Submitted by Lou Goldman
November 24, 2015 6:00 a.m.
Over two years ago 8 Flags Aviation approached the City with a request to lease space for a second FBO at the airport. 8 Flags wanted to go on the north side of the field next to the current FBO where there is existing ramp space, land for a building and available infrastructure. The City wanted 8 Flags to lease on the east side of the airport where there is no access or infrastructure. The negotiations went on for a long time and gave the appearance of the City dragging their heels to allow a second FBO on the airport. The issue was presented to the FAA and the City received a letter from the FAA saying that a private company cannot have a monopoly on the airport and that the City had to deal with 8 Flags.
Now, it gets a little convoluted and the short story is- the City decided they wanted a Welcome Center built at the airport and that it would be a public/private partnership and so a Request For Proposal (RFP) was sent out and awarded to 8 Flags Aviation. The City hired an outside attorney to review the lease agreements with Eight Flags. Now the current FBO is complaining about bid and scoring irregularities in the RFP. The outside attorney was then asked to review the issues raised by the McGills raising the total for attorney’s fees to $8,000.
Should the McGills present a proposal to the City, it will be on leased space on the north and east sides of the airport which includes property that 8 Flags originally wanted to lease.
I just don’t understand why:
- The City didn’t initially lease the unleased part of the ramp and adjacent land on the north side of the airport to 8 Flags. This is where 8 Flags originally wanted to go over two years ago. We would have had an operating FBO making payments to the City without any complications and/or need for an outside attorney.
- The City felt there is a need for a Welcome Center at the airport. All FBO’s have their own Welcome Centers for visiting pilots and passengers. And remember the City built a Welcome Center at the marina, which was not needed and is now a Shrimp Museum.
- The City didn’t follow the recommendation of their own Airport Advisory Committee, which was to have the two FBO’s side by side with a building in between which could be either a Welcome Center or an Operational Building.
- The City would lease land to 8 Flags that is already leased to McGill and that lease is for another two years. This means that 8 Flags can’t use the property that they are leasing for two more years or until the original lease with McGill is over.
- The City feels that there is no more useful life in the McGill building and hanger and that they have to be demolished.
Is this entire issue handled in the best interests of the citizens of Fernandina Beach?
Editor’s Note: Lou Goldman, a native Floridian, moved to Fernandina Beach in 1996 from Daytona Beach. He is an FAA licensed pilot and since 1959 has logged over 3,000 hours of flight time. For 10 years he served on City of Fernandina Beach Airport Advisory Committee.
Good questions, Lou. Confusing situation to me, as well.
Lou,
As you know in what I believe are rhetorical questions, it was all about politics and protection. As has been stated several times in the past, although there is the economic question as to whether there is enough existing/future business at the airport for two FBOs to survive, the FFA has repeatedly stated that such an issue CANNOT be used as a factor to deny an FBO application. Let the two fight it out and the best company will survive.
One point left out is that the infrastructure, fuel tanks, the building, etc. on the parcel leased to 8 Flags was paid for by the McGills, without a penny of tax-payer money. Another point left out is that the McGills were initially told they did not need to submit an RFP because it was for a second FBO. The whole thing is a mess and reeks of conspiracy.
James, I don’t believe the buildings were paid for by McGill as they took over the FBO lease from another party. They did build the new fuel tank farm but they clearly understood that at the end of their lease, all improvements reverted to the City as is a common practice for leasehold improvements.
Dave, you are correct that we took over the lease from another entity. You are incorrect that we did not pay for the building. We satisfied the mortgage that was in default as a condition of assignment of the lease. There are no enterprise funds in either the building or the fuel farm.
Reversion to the airport sponsor is not just common, but way the system works. What is uncommon is for a sponsor to refuse to negotiate a rent for building being reverted and instead electing to bulldoze it because that is the desire of a potential competitor. This building could have continue to provide revenue to the airport fund from a variety of different potential tenants. The City’s current position that the age requires it to be “razed” is disingenuous as that position would require them to also bulldoze most of the hangars on the field to stay consistent with a position that a 20 year old building has out-lived its usefulness.
