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Wrecking Crew

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The city's assault against Heller and McGowan crossed state lines and involved players who are no longer part of the St. Louis establishment, sources say.

The former president of the St. Louis Convention and Visitors Commission, Bob Bedell, recently took a similar post in Indianapolis, which happens to be the headquarters of Mansur Real Estate Services Inc., a partner with Heller and McGowan in their plan for the Century.

Sources say Bedell, who couldn't be reached for comment and didn't start his new job until last week, was busy playing St. Louis politics from two states away. They say he was asked to go over the head of Bob Bates, Mansur's director of historic development, and deliver this message to his corporate superiors: Your company's name is being sullied by this deal, and it would be in your best interest to back off.

Heller and McGowan also got hit with a media blitz.

In a March 1 St. Louis Business Journal story, Geisman questioned Heller's ability to redevelop the old City Hospital site. Heller was selected as developer of the site in 1999, but the city has been slow to sign an agreement on this plan. The deal includes lots of residential and retail space, and Mansur was supposed to be a key player.

In the Business Journal article, Geisman says: "We're taking a real hard look at that situation. When somebody wants to take on a major development, we want to look at what else they've got on their plate and how they're doing with it."

This thinly veiled public threat coincided with two events: Heller and McGowan's release of the preliminary financial numbers for their alternative plan and the pitch of that plan to a legislative committee. Stogel and Gwen Knight, president of DESCO, the other development outfit working on the mayor's preferred plan, also attended this hearing.

Geisman says the city can't turn back. Stogel's and Knight's companies have already spent $750,000 in architectural studies, parking assessments and renderings of what has been described as a "really beautiful garage." Plus, the mayor's reputation is at stake.

"How credible would the city be if we shifted gears and courted every developer with an 11th-hour plan?" Geisman asks. "A plan was on the table, and we were keeping our word and going with that."

Although no one expected the developers to have a big group hug and start working toward the betterment of downtown, McGowan and Heller's abrupt capitulation came as a shock. In a March 9 press release, the two developers announced that they were spiking their plan, citing four economic reasons for doing so, including the high cost of removing asbestos from the Century and a failure to meet the requirements for federal and state tax credits.

But a shovelful of humble pie was also served up in the release:

"It is our conclusion that our proposal is not consistent with the wider public purpose articulated by Mayor Francis Slay of revitalizing all of the Old Post Office Square.... We have always supported, without reservation, the plan for the Old Post Office proposed by DESCO and DFC."

The last line reads like a confession secured at gunpoint: "We make these endorsements without asking for, or being offered, any concessions from DESCO/DFC, the City of St. Louis, or any other entity or person on any other project."

A payoff to make Heller and McGowan go away was never discussed, sources say, and the point of the press release was total capitulation, not concession.

Truth is, sources say, Heller and McGowan didn't even write the press release that bears their names -- it was a collaborative work by Stogel, Geisman, Tom Reeves of Downtown Now! and Richard Callow, a public-relations consultant who swims in all sorts of political ponds.

Callow, who is Geisman's live-in boyfriend, says he was merely keeping an eye on the interests of his client Downtown Now! But sources say it was Callow who insisted on the most humiliating language of the release signed by Heller and McGowan.

Stogel seems anxious to put distance between himself and the public flogging.

"Richard Callow did do a draft a version of the press release," Stogel says. "DESCO/DFC then released our own press release."

Sources say the joint release by Stogel's and Knight's companies was meant to ease the sting of the document Heller and McGowan were forced to sign.

"Nobody had any desire to make this a humiliating experience," says Marie Casey, the public-relations spokeswoman for DESCO/DFC.

Conciliation and cooperation was hardly the tone of Slay's own press release on the matter. It was another public whack: "I now expect Mr. Heller and Mr. McGowan to put at least as much energy into supporting the City's program of downtown revitalization as they have put into delaying it."

The mystery of how a developer can force a rival to sign a humiliating press release is revealed in conversations that took place among Knight, Stogel and Zack Boyers, the director of the Community Development Corp. wing of Firstar Bank.

Firstar, recently renamed U.S. Bank, was in a unique position. All of the players in this downtown firefight are customers, including DESCO, which is owned by the Schnuck family, the folks with all those grocery stores.

These talks started soon after the Missouri Development Finance Board reviewed Heller and McGowan's proposal and sent a March 6 memo asking some hard questions about their funding.

Bob Miserez, executive director of MDFB, says the state agency was merely doing its job and never got a response from Heller and McGowan.

Boyers stresses that Firstar would never choose one customer over another. He says he only got involved because he wanted to see a quick resolution to the conflict:

"We thought it would be best for the development community to work together. Given our relationship with all the parties, we hoped we could be of some help."

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