Okaloosa County BOCC — October 21, 2014 — Action Item Printout — reading text

BOARD OF COUNTY COMMISSIONERS AGENDA REQUEST DATE: October 21, 2014 TO: Honorable Chairman and Members of the Board FROM: Sunil Harman SUBJECT: Proposals for FBOs to Operate at Destin Airport DEPARTMENT: Airport BCC DISTRICT: All STATEMENT OF ISSUE: In an effort to resolve ongoing community compatibility, declining airport revenues for O&M and compliance issues at the Destin Airport, the Principal of DestinJet and founding partner in Sterling Diversified, LLC which acquired Regal Air Destin, LLC has submitted the attached negotiated settlement proposal to the County on behalf of Destin Jet, Regal Air and Vertol. BACKGROUND: Over the last several months, concerns have been raised regarding the viability of sustaining two FBOs at the Destin Airport due to declining fuel sales; loss of airport revenue due to downturn in general aviation activity; compliance with existing leases/sub-leases; and community compatibility noise complaints related to Vertol helicopter operations . The following is a summary of the negotiated settlement proposal: 1. County agrees to authorize Destin Jet and Regal Air to operate under common ownership and brand with the following conditions: a. Destin Jet and Regal Air agree to increase its fuel flowage to $.075 cents per gallon from $0.05 and $0.06 per gallon respectively.. b. Regal Air agrees to pay $50,000 towards the balance owed to the County for the assumption of Miracle Strip Aviation’s past due lease payments and the remaining balance over a 24 month period, rather than a sixty (60) month period as originally agreed to by Regal Capital, LLC. c. Regal Air agrees to remove all “Regal Air” signage and operate the two FBO locations as a single brand, Destin Jet. d. County agrees to extend the Destin Jet lease from February 24, 2044 to April 14, 2049. The language in the lease allowed for a 20 year lease and a 20 year extension which was to begin from the Date of Beneficial Occupancy which was April 15, 2009 and ending April 14, 2049. The lease effective date is February 26, 2004 and expires on February 26, 2044. This will correct an error in the original agreement. 2. Vertol agrees to enter into an agreement with the County for its operations at the Destin  Airport and Crestview Airport, which shall include an annual operational fee not to exceed $2,000 per year. a. Vertol agrees that there will be no rotorcraft or rotary-wing (helicopter) operations (engine running) on the Destin Jet’s north leasehold ramp between the hours of 10:30 p.m. and 8:00 a.m., 7 days per week. b. Vertol agrees to relocate all helicopter operations at all times to the south ramp within five (5) years. This time allows for permitting, design and construction of a new office and instructional facilities. c. The County agrees to construct a helicopter engine run-up pad at the south end of the taxi way within two (2) years of such relocation. Should the Board approve the negotiated settlement proposal, Department of Airports staff in conjunction with the County Attorney will prepare the necessary agreements which will incorporate the terms of the negotiated settlement proposal and place them on consent agenda for approval at the next BCC meeting. OPTIONS: Approve, reject or make a counter-proposal. RECOMMENDATIONS: : Staff recommends that the Board approve the attached proposal RECOMMENDED BY: APPROVED BY: John Hofstad, Interim County Administrator