As the January departure of former USAA Real Estate executive Ed Kelley from the CPS Energy board looms, business leaders have made no secret of their desire to see him replaced by someone with similar financial acumen.
But some have privately expressed frustrations at what they see as a failure by the San Antonio Chamber of Commerce to move quickly in putting forth an applicant who would receive wide support. The chamber is the largest business organization in the city.
Two former chairs for the chamber separately called chamber President Richard Perez to voice displeasure that the chamber had not taken a more active role in recruiting and rallying support for an applicant, sources with knowledge of the calls say.
Since then, a business leader whom the chamber did support, former Haven for Hope CEO Kenny Wilson, who’s also the former president of Bank of America in San Antonio and Austin, has withdrawn from consideration for the board position. Meanwhile, Mayor Ron Nirenberg has been pushing behind the scenes for his own pick, while environmental groups are backing an applicant of their own.
Separately, the San Antonio Hispanic Chamber of Commerce has rallied behind its own applicant and the North San Antonio Chamber of Commerce isn’t planning to weigh in until CPS Energy’s board, which chooses an applicant to forward to the City Council for final approval, narrows the slate.
The lack of cohesion among the chambers underlines a rising concern for some business leaders who feel that the chambers’ influence at City Hall may be waning.
“The business community seems to have been less engaged in policy over the last few years,” said Kelton Morgan, a political consultant in San Antonio who was Nirenberg’s campaign manager in 2017.
Some observers point to an unsuccessful attempt to stop the passage in 2018 of city-mandated paid sick leave, which the chambers opposed (a measure now mired in courts), as well as the lack in recent years of any big projects unifying much of the business community like the chamber-supported Vista Ridge pipeline in 2014.
A time of change at CPS Energy
Stakes in the CPS Energy board of trustees selection process are high. The city-owned utility’s historically low rates, as well as its stability, have long been a powerful beacon for attracting businesses, one reason local business leaders and elected officials are so protective of that stability.
But the utility’s five-member governing board now faces a slew of once-in-a-generation crises. It is embroiled in lawsuits fighting the $1 billion it owes for natural gas used during the February freeze and is plagued by a $110 million shortfall in revenue from past-due bills. After going without a rate increase for seven years, the utility now needs a likely rate increase of more than 10%. It also faces pressure from environmentalists to go greener more quickly. To top it off, CEO Paula Gold-Williams is under fire over allegations of a toxic workplace.
In the absence of a coordinated push by business community leaders to line up behind a single applicant for the CPS Energy board, a prominent preference among some senior executives had emerged in the 11th-hour application of Wilson, a former San Antonio Chamber of Commerce chair himself, who said he threw his hat in the ring at “the last minute” on the encouragement of friends.
Perez called him a “very important candidate.” Former chamber President Joe Krier said Wilson enjoyed “enormous support” in the business community.
But while the chamber had introduced him in a few private meetings, the fledgling effort to rally around him was cut short Wednesday when Wilson decided to step out of the process.
Wilson, 69, said he felt it just wasn’t the right time in his life. “I have a hard time saying no to people I respect greatly, but I respect my family more,” he said.
Though Wilson’s withdrawal has been a source of disappointment for some, other applicants with business experience remain. Among them are Clayton Killinger, a retired former executive at CST Brands and Valero, and David Marne, founder and CEO of Half Priced Real Estate.
Perez floated both at the chamber’s office Thursday afternoon.
“We are spending time, energy and effort on CPS Energy, for sure,” he said. That effort included soliciting and meeting with applicants, talking to the City Council and mayor, as well as seeking to shortlist nominees with the CPS Energy board.
The Hispanic Chamber of Commerce supports its incoming chair, Denise Hernandez, who is also vice president of development at True Flavors Catering. Hispanic chamber President Marina Gonzales said her organization had submitted a letter of support for Hernandez to the mayor and City Council.
The episode could be construed as the latest example of what some former chamber officials and political observers have called the business community’s waning influence. This year’s City Council elections, in which two progressive candidates replaced more moderate council members, are another example.
“I don’t think the business community was as fully involved as they would have liked to have been,” Morgan said. “To some extent it was a lack of candidates, but also the upside-down world we live in.”
A changing of the guard
The victories of Jalen McKee-Rodriguez (D2) and Teri Castillo (D5), both endorsed by the Democratic Socialists of America, have given pause to some in the business community, though many are hesitant to publicly criticize them. Political consultant Laura Barberena said Castillo did not engage with the Hispanic chamber during her campaign, a break from tradition.
The electoral success of those candidates came on the heels of mandated paid sick leave, which the City Council passed in 2018 over strenuous objections and active lobbying from chambers and major business leaders.
Krier, who led the chamber from 1987 to 2007, said the single biggest reason business interests don’t mobilize as a cohesive entity the way they used to is a loss of family-owned businesses, especially those headed by outspoken leaders with personalities as “strong as horseradish.”
He pointed to titans of yesteryear like Tom Frost, Bartell Zachry, and Cliff Morton, who he said weren’t afraid to take risks by staking claims on controversial positions.
Perez said the exit of those often brash figures may be why some perceive the chamber as not wielding the same influence it once did. But he disputes that notion.
“The days of the chamber or the business community having a big press conference, saying that the City Council doesn’t know what they’re doing, that just doesn’t happen anymore,” he said, noting he prefers to take a different approach.
In his view, the work he puts in and the victories his organization scores often happen outside the view of the media. Citing a recent example, he said calls with Nirenberg and Bexar County Judge Nelson Wolff helped put a quick end to proposals that businesses be tasked with checking customers’ temperatures and having those customers fill out forms about COVID-19.
“I didn’t put it in a press release. I didn’t send an email out to our members,” he said, but “that’s just one very simple example of how we’re able to interject.”
The Vista Ridge pipeline was approved in 2014 with the San Antonio chamber playing a lead role in helping push past controversy about the pipeline’s cost. But victories in more recent years often take the form of defense against local regulations the business community sees as harmful. Chamber influence helped relax standards in the city’s Climate Action and Adaptation Plan and thwarted a labor peace agreement at the San Antonio International Airport.
The pandemic has also not been kind to local chambers of commerce and other business groups that focus on in-person meetings. The San Antonio Chamber of Commerce’s membership has dipped since the pandemic began, dropping to around 1,750 from 2,100, Perez said. And though Perez met last month with former chairs for a lunch, during which the CPS Energy vacancy was discussed, many of those meetings haven’t happened because of the pandemic.
If that had an effect on the chambers’ strength to shepherd applicants and rally support for them, it might end up playing a critical role.
As Krier said, “In the absence of a strong business candidate, the odds are the mayor is going to have the heaviest oar in the water.”