Another City of Fernandina Beach Airport lawsuit looms

Submitted by

Suanne Z. Thamm, Reporter – News Analyst

After months of meetings and negotiations, 8 Flags Aviation (8FA) represented by its principal Brian Echard appears to be on the way both to the FAA and the courts to resolve differences with the City over establishing a second fixed base operation (FBO) at the Fernandina Beach Municipal Airport.

In an email, Echard wrote, “As a business owner and Fernandina Beach resident, this is not how I choose to conduct business. The City’s flagrant discrimination against me, and preferential treatment toward the existing FBO (McGill Aviation), leave me with no other choice.”

In his 11-page letter to Bart Vernace, manager of the FAA’s Orlando Airports District Office, Echard alleged “8FA’s application to develop a competing FBO has been effectively denied by the City in violation of the City’s obligations to the FAA, pursuant to the federal airport grant in aid funds that the City has accepted throughout the years.  Pursuant to Part 13 of the Federal Aviation Regulations (“FARs”), this letter serves to initiate an informal discrimination complaint against the City of Fernandina Beach as the Airport sponsor, owner and operator.”

The Law Offices of Paul A. Lange, representing 8FA, filed a litigation hold letter also on January 24 advising the City, “8FA also contemplates exercising its remedies in related litigation within appropriate federal or state courts.  … [W]e respectfully request that the City of Fernandina Beach and the Airport take the steps necessary to identify, segregate and preserve documents and materials … relating to the matters at issue.”  Attached to this notice was an 18-item public information request covering meeting minutes, other documents, and communications between and among City commissioners and charter officers relating to the Airport.

Background

As early as January 2012, 8FA began discussions with the City over operating a new FBO at the Airport.  Under discussion was a site on the north side of the Airport that is in a designated aeronautical development area which is vacant land and available for lease.  The proposed site contains federally funded basic infrastructure, including a large apron that is not currently being used.

In June 2012, Echard began meeting with newly appointed Fernandina Beach City manager Joe Gerrity.  In his letter to the FAA Echard characterized Gerrity as “reluctant” to encourage 8FA’s development of a new FBO, citing concerns over an insufficient fuel volume to support a second FBO and that by authorizing a second FBO the City “would invite additional litigation.”  Echard wrote that “He [Gerrity] also stated that the City may wish to open its own FBO in the future so that would have to be taken into consideration as well.”

Two months later, when Echard indicated that 8FA would like to be open no later than March 2013, he reported, “Gerrity responded that a second FBO application would not even be considered until mid-January 2013, because he [Gerrity] had “too many responsibilities.”  Gerrity allegedly also voiced concerns that results of looming City elections would affect the decision-making.  Gerrity advised Echard to meet individually with the City commissioners.  According to Echard, “He [Gerrity] stated that the City would not consider 8FA’s proposal until at least three of the City commissioners voiced their support.”

On October 16, 2012 the issue finally came before the Fernandina Beach City Commission in a public meeting.  The Commission took no vote, and despite the presence of many 8FA supporters, the Commission took no public input.  Then Mayor Arlene Filkoff asked the City Manager to schedule a workshop to discuss the specific proposal.  To date, this has not occurred.

After 10 months of negotiation over the north site on the Airport for 8FA’s use, the City declared that site to be unacceptable, even though this site had initially been suggested to 8FA by the City in January 2012.  The City obtained aviation counsel in late November 2012 and proposed another meeting for mid December 2012.  By letter the City informed 8FA that it would only discuss development on the east side of the Airport and “were considering discussing incentives” to encourage such development.

According to Echard, “The cost of developing the necessary infrastructure for the east side parcel is expected to be measured in the millions of dollars.  Given that the existing FBO’s lease specifies a significantly below-market rate of $0.02 per square foot, and FAA Grant Assurance 22 mandates equal rates and fees for all service providers, it is naïve to suggest that any reduction in 8FA’s rent could possibly result in economic equality for both FBO providers.”

8FA maintains that it has met and exceeded each of the City’s published requirements in its effort to develop a new FBO at the Airport.

North side/East side contrasts

From 8FA’s perspective, the north side site is ideal for a second FBO.  The land is currently vacant and has been designated aeronautical development area containing federally funded basic infrastructure.  It is immediately adjacent to a large, FAA-funded ramp area that is currently not being used.  The existing FBO operates on the north side as well, and appears always to have utilized a City-owned apron.  The City suggested the proposed 8FA location in January 2012.  The City entertained development proposals for this site in 2010 and 2011 and has marketed this site since about 2007, Echard asserts.

The City-proposed east side development site “lacks even the most basic infrastructure, including utilities, storm water drainage and a ramp.”  The City plans to develop the east side of the Airport with its own facilities with FDOT funding of $5M.  Under the Joint Airport Capital Improvement Plan (JACIP) the FDOT has already funded a 5-year plan to develop infrastructure on the east side of the Airport that will include storm water drainage improvements, a ramp area and City-owned facilities to include a welcome center, corporate hangar and offices.  Echard maintains that the City “never displayed any interest in third-party FBO development on the east side of the Airport until it was unable to dissuade 8FA from its proposal to develop the north side parcel.”

What next?

Brian Echard hopes that the City will re-evaluate its position to avoid litigation, although he is prepared to litigate if necessary.  He said, “We’ve tried to negotiate in good faith, but we keep going around in circles.”  The City has apparently never provided specifics with respect to east side development incentives.  While Echard is planning to invest significantly in this project, he claims that the difference between the preferred north side site and the east side site moves the cost from “hundreds of thousands of dollars” to “millions of dollars.”  He is even more puzzled that the City appears to reject a proposal that would net higher lease income from a second FBO along with additional fuel flowage revenues.

As a 12-year city resident Brian Echard finds it frustrating that so many people fail to understand the economic significance of the Airport.  “When people fly in, they don’t just go to the south end of the island.  They go downtown and spend money.  The Airport helps other local businesses survive.”  He finds it difficult to reconcile the City’s decision to spend $25,000 to promote the City through the Airport, when the City seems to be discouraging business development at the Airport.

When contacted for input or comment to this article today, City Manager Gerrity replied that he preferred not to comment, while City Attorney Tammi Bach said that since she had just received a copy of the document at 4:30 this afternoon, she could not comment because she had not had a chance to read it.

January 29, 2013 7:37 p.m.