Crystal City forges one hell of a deal.

Jan 16, 2008 at 4:00 am
Mention the town of Crystal City and invariably you'll hear the name Bill Bradley. The NBA Hall of Famer turned U.S. senator from New Jersey grew up here, just a half-hour drive south of St. Louis. Bradley's father worked as a banker and his mother taught Sunday school. It was in Crystal City that Bradley first fell in love with the game of basketball — scoring an improbable 45 points against Owensville High School on a wintry night in 1959. It is also the place where, as Bradley once put it, "the world of possibility and hope all began."

Little wonder then that the lanky senator returned to his roots on a rainy day in September 1999 to announce his candidacy for the 2000 presidential race. Standing outside the Crystal City High School gymnasium, Bradley began his campaign speech by touching on a topic that's now sparked a lightning rod of discord in his hometown.

"Less than a mile from where I'm standing, near the banks of the Mississippi River, there once stood the Pittsburgh Plate Glass Company," Bradley told the throngs of well-wishers who braved the rain showers to see him. "It was there for 100 years. In its heyday, it employed 4,000 people and turned out thousands of tons of glass a year. It seemed that just about everybody in town worked for what we called PPG. We didn't grow corn or wheat here in Crystal City — we made glass."

Bradley ended his trip down memory lane saying, "Today I want to be as clear as that glass about who I am and why I am running for president of the United States."

These days all that remains of the PPG glass factory, which provided Crystal City its namesake, is an empty, 250-acre field just east of the city's historic downtown. Heavily polluted from nearly a century of industrial use, the property looks not unlike the present-day Superfund site of Times Beach, Missouri. Trees and tall grass grow inside a chainlink fence encircling the property. Over the years the site has become something of a nature reserve, attracting hawks, rabbits and other wildlife.

When Jack Ginnever and his girlfriend Sheryl Boss bought their home — a 1920s mansion that once served as Crystal City's hospital — they were under the impression the PPG land that bordered their yard was too contaminated for development. "We heard talk of making it a park," recalls Ginnever, a soft-spoken IT professional who moved to Crystal City in 2004. "Worst-case scenario was that they'd build a prison on the property, but we didn't think that was likely."

Then last August word came that Crystal City officials were in closed-door negotiations to develop a $1 billion iron-ore smelter on the PPG land. The word "smelter" alone was enough to alarm many of the city's 4,200 residents. Four miles north of town is the city of Herculaneum, home to the notorious lead smelter that belongs to the Doe Run Company. In 2002 the state required Doe Run to purchase 160 homes in Herculaneum after health officials found that 56 percent of the children living within a quarter mile of the smelter had elevated blood lead levels.

Crystal City residents feared the same results, and soon news of the Crystal City smelter dominated headlines in the Jefferson County weeklies, the Leader and the News Democrat Journal. The town's city council meetings that usually play host to a half-dozen onlookers now drew hundreds of angry, sign-toting citizens demanding that the project be abandoned. By September 5 the protests grew so intense that Mayor Tom Schilly was forced to schedule a public meeting in the high school auditorium.

So it was that some 400 people crammed into the school where eight years earlier Bill Bradley announced his presidential intentions. But if the mayor thought the meeting would allay resident's fears, he was quickly disappointed, as audience members began to pepper him with worrisome questions about environmental hazards. "What will the long-term effects be from pollution?" inquired one resident. "What about noise?" asked another. "Will the plant operate 24 hours a day?"

A confidentiality agreement inked between the city and the smelter's St. Louis developer, Jim Kennedy, prohibited the mayor from providing any specific details concerning pollution. And Kennedy, who was also in attendance that night, deferred most all environmental inquiries to Leanne Tippet Mosby, a spokeswoman for the Missouri Department of Natural Resources. Mosby's attempts to downplay health concerns — by stressing that iron-ore smelting produces fewer toxins than lead — fell flat after she admitted knowing nothing about the size or scope of the proposed smelter.

"I don't care what type of lipstick you put on this pig, this is still a dirty, nasty thing," grouses Ginnever, who, like many in attendance, left that September meeting with more questions than answers. Chief among them was whether their hometown hero, Bill Bradley, may also be involved in the project.