Sean,
Thanks for the correction. I know that private funds were used for both and not airport enterprise funds.
I think there is a big difference between a hangar that is essentially used for storage and basically a shell and a facility that is occupied by staff and visitors on a daily basis. I understand your point that just because a long-term lease has expired the facilities covered by that lease may still have a fair amount of life left.
This is my opinion only, no facts other than history. The city manager who was recently forced to “retire” was heavily involved in the “dealing” with 8 Flags. This lends much credence to the theory of politics and under the table deals.
Tom, your assertion that Joe had a “cozy” relationship with 8 Flags Aviation couldn’t be further from the truth. Look at the news reports in 2012-13 when 8 Flags Aviation tried to originally locate on the northern side of the airport adjacent to McGill.
To cast such aspersions on someone’s ethical character, even if couched as an “opinion” is not responsible. As both the airport manager and the city manager, Joe was the only one with the authority to negotiate the deal and present it to the City Commission.
Dave, I base my opinion on the many “hearsay” reports of “Joe’s” controversial items during his tenure as a local politician and city manager that I have read in the local news publications since my return home to Fernandina nine years ago as well as discussions with old friends who never left Fernandina.
After reading Mr. McGill’s statements I see no reason to change my opinion. That “Joe” had the authority to negogiate the deal changes nothing; he apparently also thought he had the authority to give away a public access to the beach. While opinions are just that, the pattern of “Joe’s” behavior seems to support mine.
As a non-aviator, non-citizen of Fernandina Beach, I have been asking myself the same questions. How, and more importantly, why did the simple addition of a second FBO evolve into a bidding war for a single FBO lease and building?
Maybe my thinking is too simplistic, but the lure of a “free” welcome center, primarily paid for by the Feds, just couldn’t be passed up by our local politicos.
Is the Nassau County emergency operations center inadequate for Fernandina’s needs? Does two separate emergency operations centers improve emergency response for FB citizens or does it add another layer of complexity (and taxpayer expense) when asking the County for backup services?
Why? A longer list than Lou’s could be made of the airport management blunders on our wonderful public asset, but it would be just as befuddling to try to figure out why the City always seems to stumble on the airport.
I have spent more time than most contemplating the same question because my family’s livelihood is at stake. Then again, the pocketbooks of every local taxpayer are also on the line. We all deserve an answer.
Year after year, millions of dollars flow into airport projects. Since the projects are largely grant funded, they do not get much local scrutiny. The public may not pay a lot of attention, but those in the airport community often question the prioritization & even the wisdom of some projects when so many of the airport’s basic needs starve for attention. The answer is always the same: “We can get a grant. If we do not act now, we will lose the money.” The lure of easy money is the answer. Money drives airport decisions.
“Follow the money.” Remember that saying? Follow the money on the airport, and you will find the answer to the befuddling questions.
A lot of individuals and organizations engrafted to the City make money off airport improvement projects. Those in the decision making chain (City Staff, Airport Advisory Commission, and City Commission) are always won over by the same argument: “We can get a grant. If we do not act now, we will lose the money.” And that argument is made by middlemen with extended palms.
Consider the role of the City’s airport consultant. The City relies on a paid consultant for expert advice on airport matters. The consultant is also the City’s hound for sniffing out grants. That gets us back to the money, and that is where things quickly move into the shadows. Once an airport project is funded, the consultant is re-hired to perform fee-based engineering design services, and then fee-based construction contract management. The consultant also has a “team” of other service providers. None of this is very transparent, but it is a pretty good gig. The consultant gets paid to give independent professional advice, but its advice is always the same: take the money and pay us more. Nice work if you can get it.
