Party Boy

29 07 2012
Mardi Gras reveller Stacy Hastie and his pals opened their wallets to Mayor Slay and then cleaned up with a windfall in state brownfields tax credits.

by Will Delaney                                                                             

CPA  and environmental clean-up expert Stacy Hastie toasting the good life.

The Facebook photo shows St. Louis businessman Stacy Hastie quaffing a beer at a party. Two bottles of Jagermeister can be seen sitting on the counter in the background along with other liquor and wine. It may not be the most flattering image, but it appears to capture a certain panache of a man who enjoys the full pleasures of life. Other online snapshots show the chairman and chief executive officer of St. Louis-based Environmental Operations Inc. reigning over the Mayor’s Mardi Gras Ball at City Hall in February. He donned a crown and regal robe for that occasion.

Obviously, Hastie knows how to party. He’s been at it a long time. And partying – with the right people – is a way of establishing and maintaining connections in the hazy world where business and politics merge.

Stacy Hastie and St. Louis Mayor Francis Slay: Happy together.

 

For his 40th birthday in 2008, for example, Hastie’s wife threw a bash for him at the posh Four Seasons Hotel. About 200 well-wishers attended the fete, including wine connoisseur  George Grodahl, co-founder of MasterCard; and Thomas Dunne, then-boss of  Fred Weber Inc., the highway construction behemoth. Other guests included St. Louis County Executive Charlie Dooley, and a long list of Hastie’s business associates, including developers Mike Clark, Philip Hulse and Chris Goodson, then-president of the St. Louis Board of Police Commissioners.

In 2004, Hastie attended yet another party, this one a fundraiser for St. Louis Mayor Francis Slay co-hosted by Marty Aboussie, an influential former alderman; and John Steffens, founder of the now-defunct Pyramid Cos. The event, which raised $75,000, was held at Steffens’ newly opened Railway Lofts on Washington Avenue downtown. Other guests included 13th Ward Alderman Fred Wessels, current candidate for city treasurer, and former Police Chief Joe Mokwa.

Clean-up King Stacy Hastie reigning over the 2012 Mayor’s Mardi Gras Ball at St. Louis City Hall: Laissez les bons temps rouler.

Despite his festive public persona, however, many of Hastie’s liaisons are carried out with less pomp. He may seal a deal with a phone call or an intimate tete-a-tete at Harry’s Restaurant & Bar on Market Street. On the other hand, sending the appropriate message may be as simple as opening a checkbook. In the past decade, the clean-up mogul and his business associates have quietly donated huge sums of money to local and state politicians of both major parties, including the last three Missouri governors. The generosity of these corporate honchos has not gone unacknowledged by elected officials in St. Louis and Jefferson City. The reciprocal arrangement often involves the liberal issuance of  tax credits that help finance publicly subsidized projects.

A closer look at just one sweetheart deal illustrates how the redevelopment game is  played.

EOI heavy equipment at the Carondelet Coke site on July 25.

Between 2007 and 2009, Hastie along with two of the above-mentioned party goers – Hulse and Clark – gave a combined total of  $44,775 to Mayor Slay’s campaign fund, according campaign finance disclosures reports filed with the Missouri Ethics Commission.  The payments were funneled as individual, corporate and political action committee contributions. During the same period, the trio coincidentally scored a lucrative deal to clean up and redevelop the chemically contaminated Carondelet Coke site in South St. Louis. The clean up is currently underway. The plan calls for building an industrial park at the site.

From the beginning, the estimated quantity of toxic waste at the defunct coke plant qualified the site for EPA Superfund status, but the Missouri Department of Natural Resources (DNR) decided to handle the remediation through a less-stringent, voluntary clean-up program. After Hastie’s company, Environmental Operations Inc. (EOI), got the nod to remediate the site in 2007, his firm estimated the cost of the clean up at $6.7 million. The St. Louis Development Corp. (SLDC), a city agency, then applied to the Missouri Department of Economic Development for brownfields tax credits to cover the cost.

The initial pitch for redeveloping the location backed the idea of having previous owners of the coke plant pay for the clean up. Under the aegis of Green Street Properties, developers Hulce and Clark assured state economic development officials that the responsible parties were more or less on the hook.

But that’s not what went down.


As reported in the St. Louis Post-Dispatch on July 22,  Laclede Gas Co. and another previous owner, each agreed to pay a little more than $470,000 cash – a far cry from the initial estimated clean-up cost of $6.7 million. Any effort to force the polluters to pay the total cost of the fix had been thwarted because the DNR had opted to use its voluntary clean up program rather than relying on the regulatory clout of the Superfund. This was bad news, but then things got worse.

In an October 2009 EOI press release entitled “Ask the Expert,” Hastie mentions the toxic history of the Carondelet Coke site, essentially apologizing for the polluters’ negligence, and then indirectly referring to the onerous snafu that his company then faced:

” The most critical challenge in an environmental remediation project is to predict accurately the various types, location, depth and quantity of the various pollutants or chemicals before beginning the work and then to accurately budget the cost and the timeline for each detail of the remediation,” Hastie wrote.

