “including what was offered and counter-offered” — than he’d received regarding this billion-dollar MOU.
Says Wagner: “When you look at this list and you don’t know what any of these line items are for, and you’re not getting answers on it, you get what happened on Thursday.”
What happened on Thursday is that nine Council members rejected the MOU. Four voted in favor of it: Sly James, Katheryn Shields, Jolie Justus and Jermaine Reed. That’s the mayor and three people who are probably running to replace him — four individuals with very little will to cast a vote that in any way seems to slow the progress of the popular airport.
Several of the council members who rejected the MOU have stated, either on social media or to The Pitch, that they view last week’s opposition to the MOU as an opening volley in a negotiation with Edgemoor. They didn’t like Edgemoor’s initial offer, so they’re using the power of their votes to get a better deal for the city.
But the mayor and the thought leaders at the Star’s editorial board seem certain something else is going on. Yesterday, the Star published another editorial calling these nine members of the council — a healthy 75 percent majority of the body — a “secret cabal” (!), some of whom want to “embarrass Mayor Sly James” and others of whom “appear determined to sabotage a new terminal.”
In fairness to those who see conspiracy in last Thursday’s vote, there is some funny business going on.
Councilman Lee Barnes, who advocated for giving the contract to AECOM, the firm that ultimately lost out to Edgemoor, has been outspoken about his issues with Edgemoor. Those include a lack of commitment to minority-owned firms and community benefits.
Barnes was not subtle about his long-term goals following last Thursday’s vote. He introduced a resolution to immediately cut off negotiations with Edgemoor and start negotiations with AECOM. (That vote was delayed and will occur this Thursday.)
In other words, Barnes is not among the council members who viewed the no vote on the MOU as a negotiation tactic. He clearly believes that the selection committee erred in choosing Edgemoor, and is trying to engineer a situation whereby AECOM ends up with this billion-dollar contract.
The optics got worse on Monday, when AECOM held a press conference announcing that it was teaming up with local engineering firm Burns and McDonnell (which was the first contender for the airport project) and was ready to take on the airport job should the deal with Edgemoor fall through.
Nobody seems to know right now where this is all headed. The Finance Committee meets Wednesday morning and may take up Renner’s contract. Thursday’s council meeting is sure to be a shit show. Edgemoor might recognize that the council means business and cave to some of its demands on the MOU. It is certainly gross that Burns and McDonnell — a company, it is worth noting, which Mayor James initially tried to award a no-bid contract for the airport — could weasel its way back into this deal despite being rejected by the selection committee months ago.
Whatever happens, though, will not change the fact that the outside counsel the city retained to work on its behalf came back with a contract that gave away the farm, and that nine members of the council expressed responsible skepticism by rejecting it. The real question is how the four people who voted in favor of the MOU could read that document and not have concerns about its financial implications for the city. Another question is why the Star keeps using hysterical words such as “stunning” and “astonishing” to describe Thursday’s vote and its aftermath. We are not witnessing a coup here.
One more thing: Renner has previously done legal work for Edgemoor. He represented the company on a project at the University of Kansas just last year. When Renner was floated as a guy who could provide legal expertise, the selection process had not formally begun, but Edgemoor was known to be a contender for the contract. Some competitors expressed concern about this, but it was ultimately decided that Renner’s history with the company would not amount to a conflict of interest should Edgemoor win the bid.
Now that we have seen the contract Renner negotiated, is it time to revisit those concerns? In an email, I asked Renner about the various ways in which the MOU seems to shift financial responsibilities away from Edgemoor and toward the city. Had his previous work for the company influenced the negotiations? He sent me back a nothingburger.
“I’m proud to be part of a team of professionals both outside and inside City Hall that have worked to put the the City in a strong position to complete a successful procurement and move forward with the airport as recently approved by the voters,” Renner wrote. “Our work on the MOU is not done. But, it represents the efforts, review and input of numerous people focused on serving the best interests of Kansas City.”
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