Shortly after dropping out of the presidential contest, Bradley sold the family home on Taylor Avenue in downtown Crystal City. But the former New York Knicks star still owns a 350-acre tract of land adjacent to the PPG property. E-mails obtained through Sunshine Law requests indicate Bradley is considering the sale of his property, known as Hug's Farm, to Jim Kennedy. The addition of Bradley's land could more than double the size of the proposed smelter.

Bradley, who now works for the New York financial firm Allen & Company, did not respond to numerous interview requests for this story. Nor has he made his intentions known to the hundreds of Crystal City residents who fear their favorite son is quite literally selling out his old hometown. The former senator is just one of the several larger-than-life characters tied directly — or indirectly — to the smelter. The list includes real estate speculators, a Senior Olympics volleyball player, the "Communist Chinese" and even the famous consumer advocate and Hollywood inspiration Erin Brockovich.

"I keep waiting for Michael Moore to show up with his cameras," says Crystal City resident Terry Coleman. "This is Roger & Me in Crystal City. It's the ultimate underdog story."

The frenzy surrounding the Crystal City smelter may never have transpired without the aid of Tom Kerr. A California transplant, Kerr wears Hawaiian-print shirts 365 days a year, making him something of a dead ringer for the Beach Boys' golden-oldies crooner, Mike Love.

Kerr also turns plenty of heads on the road, zipping about Crystal City's winding roads in his improbably small Mercedes-Benz Smart Car. The 53-year-old entrepreneur imports the tiny automobiles from Germany and sells them out of the old Rexall Drug warehouse he owns in north St. Louis. The building also serves as headquarters for Kerr's Fiesta Corporation, which, in addition to selling Smart Cars and exotic steam showers, provides warehousing services.

Last spring Kerr further diversified his business interests when he acquired the old sand mines immediately south of Crystal City. The mines once provided PPG with the silica necessary to make glass, but they've sat unused for decades. Kerr reasons that the constant 62-degree temperature inside the caves makes for a perfect warehouse space. More than that, though, Kerr sees the mines as an international destination and dreams of converting the caves into an enormous underground playground.

"We're talking an Olympic-caliber facility," says Kerr, who grew up playing volleyball on the beaches of San Diego and now travels the nation playing the sport in the Senior Olympics. "Volleyball, badminton, hockey. Everything will all be under one roof."

On a recent winter day, Kerr and his business associate, Jim Duncan, stand outside the mouth of the mines sharing a twelve-pack of Michelob Light. The two have recently installed spotlights on the floor of the caves, and the 400-watt bulbs illuminate a deep antechamber supported by columns of sand and rock as thick as redwood trees. "This is where we're going to have our extreme sports," says Kerr. "Rock-climbing, paintball, motocross."

At 5.5 million square feet, the mine is roughly five times the size of the Saint Louis Galleria. But PPG hit an aquifer during its mining, and much of the caves now lie submerged in water. Far from seeing this as an obstacle, the ever-optimistic Kerr boasts that the water is almost clean enough to drink. "It's been naturally filtered by sand," he notes. "We could bottle it or sell it for irrigation."

Back outside in the blinding light of afternoon, Kerr points out where he'd locate the hotels, a convention center and outdoor amphitheater. Kerr's even gone so far as to draw up architectural sketches of the complex. The only thing keeping his dreams from becoming reality, he says, is the smelter. "You can't have a world-class athletic complex located next door to a smelter," complains Kerr. "It just doesn't make sense."

Kerr says he offered PPG $5.4 million for the site of its old glass factory last summer. When the company failed to respond, Kerr says he offered the same deal to the city. It was only then that Kerr learned Crystal City officials were working behind the scenes to sell the PPG property to Jim Kennedy's Wings Enterprises. A little more digging revealed that Beijing-based Minmetals (a company that operates under the control of the Chinese government) was providing Kennedy a $300 million deed of trust to finance the smelter.