That’s exactly what EOI did not do, and Hastie, by this point,  knew it.

Testing belatedly conducted by EOI in August 2009 found higher levels of chemical contamination than expected, specifically benzene and naphthalene, both carcinogens. As a result, the estimated volume of toxic dirt that needed to be hauled away jumped tenfold to 100,000 tons, jacking up the cost of the project by another $5.6 million.

Hastie’s pat answer to this nettlesome problem was to shift the liability to a third-party through a so-called “environmental risk transfer.”  In other words, the  proposal EOI offered the city and state included insurance coverage that would offset any unanticipated costs. But after the discovery of more toxic waste at the Carondelet Coke site, insuring the project became next to impossible. So SLDC subsequently applied and received additional brownfields tax credits from the Department of Economic Development to cover the shortfall.

When Mayor Slay and Missouri Gov. Jay Nixon announced the redevelopment plan at a press conference in September 2009, they touted the project  as a boon to the local economy.

“Today’s announcement means we can clean up the site and put it back to productive use,” Slay said.  “I want to thank Governor Nixon and the Department of Economic Development for their vision and commitment to the people of St. Louis.”

Slay failed to mention the increased cost of the clean up in his prepared remarks even though testing had already determined the presence of ten times more toxic waste than previously estimated. But a hint of the scope of the problem is buried near the end of the governor’s press release: “[W]ork on this project is expected to begin in the next several weeks and the entire clean-up process should take approximately 12 to 36 months.”

Last week,  EOI’s bulldozers were still digging at the site, closing in on three years later.

It is clear that in this case the city and state governments abdicated their oversight duties, deciding instead to entrust EOI with multiple responsibilities, thereby essentially sanctioning regulatory laxity, which allowed EOI to control all aspects of the project, including the bidding. EIO solicited two other bids and then awarded itself the $3.3 million contract.

Perhaps the most unsettling element of this saga is that it is not an anomaly. EOI has used similar formulas in other high-profile, clean-up projects for years, including Busch Stadium and the River City Casino, which is adjacent to the Carondelet Coke site.  All the projects were funded through brownfields tax credits. And there’s no end in sight.  Hastie already has an interest in the next big clean-up project — the shuttered Doe Run lead plant in Herculaneum.

For its part, Laclede made out like a bandit on the Carondelet Coke deal. Due to its undeniable liability, the natural gas provider volunteered  to help bankroll the clean up by buying more than $11 million in tax credits, which gave Laclede a tax break of nearly $1 million.

In another act of cozy private and public sector cooperation, the city and developer Green Street Properties paid Laclede  $765,000 for 12 acres on South Broadway Boulevard next to Carondelet Coke. The purpose of the land purchase was  to make the site a more viable setting for its future use as an industrial park. St. Louis Development Corp. paid  $500,000 of  the total cost of the parcel with funds from a federal grant, according to the Post-Dispatch.

EOI headquarters, 1530 South 2nd Street. Stacy Hastie invested in the building with Mike Clark, who also has a stake in the Carondelet Coke redevelopment site.

As the boondoggle evolved, bundled payments periodically were made to Slay’s campaign coffers:

  • March 31, 2007 – Hastie, Clark and Hulse each donated $2,500.
  • Sept. 28, 2007 – EOI executives Mike Hayo and Matt Robinson each contributed $1,275.
  • Sept. 30, 2008 – HLC Properties (Clark) and Green Street Properties (Clark and Hulce) each donate $5,000.
  • April 17, 2009 – Environmental Contracting Inc. (a sister company to Hastie’s EOI) and SCR Investments  (also owned by Hastie) contribute $5,000 and $7,000, respectively.

Other contributions were made by Clark and Hastie’s spouses and the EOI PAC. In all, 18 contributions were made to Slay’s campaign from various sources involved directly or indirectly in the Carondelet Coke clean up between March 2007 and April 2009.

The $12,000 donated by the two Hastie-controlled companies on April 17, 2009 came within a month of  EOI delivering the news to SLDC that the Carondelet Coke clean up would require an additional $5.6 million to complete.

It’s worth noting that EOI itself did not donate to the mayor’s coffers during this time period.

Advertisements

Actions

Information

6 responses

30 07 2012
vonboeger

“If you want to play you’ve got to pay. I want to play but I ain’t gonna pay. Baby!”* Jimmy would have starved in this environment.

The buck passes here, frequently.

Is there no shame?

*Jim Henry

30 07 2012
Journal of Decomposition

Jimmy Hoffa?

30 07 2012
Journal of Decomposition

… or Jimmy Michaels?

31 07 2012
vonboeger

Any ole regular Jimmy type.

20 08 2012
greysonwinters

You’re website depresses me. LoL

20 08 2012
greysonwinters

Your blog depresses me. There is already enough CRAP to ponder in this town and now you pointing out all the quid pro quo shenanigans happening here? Ugh – I need a drink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s




%d bloggers like this: