Miracle Strip Aviation, one of two fixed-base operators at Destin Airport, owes Okaloosa County almost $500,000 in back rent and other fees.
The company apparently amassed the $485,382 debt in part because of an error in the county’s billing system. From 2006 to 2011, Miracle Strip Aviation received incorrect invoices from the county.
“They were not paying the amount they should have been paying,” County Administrator Jim Curry said Friday.
The invoices, which billed for an amount less than the actual lease payment, were discovered in February 2011 by the county’s internal auditor.
Curry said the discrepancy between what Miracle Strip Aviation was paying and what it should have been paying might have gone unnoticed because the lease revenue wasn’t earmarked for a specific budget item. The lease revenue was placed in the general airport fund.
Mike Stenson, the county’s deputy airports director, said Miracle Strip Aviation also had seen its business decline because of competition from Destin Jet, the other fixed-based operator at the airport, and from “the economy in general.”
Telephone calls to Miracle Strip Aviation were not returned Friday.
In late February, county commissioners were willing to work with the company to keep it operating. They directed the airports staff to negotiate a payment plan with the company, which is now owned by the Gulfport, Miss.-based Regal Capital.
Regal Capital CEO Jack Simmons said Friday that legal counsel has advised him not to comment while negotiations are under way.
Curry said Friday they are close to an agreement.
“I think we’ve got a verbal commitment to accept it,” he said.
Under the plan, Regal Capital would pay the county $150,000 up front, make $100,000 in major renovations to the county-owned terminal at Destin Airport and repay the remaining $235,382 at 4 percent interest over six years.
Curry said he expects the agreement to go before county commissioners for approval later this month.
“What you’ve got is a company that wants to repay that debt and take that facility and get it back up and operational,” he said.
Regal Capital initially offered to pay $100,000 up front, make $207,500 in renovations to the terminal and repay the remaining $177,882 at 4 percent interest over the next five years. However, county commissioners said they wanted Regal to put up more cash.
The county declared Miracle Strip Aviation in default of its lease Jan. 4 after giving it 30 days to settle the debt or submit a viable plan to pay it off.
After its owners — who included Mary Brigman of Baker, Michael Van Atta of Destin and Don Van Atta of Mobile, Ala. — sold their interest to Regal Capital, Regal Capital assumed the debt and the lease, which expires in December 2033.
Miracle Strip Aviation’s lease dates back to 1978.
Commission Chairman Don Amunds said it’s important for the county to help keep Miracle Strip Aviation operating.
“Competition is healthy, and with two FBOs out there it’s important to keep both of them healthy, if we can, and be willing to keep them alive in this environment,” he said.
Curry said a successful fixed-base operator is vital to an airport.
“When they’re successful, if it’s running and so forth, then the airport is making money on fuel sales and the different services they provide,” he said. “You’ve got to have someone providing fuel to the planes coming in. You’ve got to have somebody who provides maintenance. … Without one, you really just have a landing strip.”
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