An outraged Kerr fired off postcards last August to every household in Crystal City, warning them of the project. The mailing asked residents to complete a survey on whether they were in favor of Kerr's recreation complex or the smelter. As a gesture of goodwill, Kerr promised to buy everyone who filled out the survey a MooLatte at the local Dairy Queen. The plan almost backfired when the DQ burned to the ground the very day Kerr mailed the postcards.

"I assume the fire was accidental, but the timing was immaculate. It scared the hell out of me," he says. "I thought, 'Who'd I piss off?'"

Even without the lure of frozen confections, Kerr's message hit its mark. The local papers ran with the story and soon the smelter was the talk of the town. "I'm thinking to myself, 'I live in this community and I don't know anything about this,'" says Jill Thomas, a Crystal City resident and business owner who contacted Kerr after learning the news. "If the Chinese are paying to put a smelter in my back yard, shouldn't I know about it?"

In late August, Thomas and a handful of other concerned citizens, including Tom Kerr, gathered at the home of Jack Ginnever to share information about the smelter. A similar meeting a week later drew a crowd of 25 people. By the third week the group was more than 70 people strong and had found a place to meet inside an airplane hangar in nearby Festus. They called themselves Concerned Citizens for Crystal City (C4), and included among their members such dignities as Terry Yesberg, a former Crystal City mayor; and Bill McKenna, a former state senator and president of Jefferson College.

"Everyone had their specialty," recalls Thomas. "Some of us walked door to door informing neighbors. Others examined our legal options, while some of us began searching for any public documents related to the project." E-mails received from the city through Sunshine Law requests revealed the city was in discussion with Kennedy since at least March 2006 — a full eighteen months before news of the smelter first broke.

Soon Jack Ginnever had a Web site ( up and running, with contracts, lease agreements and all other documents making their way onto the Internet. The group filmed city council meetings and posted the video clips online as a way of holding city officials to their word. When the mayor and other council members refused to talk about the smelter, the group went looking for answers elsewhere.

In one memorable clip aired on the C4 Web site, the group travels to Granite City, Illinois, to ask residents what it's like living next to the steel works. The video shows slag piles of iron-ore waste stacked 100 feet high and nearby homes blanketed in fine black soot. When asked to describe the smell of the smelter, an elderly Granite City resident thinks for a moment before replying to the camera: "You ever eat pickled eggs and then drink a lot of beer? Well, it smells worse than them kind of farts."

"I'm not running from anyone," says an embattled Mayor Tom Schilly. "I fear no man."

Still, the mayor can't help but bristle at some of C4's most recent actions. In November the group filed a lawsuit, alleging that the mayor and the city council violated state Sunshine Law in its closed-door meetings with Jim Kennedy. The latest indignity occurred just last month when C4 installed two gigantic billboards on Interstate 55 urging city voters to recall the mayor and six council members who've lent their support to the smelter.

Schilly points out that many C4 members aren't residents of Crystal City, including Tom Kerr, who lives just south of town in unincorporated Jefferson County. "That doesn't mean I don't listen to them. But no matter how you answer their questions you get beat up over it," laments Schilly. "You just can't prevail."

A welder by trade, Schilly leaves home each weekday morning by 5:20 a.m. to get to his job in Dupo, Illinois, by 6 a.m. By late afternoon he's back in Crystal City and ready to clock in at city hall. Prior to becoming mayor 6 years ago, he served on the city council for 16 years. During that stretch Schilly admits that nothing has divided the city — or caused him as much consternation — as the smelter.

"You have to want to do this job," posits Schilly, who earns just $315 a month as Crystal City's top elected official. "But I wouldn't do it if I didn't like it. My rule is this: If you keep the interests of the community in mind, you'll do OK."

Schilly says he followed that same creed when first presented the idea for the smelter. "For years, the number-one thing constituents have asked me about is when are we going to do something with the PPG property," he says. It wasn't until this past May, however, that the Missouri Department of Natural Resources declared that the PPG land — contaminated with arsenic, lead and chromium — was once again safe for non-residential development. "That land was industrial for 100 years," notes Schilly, "and it remains zoned industrial."

