Wednesday, July 18, 2012

Aviation project troubled

The board of the Reno-Tahoe Airport Authority doesn’t want to renegotiate its deal with the company that plans a $10 million facility to serve private aircraft owners.

 And some board members last week said they’re concerned that the deal is going to pieces.

Million Air, a Houston-based company, has missed deadlines to deliver engineering documents that airport officials want to see so they can track progress on the company’s facility at Rock Boulevard and Mill Street at the southeast corner of the airport.

The company has said it plans to open that facility next spring, but work hasn’t begun. The facility would include hangars, fueling operations, meeting rooms, offices and other facilities to serve crews and passengers on private aircraft.

Airport executives didn’t get into detail during a public meeting last week, but one official said that problems between the airport and Million Air cover a wide spectrum.

“There were concerns both with operational performance and financial performance,” said Tina Iftiger, the airport’s vice president of economic development. Top-level financial executives from the airport as well as the company have been drawn into private talks.

Members of the airport board declined a proposal from Million Air that would allow the company to work with Airport President and Chief Executive Officer Krys Bart and her staff to renegotiate the deal between closed doors.

The company didn’t send any executives to a meeting of the airport board last week, and the absence didn’t sit well with some board members.

“This relationship probably isn’t going work,” said Airport Trustee Adam Mayberry.

Randi Thompson, another member of the board, said Million Air’s plans as a fix-based operator for private aircraft — “FBO” in the business — may have been unrealistic from the start.

“I felt we were getting the Ritz-Carlton of FBOs. I questioned whether the economy would support a Ritz-Carlton,” Thompson said. The company said it’s struggled with reduced revenues from fuel sales at the airport since it began operating in temporary quarters about 18 months ago.

That’s a reflection of a slowdown in visits by corporate aircraft to the Reno-Tahoe area. Bart said a relocation of the annual Safari Club International convention from Reno this year and sharply lower private air traffic after the tragedy at the National Championship Air Races in September also cut into fuel sales.

When Million Air first announced its plans, airport officials said the company was expected to generate an economic impact of roughly $57 million in the five years after opening the Reno facility.

John Wagnon, a member of the airport board, said the airport’s unwillingness to renegotiate its deal with Million Air doesn’t necessarily mean the company’s plans are dead.

“They still have the ability to honor the agreement that is in place,” he said.

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