This is the airport consultant that led the City into putting development of an airport industrial park, and its locally renowned “road to no where”, ahead of aviation needs. Local funds that might have been used to maintain runways, taxiways, ramps, & lights are used to match dubious grants. Millions spent, years pass, and the airport industrial park remains empty. An attempt to redeem that blunder may partially explain some of the more recent abortive attempts to develop the east-side of the airport, which some might call throwing good money after bad.
This is the airport consultant that led the City into delisting Runway 13/31 as the airport’s primary runway, even though it is the airport’s single most important runway, favored by both prevailing winds and an instrument approach. Why? The answer was to get a grant to resurface another runway that neither the FAA nor FDOT would fund unless it was listed as a primary runway. No one in the decision chain other than the consultant was capable of such a conniving double-play, never mind how it double-crossed the airport’s future. This could well have been the worst City decision in the history of the airport. It was, however, a decision from which the airport consultant and contractors could profit.
This is the airport consultant that led the City into using a so-called ditch & drainage project to sneak in drainage infrastructure for a new aircraft parking ramp on the east-side of the airport, even though developing an east-side terminal had never been vetted in any airport master planning nor on any actual or proposed Airport Layout Plan.
This is the airport consultant that led the City into the Taxiway A project that took 35% of the north-side aircraft parking ramp, contrary to a 1966 airport master plan that would have built the taxiway further south to preserve the much needed aircraft parking space. Again, it was a decision from which the airport consultant profited. The decision to proceed with that project also brought on the airport litigation in which the City ultimately spent over $3.5 million for damages & attorney fees defending the consultant’s bad advice & the City’s bad decision. Most recently, the same airport consultant proposed relocating Taxiway A as indicated in the 1966 plan in order to replace the aircraft ramp his previous advice destroyed. Had that advice been given 15 years ago, the City would still have its $3.5 million.
One thing that I learned from the Taxiway A debacle is that the worst possible place to be standing is between the airport consultant and the City’s money. Unfortunately, once again our business finds itself in just that spot.
This is the airport consultant who has for the last several years relentlessly promoted a Category 5 Hurricane Emergency Operations Center on the airport because a grant is available. Its location was moved around the airport. It was packaged & re-packaged. Its name was changed to “Welcome Center”. Still, the Airport Advisory Commission would not recommend it, and City Commission would not fund it. That was little more than a speed bump for the consultant whose pitch changed to getting an FBO to fund the local share. Both the renewal of our lease and the launch of a new FBO were tabled, as the two companies were pitted against each other in a “winner take all” bidding where the most money would buy an airport fueling monopoly. The “Welcome Center” project will proceed, not because the City needed it nor wanted it, but because the middlemen found a way to fund it with other people’s money. Money. Money. Money.
More money. The “Welcome Center” became only 1/3 of the project cost by adding a large hangar. In another masterful play, when the project was moved from the east-side of the airport to the north-side to save money on infrastructure, the cost of the project actually increased again. Now, it seems the demolition of our fuel farm, hangar, & terminal will be added because it costs even more money to do that than build on available green grass sites. The destruction of our business is just collateral damage in this middleman feeding frenzy, but most important, those engrafted to the City are assured another bloated, fee-driven project.
City Commissions, City Managers, Airport Managers, and Airport Advisory Commissions come and go. For two decades, however, one airport consultant has dominated every decision on the airport, large and small. If you look long enough you will see its financial interest in every decision it recommends. The fox is in charge of the hen house, but do not blame the fox for the control it was given. As long as the City allows any airport consultant to participate in the airport improvement projects that it recommends & controls, that advice will be tainted by self-interest.
Once you realize it is all about money, you might ask if you are getting your money’s worth. You might ask why the City’s permits any consultant to have such blatant conflicts of interest. You might even ask how one consultant manages to span so many administrations. You might ask about compliance with public bidding and the RFP process for such consulting services & airport projects. You might just follow the money and find the answer to every other airport question that may come to mind. Finally, you might just ask if the City should do things just because they can get the money to do them.