Moreover, Schilly believes the smelter will bring much-needed jobs to Crystal City. Like other longtime residents, the mayor remembers when nearly everyone in town worked for PPG. Today most of the town's residents — like the mayor himself — must leave Jefferson County for full-time employment. And if Crystal City wants to continue to provide its residents with the services they've come to expect — leaf pickup and quality streets and water — Schilly says the town needs to increase its general revenue, which collected just over $3 million last year. The smelter, according to Kennedy's data, could add another $500,000 in yearly taxes for the city.

With that in mind, on September 10 Crystal City officials entered into a lease agreement in which the city would purchase the PPG property for $2.2 million and immediately lease the land to Wings Enterprises for the smelter. Schilly says the deal allows the city to take control of 250 acres of prime real estate for nothing, with Wings' lease covering the entire $2.2 million purchase cost. Members of C4 note that the contract will have Wings paying the city less than $100 per acre annually over the course of the 100-year lease.

On October 8, C4 was granted permission to make its case before the city council. Cheered on by more than 100 C4 members who attended the meeting, Jill Thomas questioned why the council did not consider Tom Kerr's substantially more lucrative offer of $5.4 million for the PPG property. Thomas further revealed Kennedy's finances for the project — including the $300 million offer from Minmetals — and presented e-mails from Crystal City building commissioner Bob French that suggested Bill Bradley's property, Hug's Farm, would also be part of the smelter project.

On Wednesday, August 29, 2007, French wrote to Kennedy: "I spoke with Mr. [Peter] VanCleve [Bradley's attorney with St. Louis-based Bryan Cave] yesterday, and told him I would forward to him an e-mail the price for the sale of PPG. This information will be pertinent in the sale of the Hug's Farm site."

In another e-mail unearthed by C4, Bob French attempts to downplay a PPG executive's concerns about the public outcry from the smelter. "Mr. Kerr was on the St. Louis news and in the local paper with what amounts to — my personal opinion — the ramblings of a desperate man," wrote French to PPG's Dick Marks on September 1, 2007. "The meeting on [September 5] will help to alleviate most of the rumors that have most people stirred up. Our strategy is to have the developer (American born and raised) reveal just enough to put the concerned citizens' minds at rest."

When Thomas concluded her half-hour presentation, a thunderous applause from the audience prompted Schilly to pound his gavel and demand order. "This is not a meeting to shut down the smelter," warned Schilly. "This is a public meeting of the city council to conduct city business."

But not everyone on the council felt that way. Minutes after Schilly's admonition, councilwoman Pam Portell made a motion to delay the closing of the PPG property deal for six months. "I'm nervous about this and concerned we made a rush to judgment," she said. "There's a lot that has surfaced. I'm uncomfortable with some of these e-mails. Obviously, there are a lot of citizens who aren't happy about this either."

The meeting ended with the majority of council members voting along with Portell to delay the closing from December 2007 to mid-2008. But the council would soon reverse course following a five-hour, closed-door meeting with developer Jim Kennedy. At its next public meeting on October 22, the council voted to keep the original closing date on the sale of the property. And, in response to Tom Kerr, the council approved a second motion prohibiting the city from considering any other proposals for the PPG property.

"Are you really surprised?" asks a bemused Tom Kerr. "They've alleged from the beginning that I'm the only one against the smelter. They don't care that there are hundreds of other people who don't want this deal. It's good old boy politics. Who is going to stop them?"

Lately, several C4 members question whether the "good old boy" network extends all the way to Jefferson City. "We've been in contact with the attorney general's office from the beginning, and at times we thought they were going to act," says C4's Jill Thomas. "Are they too busy? Or do they not want to get involved because Attorney General Jay Nixon's old law firm is assisting the city in the purchase of the PPG property? I think that's a very relevant question."

The small-town politics don't end there. In December, C4 tried to get a judge in Jefferson County to issue a temporary restraining order against the city that would block the sale of the PPG property. Mayor Schilly's wife works for the Jefferson County Circuit Court, and several judges recused themselves from hearing the plea right away. Now the C4 group is asking the court to assign a judge from outside Jefferson County to hear their lawsuit.

