Smoke and Numbers

In the Century Building scrap, everybody's deal is shaky, even the mayor's

Mayor Francis Slay and his band of shrouded intimidators need fresh schooling on a hard rule of political physics known as the Law of Inverse Rhetorical Hypocrisy.

This ancient rule holds that the staying power of the fibs and slanted numbers a politician aims at an enemy depends on the strength of the misleading statements and fuzzy math used to defend his own position.

Seems perfect for the fat bill of particulars rolled out by Frankie the Saint and his seconds to justify the bloody garroting of upstart developers Craig Heller and Kevin McGowan, just for having the brass to roll out a rival plan that shows the Century Building doesn't have to be torn down to provide a garage for the restoration of the Old Post Office building.

The topline of this sorry bit of bullying is familiar to regular Speedloader readers. In late March, Heller and McGowan had a fiscal .44 Magnum cocked and pointed at their brainpans: Bury this plan of yours to save the Century and Syndicate Trust buildings, or we'll run you out of business in a year's time.

To save their skins, Heller and McGowan had to sign a press release flying the banner of their partnership but written by Richard Callow, the mayor's favorite poison-pen publicist, and Steve Stogel, lead developer of the mayor's favored plan for the Old Post Office.

This was one nasty piece of crow.

In essence, Heller and McGowan had to publicly proclaim they were a couple of headless chickens who knew absolutely nothing about putting together the complex business deals both of them do for a living. The boys -- and their reputable partner, Robert Bates of Mansur Real Estate Services of Indianapolis -- were forced to admit they made a $20 million miscalculation in their plan, even though they didn't believe they goofed and the admission put a serious smear on their business acumen.

More on this damnable document in just a bit.

First, a return to the realm of political physics.

A subset of the Law of Inverse Rhetorical Hypocrisy says the following:

When you take this much trouble to call the other guy's plan a shaky bit of financial claptrap, you better make damn sure your own $73 million blueprint sits on much firmer ground.

The Slay-and-Stogel plan doesn't.

As currently concocted by the wizard of byzantine public-private financial structures, the Old Post Office plan relies on a complex three-tiered ownership-and-leasing arrangement that must pass review by a bevy of state lawyers and tax experts and survive the unblinking gaze of a far higher authority -- the Internal Revenue Service.

In essence, this plan aims to let the state take advantage of its own historic tax credits -- a rude distortion of a program designed to lure private developers into the grand game of restoring historically significant downtown buildings.

"They accuse the other guys of having a shaky deal, but this thing is just as full of holes and may be illegal," says a major player in the downtown-development game. "Compared to that other deal, this is a house of cards."

That's the ugly truth about all of these downtown-renovation deals, particularly those of the publicly financed white-elephant variety -- they're damn complex and damn fragile, and they push the letter of the law to the max.

These rickety structures are also wide open to politically motivated shots and gotchas from anybody with a calculator and an accounting degree. The torpedo fired at the Heller-McGowan plan in a March 6 letter from Robert Miserez, executive director of the Missouri Development Finance Board, serves as proof of how easy this is.

Miserez's missive slams the trio's financial package as a doughnut with a $20 million hole in it. His letter flatly asserts that they wouldn't qualify for state tax credits for transportation and brownfield abatement, a fancy word for the removal of asbestos, lead paint and other hazardous materials.

"Based upon the above questions and substantial financing gaps I cannot find any basis to continue to consider this proposal financially viable, or even credible," he writes.

A mighty blast.

But Miserez is hardly an honest umpire, calling 'em as he sees 'em. He's head honcho of an agency where Stogel enjoys a hearty mortal lock. The degree of Miserez's politically indentured servitude is clearly underscored in two memos Stogel faxed to him March 4, secured in a Missouri Sunshine Law request by the Riverfront Times.In both memos, Stogel dissects the Heller-McGowan-Bates proposal. He points out several avenues of attack Miserez used in his March 6 letter, including assertions of a miscalculated interest rate, a mistaken assumption about transportation tax credits, a loan structure that doesn't meet HUD requirements and a lowball estimate of so-called soft costs such as legal and architectural fees.

"It is clear to me that the numbers also don't work for the following reasons," Stogel writes in one memo, which was copied to members of the Schnuck grocery-store family who are his development partners and Barbara Geisman, deputy mayor for development and Callow's live-in girlfriend.

Callow's client in this firefight, Downtown Now! executive director Tom Reeves, was also copied. This lengthy list of cc's calls into serious question Slay's loud and oft-repeated denial of knowing anything about the garroting of Heller and McGowan.

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