Mayor Sly James takes off the gloves on new KCI single terminal
Mayor Sly James on Friday vented about the Kansas City Council’s rejection of a proposed agreement with the would-be developer of a new KCI terminal, suggesting that the politicking that led to it meant he could no longer trust members of the council.
“That seems like an ambush and I’m not going to be nice about it,” James said during an interview with The Star at Union Station.
“It was a bad political move that puts a stain on this city I’ve worked six-and-a-half years to avoid. It’s a bad way to govern and it is a sham of a process when you do this.”
James and three other council members — Jolie Justus, Jermaine Reed and Katheryn Shields — were outmaneuvered Thursday evening by a veto-proof majority of council members.
Those council members felt that a memorandum of understanding between the city and Edgemoor Infrastructure & Real Estate was slim on details and hefty in potential financial liability to the city if the firm walks away from the deal. By a 9-4 vote, the agreement was tossed overboard.
When asked if the vote was the result of a failure in leadership on his part, James deflected the blame to the council.
“You can’t lead people you can’t trust. And if you can’t trust them, you can’t rely on what they say,” James said as he issued a fierce broadside against the council. “You can’t lead people who sneak.”
Council members who rejected the deal said they weren’t playing politics, but instead were looking to get a better deal.
“I would rather have the hue and cry before we knock down a terminal than when we’re in the project,” said Scott Wagner, mayor pro tem and often a James ally. “That’s where the due diligence up front comes in.”
Councilman Lee Barnes on Thursday, after casting the agreement aside, introduced a measure to call off further negotiations with Edgemoor. James on Friday assigned that resolution to the Airport Committee, which is expected to debate it next week.
Mindful of the possibility that Edgemoor’s days on the $1 billion project could be numbered, AECOM, the lead company in KCI Partnership, said on Friday it’s ready to work on the project.
KCI Partnership was the runner-up in the KCI procurement process that ended with Edgemoor earning the rights to negotiate a contract with the city.
“There is no time for delay,” read a KCI Partnership statement. “We anxiously await the next steps required by the City Council to advance this project expeditiously.”
Geoffrey Stricker, managing principal of Edgemoor, said he’s continuing to work with city officials to get the deal back on track.
“We think it’s fixable,” Stricker said. “On all our projects issues arise, issues come up and we move through them....We’re outreaching to the mayor and the council and all the major stakeholders.”
Edgemoor’s problems go beyond the City Council. Labor and black community leaders voiced their misgivings about the firm’s commitments.
Contractors are usually required to award some percentage of the value of municipal construction contracts to companies owned by minorities or women, which are referred to as MBEs and WBEs.
Edgemoor has said it would look to award 35 percent of the KCI terminal construction work to such companies.
Kevin O’Neill, publisher of the KC Labor Beacon, said Friday that unions have grown tired of Edgemoor’s procrastination and its insistence on relaxed terms on MBE and WBE participation.
“I think the largest problem was they wanted carve-outs for all the MBE and WBE,” said O’Neill, who is running for city council in 2019. “They were always afraid (Edgemoor) couldn’t reach those numbers. (Edgemoor) said, ‘We want to make this an all-union job, but we don’t want WBEs and MBEs part of the unions.’”
Stricker acknowledged that Edgemoor wanted latitude to use non-union MBE and WBE firms.
“We think we need to have that as a tool in order to potentially meet our goals,” Stricker said. “If we can make them with labor, great. If we can’t, we wanted the ability to go outside the labor harmony agreement.”
But leaders in the black community said that’s not enough. Clinton Adams, a lawyer and black community activist, said Edgemoor’s should commit to a minimum of 30 percent MBE participation, while aspiring to 40 percent.
“You have a billion dollar project, the largest capital improvement project of this generation,” Adams said. “You might not get 40 percent, but it certainly needs to be over 30 percent. The capacity is there.”
Thursday’s vote was a departure from the usual factions that have formed on this council.
Councilwoman Katheryn Shields, who often votes opposite of James, voted Thursday alongside the mayor has half of the four-member minority.
James’ allies on the council, including Wagner, Kevin McManus and Dan Fowler, voted against the mayor.
Fowler said the measure needed more time for evaluation.
“I could not vote for the MOU when I just didn’t think it was ready to go yet,” he said. “I think they would’ve been willing to keep talking, and I hope they are.”
Wagner had concerns about a payout provision in case both sides can’t strike a final contract. It would give Edgemoor and its partners up to $30 million for work done between the memorandum of agreement and the end of negotiations on a possible final contract.
“We’re going to take on faith that those issues of vagueness are going to be resolved and in the meantime we are going to accept the risk that they may not be and pay for the work,” Wagner said. “So in my mind we’re moving that risk over to the city and hoping everything works out.”
James said he doubted that due diligence was the real motivation for Thursday’s vote.
“Due diligence means you ask questions and come to conclusions. Where’s the due diligence in this?” James said. Councilman “Lee Barnes has been ranting and raving about Edgemoor and AECOM since day one.”
The city has three options at this point, according to Justus, the chair of the Airport Committee:
▪ The city can tell Edgemoor what council members want out of the agreement and vote based on how the firm responds.
▪ The city can send Edgemoor packing, which is what Barnes’ resolution that sits before the Airport Committee seeks to do.
▪ The city can end the procurement process and start all over again with a call for new proposals.
“I have no appetite whatsoever for that,” Justus said of the re-bidding process.
Justus said Edgemoor has not received a formal list of council concerns, which include vague terms in the memorandum, a lack of financial detail and the insufficient commitment by Edgemoor to minority hiring and service programs. Council members supporting the Edgemoor MOU had said those not pleased with the arrangement had not voiced their concerns ahead of time.
“That is patently false,” said Quinton Lucas, who said council members had made concerns known beforehand. “Councilman Barnes has been mentioning concerns about community benefits agreement since the beginning of the Burns & McDonnell sole source contract and has reiterated those concerns over and over again.”
Lucas and other council members lobbied to have the Barnes resolution, discussed in a committee of the whole, meaning the entire council.
Instead, James referred the matter to the Airport Committee. The committee consists of Reed, James, Justus, Fowler, Lucas and Teresa Loar. Half of those members voted Thursday against rejecting the MOU; if those votes hold, the measure would die in committee.
James signaled his support for Edgemoor.
“This was not an impasse in negotiations,” James said. “There was no reason to have impasse at this point. Edgemoor has not refused to do anything.”
Fowler said he wants to give Edgemoor a chance to address the concerns and salvage the deal, so this council dispute isn’t a big roadblock to the project.
“I’m hopeful it’s a hiccup,” he said.