FAA funds may ride on sale of building

YOUNGSTOWN-WARREN AIRPORT

By Ed Runyan

runyan@vindy.com

VIENNA

The company that purchased a building at the Youngstown-Warren Regional Airport’s western edge in 2009, leasing the land under it from the Western Reserve Port Authority, will sell the building to the authority — at the price it paid for the building and improvements.

Such a sale could become necessary to keep federal funding flowing to the airport.

The Federal Aviation Administration told the port authority last year it should not have leased the land under the building to Millwood Inc. — for 38 years with a 25-year company option — without FAA approval. That, the FAA said, ties the port authority’s hands regarding future use of a cargo apron immediately behind the building, built in 1999 with $11.5 million in federal funding.

The FAA said one of the acceptable options the port authority could employ to “fix” the 2009 lease was to buy the building from Millwood.

The port authority runs the airport and promotes economic development. In a letter to the FAA last week, the port authority said Millwood Inc. “has expressed a willingness to sell the building” on Ridge Road.

The port authority doesn’t have the funds to buy it now, but will work hard to find an aviation-related buyer, the letter said.

Lionel W. “Chip” Trebilcock, Millwood president, said the company doesn’t want to move its research and development operations to another location but will do so to prevent the port authority from losing the $1 million per year it gets from the FAA to maintain and improve the airport.

Trebilcock said Dan Dickten, director of aviation at the airport, told him that if the port authority fails to correct the lease, the FAA could pull the airport’s funding, and that could shut the airport down.

Trebilcock said he told Dickten, “Please take your building. I don’t want to be a hindrance to the community.”

Millwood paid the estate of the late D.D. Davis about $850,000 for the building and invested additional money to gut the inside, rewire and repaint it, and repair the parking lot. Trebilcock said he couldn’t say for sure how much is invested in the building.

Even selling it at cost would harm Millwood, Trebilcock said, because moving its research and development elsewhere would involve down time for research and development. The company is in the packaging and pallet business.

Millwood purchased the R&D building and its corporate offices, two doors south, at the same time.

Trebilcock said Dickten told him it was not a matter of “if” Millwood would have to vacate the R&D building but “when.”

Dickten said last week he will withhold comment on whether it is certain Millwood will have to vacate the building.

“I think we need to wait and see how they [the FAA] respond” to the authority’s letter, Dickten said.

As for whether failing to correct the Millwood lease would cause the airport to lose its $1 million in annual funding through the Airport Capital Improvement Program, Dickten said he has seen cases where it has happened.

An air cargo apron is a concrete area designed for aircraft to use to load and unload cargo.

The R&D building, constructed with private money, and the apron were intended to attract air cargo business, but none came.

Trebilcock said renegotiating the lease is probably not an option because the FAA won’t approve a lease that involves expansion of the building. Expansion is allowed under the terms of the current lease.

“The FAA has said that building will never be expanded,” Trebilcock said.

Trebilcock added that Millwood’s position is that the port authority should “buy the building or live up to the lease’s terms.”

The lease was written in 2009 when the airport’s director of aviation was Steve Bowser, who has since left for a job in California. Dickten was hired in April 2010. In August, Dickten reported to the FAA that the lease “didn’t look right.”

In last week’s letter to the FAA, the port authority said it will need three years or more to resolve the problem with the Millwood lease.

“While the port authority is actively searching for funding options to purchase the building, we believe that the best option is to continue to actively market the building and cargo apron to an aviation-related user, so that a new aviation-related tenant may assist in the purchase of the building,” the letter said.

The letter said the port authority, county commissioners from Mahoning and Trumbull counties and U.S. Rep. Tim Ryan of Niles, D-17th, are “prepared to embark upon an aggressive plan to develop an air-cargo demand” at the airport.

“We optimistically believe that a period of 36 months, possibly more, may be required to acquire an air cargo and/or aeronautical user for the building,” Dickten said.