But it's not just the courts that are tied to Crystal City. In September Jill Thomas says several C4 members witnessed Mayor Schilly and other city officials shredding papers in city hall that they believe were related to the smelter deal. When they called the attorney general's office to report the incident, Thomas says they were told to call the Jefferson County sheriff. But Sheriff Oliver "Glenn" Boyer (who is married to Schilly's sister) refused to get involved or send any of his officers to investigate.

"Yes, the mayor is my brother-in-law, and I told them it would be a conflict of interest for me to get involved," concedes Boyer. "But I'm the one who then told them to call the attorney general's office, not vice-versa. That's them bending the truth on that one."

Jim Kennedy wears his dark-brown hair parted boyishly across his forehead Rod Blagojevich style and favors a uniform of khaki shirts and blue jeans. A graduate of Kirkwood High School, Kennedy jokes that his wild behavior as a teenager had him on the "five-year plan." "I was completely out of control," says Kennedy, who would later find discipline in the U.S. Army Special Forces.

"When I got back from the military I went to Meramec [Community College] and then Washington University, and from there a Fulbright scholarship for graduate school," explains the 43-year-old Kennedy. After college Kennedy spent more than a decade working as a securities analyst for his father's Kennedy Capital Management, a Creve Coeur-based financial firm that specializes in managing pensions and foundations for clients such as Washington University and the 3M Company.

In 2000 Kennedy left the family business and purchased a hunting retreat in Bourbon, Missouri, an hour's drive southwest of St. Louis. A year later, Kennedy bought the nearby Pea Ridge iron-ore mine in Sullivan out of bankruptcy. The mine, Kennedy says, is the largest and highest-grade magnetic ore deposit in North America.

"I bought this thinking that maybe in twenty years it would pay off," says Kennedy. "Then in 2005 the price of iron ore increased 70 percent and we began looking at ways to open the mine sooner."

Kennedy believes the vein of metal below his Pea Ridge property contains enough reserves to annually mine 3 million tons of iron ore for 100 years. Once the mine is in operation, Kennedy plans to transport the raw iron ore to Crystal City, where it will be processed into pig iron and loaded onto barges. Kennedy estimates the smelter will eventually cost $1 billion and employ 650 people at wages up to $40 an hour.

And those are just the direct jobs associated with the smelter, posits Kennedy. "The indirect employment — from suppliers to transportation — could be five times that," he says. "This is going to be a tremendous investment in the community. You'd think people would be happy about that." Kennedy pins the source of the opposition squarely on Tom Kerr and what he describes as a tiny but vocal minority. "If I in any way thought the C4 group represented a small amount of Crystal City — even 10 percent — I'd have packed up and left a long time ago," says Kennedy.

Part of the problem, he concedes, is the Chinese investment in the project. Kennedy maintains that the relationship with Minmetals is strictly financial. Minmetals, a Fortune 500 firm, has the resources to provide the financing for the project but will have no ownership in the final project, says Kennedy. Instead, the company will demand a percentage of all iron ore processed at the smelter and sold to U.S. steel mills.

Kennedy takes particular umbrage at what he terms the "race-baiting" and "xenophobia" of people trying to stop the deal. This fall members of C4 contacted the Department of Homeland Security over concerns that the Chinese government would acquire an inland port as a result of the smelter. Kennedy says he's also heard comments about the rumored Middle Eastern ties of his wife, Nina Abboud, who's of Lebanese decent.

"You can't call Homeland Security screaming that the commies are coming," says an indignant Kennedy. "I mean, Red Communist China? Richard Nixon — he hunted commies for a living — he didn't even have a problem with them anymore."

In November, Tom Kerr presented Crystal City officials with more than 200 title exceptions his engineer discovered that could impact the sale of the PPG property. The engineer also identified what Kerr believes is firebrick scattered about the PPG property. Used as insulation in kilns and furnaces, firebrick can be a source of chromium-6 — the highly toxic element made famous in the 2000 film Erin Brockovich that starred Julia Roberts. (In the wake of the firebrick discovery at least two C4 members have sent the real-life Brockovich a letter soliciting her help. Brockovich has yet to respond.)

"This is fear-mongering, plain and simple," replies an exasperated Kennedy. "Tom Kerr is throwing money around like a drunken sailor. It's just a bunch of desperate attempts to derail this."

