BY MIKE FITZGERALD - News-Democrat
MASCOUTAH -- St. Clair County taxpayers have spent more than $1.6 million between January 2008 and July 2011 on consultant fees, travel and lodging costs, in addition to advertising and marketing expenses -- all to promote the struggling MidAmerica St. Louis Airport.
The county Public Building Commission, which oversees the airport, has spent most of these consultant dollars to promote MidAmerica as an air cargo hub with direct flights to and from China.
So far, county taxpayers are awaiting the first fruits from their investment of time and treasure on the China strategy for the airport, which in 2009 needed a subsidy of nearly $7 million in cash and in-kind costs from the county to keep running.
Rich Sauget Sr., the commission chairman, however, said Friday the money spent on airport consultant fees and related costs will soon pay off with an important announcement regarding the airport in about two weeks.
"Because there's going to be, I feel, there's going to be a very strong situation because all our work will come to fruition very shortly," he said.
Sauget declined to elaborate -- "that information is proprietary" -- but he added that "we are working with some very strong eventual clients, or partners or leasees for our airport."
The consultants who invoiced the highest fees to county taxpayers since 2008 are:
* Larry Taylor, an expert on Japan, Indonesia and other Asian markets, whose St. Louis-based consultancy earned more than $400,000 in fees, travel and lodging expenses;
*Ross Jacobs, of Palatine,who runs Airline Aviation Resources Europe and North America, which billed the county for $267,516 in fees for advising airport officials on how to set up air cargo operations;
* John Chang, Daly City, Calif., a Chinese-American businessman fluent in Mandarin and Cantonese who talks regularly with Chinese business and government officials. Chang has billed the county for $177,219 in fees, travel expenses and other charges.
Sauget acknowledged the difficulty of trying to quantify the consultants' achievements so far.
Sauget, however, emphasized his confidence in Taylor, Chang and other consultants hired by the county to open doors in China.
"We are watching very closely, and these people are the ones we feel are capable of reaching out into the global economy," Sauget said. "And that's their business, that's what they're in to as far as their profession and the industry they work in. And by far they are the best we've seen to do that task."
Sauget said the consultants perform a job important to MidAmerica's future.
"I guarantee you this," he said. "If we weren't using them, if we weren't making this effort, we'd have zero chance of moving this facility."
Taylor, who receives a $10,000 monthly retainer from the county, did not return calls and emails seeking comment. Jacobs declined to comment. Chang, who receives a $9,000 monthly retainer from the county, could not be reached for comment.
Tim Cantwell, the airport director, and Mark Kern, the St. Clair County Board chairman, did not return calls seeking comment.
County Board member Craig Hubbard, R-O'Fallon, questioned the expenditure of $1.6 million on consultant fees for an airport that has lost money every year ever since it opened more than 13 years ago.
"It's a ton of money, a ton of money," Hubbard said. "Right now, we have nothing to show for it. And we keep doing it and doing it."
Other major consultants who have billed the county since 2008 include:
* The Chicago law firm of Holland & Knight, which billed the county $167,700 for advice on real estate issues related to the airport;
* Alec Ang Swee Nam, a Singapore-based consultant, who billed the county $77,360;
* Leonard L. Griggs, the former director of Lambert-St. Louis International Airport, who billed the county $73,132;
* E. Gene Redmon, who runs Young Tiger Consultants, of O'Fallon, received $16,000 in fees in 2009 as consultant for the county to publicize MidAmerica's potential.
Redmon predicted success for the county's China-focused strategy.
"I think the Chinese are feeling a subtle pressure to establish the cross-trade stuff, and rather than limiting it strictly to Chinese airlines, I think they're going to open up and let in some of the other competition in the marketplace," Redmon said. "I sense we're going to be seeing that. I think (MidAmerica) is going to find success within the next year."
'Guanxi'
Americans who've done business in China agree it's a difficult place for Westerners to gain a foothold.
For starters, outsiders trying to gain traction in the intensely competitive world of Chinese business and government must be prepared to invest a huge amount of time, patience and effort in building relationships with the right people.
No deals can take place until trust has been established, which can take a long time by American standards, according to Tom Connell, also known as "Dr. Culture," a Florida-based consultant who advises clients on "cross-cultural communication."
Connell said his No. 1 recommendation to American clients seeking to establish ties in China is this:
"Extend your timeline. It's not going to happen on American time," he said. "And the Chinese know this. They'll delay and delay, and they'll talk about this and talk about that, and won't come to any kind of decision until just before you're getting ready to leave."
What's also critical for Americans to understand is the Chinese word "guanxi," (pronounced gwan-shee), which means a network of relationships based on shared obligations and reciprocal duties that, over time, create a powerful sense of trust.
Everything in China happens within the context of guanxi, according to Gary Kellman, of St. Charles, Mo., who runs a factory in China and serves as consultant to American businesses.
Even if Americans in China were lucky enough to tap into the right network of contacts, "It still is going to take time for them to go to hundreds of dinners and nights out with the right people. It really is gaunxi, and it's who you know," Kellman said. "It does take time. It can take five years, 10 years, and just being patient."
For Americans in China, the key hurdle is to find the decision-maker who can make things happen and advance their cause, according to Yao Huang, a business consultant based in New York City.
Finding that person is extremely tricky, Huang said.
"There may be nice titles and stature, but not getting the decision-maker only leads to long sales cycle that don't amount to much," Huang said. "Additionally, every middle man is interested in a commission or consulting fee for introductions -- this can get pricey."
Navigating the shoals of Chinese business can be tricky even for native-born businessmen, such as John Chang, the Daly City, Calif., man hired by St. Clair County.
In 2010, the county hired Chang to serve as a translator and facilitator, in which capacity he works closely with Taylor, of Aziotics.
In the time sheet for July 2011 that he submitted to the county, Chang reported his efforts to develop an air route between Belleville and Ningbo, a seaport city in northeastern China.
Chang also reported spending three hours on the phone with "Kristy of China," regarding 20 pounds of minced fish sample that got stopped at customs.
In addition, Chang in the report shared his insights on a Chinese businessman named Liu, who was described by Chang as "inexperienced and arrogant, hard to work with" and who "treats his staff rudely and with no patience. ..."
Jim Nations, the commission's vice chairman, defended the county reliance on consultants such as Chang. They have allowed the airport to be "still in the game" in China and "that without their input we wouldn't have been," Nations said.
The county is not targeting Chinese officialdom, Nations said.
"Our targets are the importers and exporters, the companies that will be moving the product themselves," he said. "The folks that we have been targeting from China are those that would be importing and exporting goods. And we rely on them to use their relationships with the Chinese officials."
Nations, however, agreed that it is difficult to document the successes achieved by the consultants until tangible results are ready for announcement.
"You don't get any points for moving the ball up and down the field," he said. "You only get points when you go over the goal line."
The final measure is when exporters and importers either set up shop at the airport or ship goods through it, he said.
"And up until that point you haven't achieved anything," he said.
BY MIKE FITZGERALD - News-Democrat
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