In the end, the answer to the airport questions is money. Money explains tainted advice and bad decisions that always profit someone and that constantly get the City into trouble. Common sense management of the airport will never happen without common sense reform of airport financing.
John McGill
McGill Aviation Corporation
Wow.
John,
The relationship between Passero and the City is a long one, but one that I don’t think is unusual in such a specialized area. The contracts that Passero gets for the project management of the work is legitimate and not just pushing paper. The FAA and FLDOT can be very nit-picky with the completion of work before payment of the grant is made and a firm with specialized experience and knowledge is extremely helpful.
The City rejected the “Welcome Center” grant a number of years ago and my recollection is that it was being pushed by the FDOT, not by Passero. In fact, the City paid a fair price for rejecting the grant at somewhat the last minute in terms of difficulty in getting grants for other projects for the next several years.
Yes, some gamesmanship has to be played in the grants business and some of it may not always be to the direct benefit of the airport, but all in all, the grants for runway improvements, navigation systems, obstruction clearing have benefited the airport infrastructure and your business as the FBO.
There could be no more appropriate end for our airport business than Dave Lott’s praise for the City’s airport consultant and assertion that the Airport Improvement Program it runs has benefited our business. This is especially so coming from a former City Manager who joins a chorus of past & present City officials. I have no doubt that they all sincerely believe these long-ago discredited positions. Like all beliefs, these positions enjoy the benefit of not requiring a factual basis.
The facts are that the City spends about $3 on the airport to get $1 in value; that after 8 years of litigation, an Arbitrator made specific factual findings about the airport consultant’s failure to competently perform it duties for the City; and that the net effect of the Airport Improvement Program had been to damage our business in an amount exceeding $700,000. The Arbitrator also found our business had been damaged in other ways that could not be quantified. A Judge subsequently found the City’s behavior justified another $1.3 million in attorney fees for our lawyer. The City also paid its own lawyers about $1.6 million. In sum, the praiseworthy consultant-driven Airport Improvement Program cost the City more than $3.5 million and severely damaged our business. In the real world, any corporate executive or government official entrusted with the fiduciary management of other peoples’ money would have summarily fired anyone involved in creating such a mess.
Fernandina is different. Myths sustained by sincere belief reign in City Hall. At the end of the litigation, the City “spun” a fiction that it “prevailed” in its lawsuits and then started believing it. As recently as last week, the same “expert” airport consultant was part of an effort to make an end-run around the City’s airport manager in order to try to close the airport’s single most important runway during the airport’s single busiest weekend of the year. Fortunately, dozens of rational airport users rose up to quash yet another City Hall idea advanced without a careful consideration of facts. A good airport consultant would have thrown a red flag when approached with the idea; and would have saved everyone a lot of heart-burn, time, & money. That is not, however, how it is in Fantasyland Fernandina; where believing you are getting good advice is more important than actually getting it; where spending equals value; and where being ordered to pay damages for wrongfully forcing a small local business to the brink of bankruptcy is expert City planning of public investment in airport infrastructure that benefits an ungrateful airport tenant.
I am in no way an expert on airports or the FAA, but based on John McGill’s lenghty comment alone, sure looks like more jobs and renewal when Federal money is pursued. Appears to be eternal conflict over who chooses the menu, who eats and who doesn’t, as well as who will bury the bones, if not.
Wow! And, I speak for Libby and me-both of us with years of FAA training and various certifications and as a commercial operator at the airport for many years(helicopter flight instruction and aerial photography).
We have always appreciated the services of McGill Aviation over all of these years. They have been really great for us and served for years as a good ambassador for this wonderful community. I would expect that the majority of locally based pilots feel the same way.
Anyway we don’t understand how or why the McGills have been treated this way by the City, but from our perspective this is no way to treat an organization that has been here for 20 plus years and provided admirable service to the public.