Kennedy says he's tried to keep the project under wraps out of fear that "speculators" the likes of Tom Kerr would attempt to purchase the PPG property and drive up the price. Yet Kennedy himself has teamed up with perhaps the most notorious real estate speculator in all of St. Louis in Dave Jump, who plans to build a train and barge depot on the PPG property. In the early 2000s Jump earned the reputation as the scourge of downtown St. Louis redevelopment efforts when he gobbled up scores of buildings on Washington Avenue and promptly placed them back on the market for double and triple what he paid. (See Randall Roberts' "Stranglehold," May 4, 2005.)

When the reclusive Jump dared show his face at a city council meeting last month, Jill Thomas and other C4 members assailed him with charges that his true intent is to build a massive ethanol refinery on the PPG property. "My only interest is in the railroads," says a bewildered Jump following the meeting. "Crystal City and the PPG property is the only place in the country where the Union Pacific and Burlington Northern Santa Fe railroads intersect within a few hundred yards of the Mississippi River. I've been interested in that property as a barge and rail hub since the 1970s."

Kennedy, meanwhile, labels Thomas' allegations about an ethanol refinery as just the latest in a series of "absurd and unfounded" notions connected to his project. "It's like the television show CSI meets Beavis and Butt-Head," comments Kennedy. "These people take a half-baked theory and draw a half-baked conclusion."

But if members of C4 can at times come across as a tad paranoid, so too can Kennedy, especially when hinting at the technology he plans to incorporate into the smelter. Kennedy talks of capturing the carbon-dioxide emissions from the plant and feeding it to algae that he will grow in "giant, petri dish-like tanks" on the site. "You end up with a plant that is 40 percent oil," says Kennedy. "You press it and you have diesel fuel."

Other innovations — including ways to greatly reduce his energy consumption and create quality pig iron at a fraction of the cost of other smelters — are too sensitive to reveal at this time. "These are industries that don't like change," says Kennedy. "If they knew what we were doing, they'd spend all kinds of money behind the scenes to stop it."

The sale of the PPG property closed quietly on December 21, with Jim Kennedy's banks wiring Crystal City the requisite $2.2 million needed to acquire the land. Four days earlier the council held its last public meeting of the year. Only about two dozen C4 members bothered to show up for what would be the final, decisive blow to their four-month campaign.

Shortly after the meeting begins the council votes to gather in a final executive session to discuss the sale. As they wait out the closed-door meeting, the C4 members huddle around a Christmas tree that dominates the lobby of city hall. Someone orders a half-dozen Domino's pizzas. Someone else reads an ersatz Christmas poem titled, "'Twas the Night Before Closing."

Before you all close
And tie us up in your mess
Rethink what you've done
And decide what is best!

We'll continue to fight
We're not going away
Good guys always win
When it comes judgment day!

After an hourlong interruption the council ends its closed-door session and once again opens the meeting to the public. In rapid-fire succession the council approves two motions accepting the title to the PPG property and closing on the sale. Mayor Schilly strikes the gavel and the meeting adjourns. Just like that, the "good guys" lost.

Outside city hall, Jack Ginnever and others stand shell-shocked in six inches of snow. Tom Kerr soon arrives from a holiday party wearing one of his trademark Hawaiian shirts — this one with a surfing Santa Claus. "Actually, tonight isn't so bad," Kerr offers. "Before, we were just fighting the city. Now we can open it up to PPG and Wings. They're all involved now."

Buoyed by Kerr's optimism, the C4 group once more launches into talks about its recall effort and pending lawsuit. And for a moment it's almost as if the city council didn't sign off on building a smelter in the middle of town. In the frenzy of excitement, no one mentions a provision to the lease agreement that the council approved a week earlier. Should Concerned Citizens successfully get the courts to void the contract, the city must enter into a new lease agreement with Kennedy or allow him to purchase the PPG property for $1.

A few blocks away from city hall someone recently installed a sign in their front yard greeting visitors to town. The name "Crystal City" is scratched out. The sign reads: "Welcome to Smelterville."

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