Despite AECOM shotgun wedding to Burns & McDonnell, KC Council won’t dump Edgemoor yet

The Kansas City Council, which last Thursday came close to dropping Edgemoor as its developer of a new single terminal at KCI, signaled Monday it was not ready to jump on board with a new partnership between AECOM and Burns & McDonnell.

“Any talk at this time about moving on from the (memorandum of understanding) with Edgemoor is premature,” Kansas City Councilman Jermaine Reed said in an email.

“There’s no need for anyone —whether it be Burns & McDonnell or AECOM — to mount a public campaign for the project until our negotiations with Edgemoor are completely resolved.”

Scott Wagner, mayor pro tem who has criticized the city’s proposed deal with Edgemoor, said there were still talks to be had.

“From my standpoint, we still have a group (Edgemoor) that we have not ended our discussion with,” Wagner said. “You’ve got to play out the discussion with No. 1.”

On Monday morning, The Star first reported that AECOM had worked out a deal with Burns & McDonnell to become part of KCI Partnership, the runner-up firm to Edgemoor in last summer’s procurement competition for the $1 billion KCI project.

A press conference at AECOM’s Kansas City headquarters confirmed the deal.

“We asked Burns & McDonnell to join the KCI Partnership and they have accepted,” said Michael Handelman, senior vice president of AECOM.

The scene of executives from both companies pledging their cooperation in an AECOM boardroom would have been unthinkable just a few months ago. Both companies lobbed rhetorical barbs at one another, operating under the belief that they were the main competitors to land the KCI contract before Edgemoor Infrastructure & Real Estate won the deal.

But the companies said they looked forward to working together.

“We have no worries that we can’t be great partners together,” said Ron Coker, senior vice president of Burns & McDonnell.

Monday’s announcement came days after a super-majority of the Kansas City Council voted to reject a proposed memorandum of understanding with Edgemoor.

Council members opposed to the MOU said they had concerns about the absence of a detailed financial framework for the project, a provision to pay Edgemoor and its partners up to $30 million in out-of-pocket costs if Edgemoor can’t close the deal, and insufficient commitments to minority hiring and community benefits.

Labor groups, including the St. Louis-Kansas City Carpenters’ Regional Council, have also criticized Edgemoor, saying negotiations with the frim have been unsatisfactory.

The council is expected to debate a separate resolution this week that calls for the end of talks with Edgemoor and to move on with negotiations with KCI Partnership.

“We just want to be well prepared for the eventuality,” Handelman of KCI Partnership said Monday.

Geoffrey Stricker, managing director of Edgemoor, said Monday his team had negotiated the MOU with the city in good faith:

“We incorporated every change requested by these representatives during the negotiations. At this moment, we are focused on understanding the additional concerns recently brought forward by the City Council. We are confident we can address these matters and find a path forward to provide the best deal for Kansas City.”

KCI Partnership sought to seize on those apparent weaknesses in Edgemoor’s proposal. It said it would offer the following:

▪ 30 percent to 33 percent of the value of construction and professional services contracts to minority-owned businesses,

▪ $15 million in community benefits, which is generally referred to as job training, workforce transportation, child care and other services to help disadvantaged communities participate in the project,

▪ Payments to contractors within five days,

▪ $75 million to what it’s calling a Legacy Fund to provide capital to minority- and women-owned businesses.

Edgemoor had committed giving 35 percent of the value of the KCI contract to minority- and women-owned businesses: 20 percent for minority-owned firms and 15 percent for women-owned companies. It pledged to pay contractors in 14 days. It also had a community benefits package valued at $10 million.

Mayor Sly James’ office said Monday that voters overwhelmingly approved a new KCI single terminal on Nov. 7 — after the city council had chosen Edgemoor.

“We shouldn’t pretend that didn’t happen,” James chief of staff Joni Wickham said in an email. “As a city that values good faith negotiations, we owe it to the winning bidder to work to find an agreement that all sides can support. That work is not done and we ought to get back to it until it’s finished.”

Wickham’s comments were more measured than ones James offered in an interview on Friday, when he lambasted council members for turning down the Edgemoor MOU.

“You can’t lead people you can’t trust,” James said. “And if you can’t trust them, you can’t rely on what they say.”

Councilwoman Katheryn Shields agreed with James about continuing to work with Edgemoor.

“We shouldn’t be engaging in a bait and switch with the voters,” Shields said.

Shields said adding Burns & McDonnell to the mix of proposals at this point “creates more confusion. They were a separate bidder. AECOM didn’t include them. It doesn’t sound like that’s the same product they presented to the city to judge them on back in September.”

Shields recalled that at one point in this summer’s procurement process, AECOM accused Burns & McDonnell of changing its bid, and Burns & McDonnell was subsequently disqualified from consideration.

“Isn’t this AECOM changing their bid?” Shields wondered.

KCI Partnership said it was merely “strengthening” its commitments from July and August by adding Burns & McDonnell.

“KCI Partnership provided a very robust plan from the beginning,” Handelman said in a statement. “Today, we simply highlighted key elements of that proposal.”

Councilwoman Alissia Canady said she and the others in the nine-vote majority that rejected the Edgemoor MOU last Thursday were pushing for the best deal possible for the voters and the city.

“We made some very bold commitments to the voters of Kansas City, and as a result they overwhelmingly supported our ability to build it,” Canady said. “Any agreement we enter into has to have details to allow us to deliver on those promises.”

Several council members said Edgemoor had reached out to them to try to address any concerns. Councilman Quinton Lucas said he met with Edgemoor for two hours on Monday, and he believes Edgemoor sincerely wants to fix unresolved issues.

“Right now, there are a number of us who want to make sure we get the MOU right. We’re going to work our hardest to do that,” Lucas said, adding that he hopes a solid agreement can emerge soon to halt the infighting on the council.

“I hope that before Christmas we can tell the public the path we’re going and not have the soap opera,” he said.

The council has a work session Tuesday where it may hammer out the concerns that Edgemoor needs to address. A council committee on Wednesday will consider ongoing payments to the Husch Blackwell law firm, which has been representing the city’s interests in the negotiations with Edgemoor.

Then on Thursday, the council’s Airport Committee will consider a resolution that would terminate negotiations with Edgemoor, although based on Monday’s comments it doesn’t appear a majority on the council wants to go in that direction at this time.

This story was originally published December 18, 2017 at 5:00 PM with the headline "Despite AECOM shotgun wedding to Burns & McDonnell, KC Council won’t dump Edgemoor yet."