Friday, January 04, 2013

Wilkes County (KUKF), North Wilkesboro, North Carolina: Payback of airport aid is possible

Dove Air’s closure and MX Aircraft’s scaling back at the Wilkes County Airport could cause the loss of much of the grant funds awarded for establishing an “air industrial park” at the airport, said county officials.

Growth plans of the two companies at the airport played a key role in Wilkes County government being awarded nearly $3 million in grants for the industrial park.

The High Country Council of Governments prepared applications for most of the grants and reported that MX Aircraft’s plans for 50 new jobs and Dove Air’s plans for 30 new jobs at the airport were used as justification for the assistance.

Because the growth plans weren’t achieved, said county officials, Wilkes County government could have to pay back part of the grants or not receive remaining portions approved but not yet actually sent.

County officials said some of the grants have “clawbacks” and some don’t, referring to stipulations requiring repayment for not meeting certain economic development goals.

 “There are issues that have to be resolved because some of the grants were predicated on jobs being created,” said County Attorney Tony Triplett.

With two to three years left to fulfill the economic development requirements, said Triplett, the requirements could be met with growth from other companies.

“Although MX Aircraft was a vehicle for it, the work (at the airport) was always intended to be for any viable business,” said Triplett, also attorney for the Wilkes Airport Advisory Board.

As other county officials pointed out, he said, the grants helped provide the only Wilkes County government-owned “pad-ready sites with water and sewer and two- or three-phase electrical power.”

In a 4-1 vote Wednesday, commissioners approved a new lease that lets MX scale back its presence at the airport by leasing only a fourth of the county-owned 12,648-square-foot “community” hangar for $500 per month. The lease can be canceled with a 30-day notice.

Agreement terminated

Under an economic incentive agreement between the county and MX, terminated last month by the commissioners, MX was to receive $175,000 from the county after MX built a 10,000-square-foot hangar with a tax value of at least $425,000.

Also last month, commissioners terminated a lease agreement calling for MX to lease land beneath the new hangar from the county.

The incentive agreement required the addition of least 12 new MX jobs at the airport over two years and that county government extends water and sewer lines to the site of the new MX facility.

MX met part of the requirements by moving its manufacturing operations and all business personal property from Florida to the community hangar in 2008, but the new hangar wasn’t built. County officials stated that MX owner Chris Meyer said the company suffered from a nationwide economic slowdown.

Because the agreement required that the county reimburse MX for its lease payments, MX hasn’t yet paid the county anything for occupying county-owned property at the airport.

MX was to be the first occupant of the “airpark” when commissioners approved the lease for the new hangar site and the economic investment agreement with the company in July 2009.

County officials have hailed the air industrial park, on the east side of the airport, as a valuable additional tool for economic development in Wilkes.

Commissioner Keith Elmore, now chairman, cast the lone dissenting votes in July 2009. Elmore said he didn’t like having the $175,000 payment tied only to completion of the hangar, giving the county essentially no recourse if MX decided to move and sell the hangar.

Triplett said the $175,000 payment became part of the agreement after county officials learned that Federal Aviation Administration wouldn’t approve a plan to convey ownership of the seven acres (originally five acres) to MX. Triplett said the FAA preferred maintaining public ownership of land within the fence around an airport.

New lease discussed

During the meeting Wednesday, Commissioner Gary L. Blevins said he thought $500 per month wasn’t enough for the new lease with MX and that MX should be penalized for not fulfilling its obligations under the economic investment agreement.

Commission Chairman Keith Elmore thanked Blevins for his comments but noted that the proposed agreement for MX’s lease of a fourth of the community hangar had already been advertised.

Commissioner Gary D. Blevins asked how the new lease would impact payments into the airport enterprise fund.

Triplett said it would reduce it since MX’s lease payments have gone into the airport enterprise fund and reimbursements to MX have come from the county’s general fund.

“I guess we’ll have to address that  somehow,” said Gary D. Blevins.

Gary L. Blevins asked if the county could require that MX make lease payments two to three months in advance. Triplett said that couldn’t be required without revising the lease agreement and advertising it again.

Commissioner David Gambill then made a motion to approve the lease calling for MX to pay $500 per month for a fourth of the community hangar. Gary L. Blevins cast the only vote against the motion.

Dove Air foreclosure

Raleigh-based Capital Bank bought the 19,738-square-foot Dove Air Inc. hangar, in late 2011 in a foreclosure sale for $2.29 million, apparently what Dove Air owed Capital. Lowe’s Companies Inc. built and formerly owned the hangar.

Dove had leased the county-owned land beneath the hangar and adjoining land from the county since 2006. Under an amendment to the lease, commissioners let Dove owner Joe Duncan pledge the former Lowe’s hangar and his lease interest in county-owned land as collateral for the bank loan that resulted in the foreclosure.

Under this same amendment, Dove Air agreed to build a 15,000-square-foot hangar for an aircraft paint shop by Nov. 7, 2009, on part of the 404,000 square feet it leased from the county.

Commissioners later extended the deadline for completing the new hangar to Nov. 7, 2010.

Triplett said county government’s position is that Capital Bank must pay county property taxes on the former Lowe’s hangar and annual lease payments for the airport land that Dove earlier agreed to pay. He said Capital Bank also assumed Dove’s obligation to build the hangar with an airplane paint shop.

Grant funding

County government was awarded $947,000 from the N.C. Department of Aviation to cover most of the cost of moving dirt and relocating Corporate Aviation Drive on the west end of the airport and a $400,000 grant from the N.C. Department of Transportation for paving and other work to provide a site for Dove’s proposed paint shop hangar.

This work also created “building pad” sites for more hangars to help the county draw other companies to the air industrial park.

County government was awarded about $1.3 million in grants for water and sewer lines and related work for facilities planned by MX and Dove.

The work, which has been completed, included a 5,400-foot-long, 8-inch water line, booster pump station and 100,000 gallon water storage tank to provide fire protection needed if any facilities, in addition to the MX facility, were built.

It also included 345 feet of 8-inch gravity sewer line and 2,985 feet of sewer force main connected to an existing wastewater treatment plant at the airport.

The grants included $300,000 from the Appalachian Regional Commission, $178,225 from the N.C. Department of Commerce’s Industrial Development Fund, $100,000 from the Golden LEAF Foundation, $100,000 from the N.C. Rural Center and $615,000 from the U.S. Department of Commerce-Economic Development Administration.

A $67,275 match from county government was required.

Triplett said state officials agreed to reimburse county government for 90 percent of the cost of the 22 acres bought for the air industrial park, with the money coming through the N.C. Division of Aviation over a period of years. The land was bought in 2010 for $450,000.

http://www.journalpatriot.com

Bank buys hangar in foreclosure

 http://www.mxaircraft.com

http://www.airnav.com/airport/KUKF

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