FAA seeks changes in airport lease

By Ed Runyan

runyan@vindy.com

VIENNA

The Federal Aviation Administration proposes that the Western Reserve Port Authority fix a lease authorized last year at the Youngstown-Warren Regional Airport by either buying an $800,000 building or negotiating a new lease with the building’s owner.

The FAA also is asking to receive more details about the lease so it can better understand why the port authority charged $3,000 per year for the land — 12.5 cents per square foot per year — when that fee is below what other airport tenants pay.

The port authority approved a lease with Millwood Inc. that allows the company to use 24,000 square feet under a building Millwood later bought to use for research and development of packaging equipment.

The port authority, which runs the airport, controls the use of the land but not the building.

The building, on the airport’s western edge on Ridge Road, was once known as the Davis Air Cargo Center. Construction company owner D.D. Davis had built it to give prospective companies a place to operate an air-cargo business to use a cargo apron — an aircraft loading and unloading area — behind the building, also on airport land.

The FAA has said the lease, for 38 years with a 25-year company option, was improper because it “ties the port authority’s hands” regarding future use of the cargo apron built in 1999 with $11.5 million in federal funding.

Davis built the cargo building in cooperation with the port authority at about the same time that the cargo apron was built. The building and cargo apron have been vacant for most of the last decade.

In an August letter to the FAA, Dan Dickten, the airport’s director of aviation, said he believes the current lease already protects the FAA’s investment satisfactorily but suggested that the authority could buy the building from Millwood if necessary.

Ultimately, the port authority’s powers of eminent domain would also be available “in order to secure ownership of the building,” the letter noted.

An Oct. 29 letter to Dickten from Stephanie R. Swann of the FAA’s Detroit office, said the port authority should consider buying the building from Millwood so the authority can “control the terms of any lease agreement for the building.”

Another option, the letter said, is for the authority to reach an “option-to-purchase agreement” with Millwood so that the authority could acquire the building if an aeronautical user wanted to use part or all of it in the future.

Dan Keating, legal adviser for the port authority, said he hopes Millwood will accept a lease that would allow the authority to buy the building for fair market value if the need arises.

Lionel W. “Chip” Trebilcock, Millwood president, said he’s not communicated with the port authority or the FAA, but he’s ready to work with the authority on whatever changes are needed.

Trebilcock said he has a hard time understanding why the FAA is concerned about the lease because it contains language that gives the authority access to the cargo apron.

Furthermore, there is vacant land near the apron that could be developed into another cargo building if the demand arises, he said.

“We’re more than willing to listen to what the airport has to offer,” Trebilcock said, adding: “We’re surely are not going to restrict the use of the cargo apron if they [the port authority] need it.”

There is a fence between the Millwood building and the cargo apron, and Millwood employees do not pass through the fence, Tribilcock said.

In her letter, the FAA’s Swan said: “We remain concerned about the methodology used to calculate the [cost of] the ground lease.”

FAA spokesman Tony Molinaro said that does not mean the FAA thinks there was anything improper about the cost charged to Millwood, but the FAA needs to examine the matter further to determine if the rate was correct.

According to the Airport Leasing, Rates & Charges Policy adopted by the port authority last summer, lease rates at the airport range from 15 cents per square foot annually for land with no building on it to 70 cents per square foot for land under a building with access to airport runways, such as a hangar.

Scott Lynn, port chairman, said the port authority chose the price of 12.5 cents per square foot because the building had been vacant for so long and to encourage Millwood to bring its 50 to 60 jobs to Vienna instead of taking them to another area in Ohio.