Tuesday, February 25, 2014

Internal review of Collier airports reveals tenant lease violations, unpaid rent and inadequate insurance

Collier County airport tenants have been regularly violating the terms of their leases, falling short on rent and failing to provide adequate insurance documentation for years, an internal review released Tuesday shows.

The new overseers of the three county airports found that 54 of the 97 tenants were either in violation of their contracts or operating on expired ones. In addition to the lease violations, a circuit clerk audit found that the county could be liable to pay back up to $500,000 in federal grant money that two tenants received, but didn’t live up to funding requirements. In both cases, the county didn’t keep proper track of how the grant money was being used, the audit found.

The shortcomings, canceled projects and missing documents likely are the result of high turnover at the airports, which have cycled through seven executive and interim executive directors since 2000, said Commissioner Fred Coyle.

“These problems are no surprise to me,” Coyle said. “Seven directors over 14 years is ridiculous.”

The violations could prove costly.

The county might be on the hook for $250,000 in U.S. Department of Commerce grant money to build a campground that closed in less than a year.

The project was approved under the promise the campsite would have a useful life of 20 years, said Megan Gaillard, an auditor for Collier County Clerk Dwight Brock’s office.

It will ultimately be up to the commerce department if it wants the county to reimburse the funds, Gaillard said.

“We suggest the county work with the department to resolve the issue,” she said.

Another tenant, Global Manufacturing Technology, received a $250,000 grant from the U.S. Department of Agriculture to build a powder coating system. Much of the heavy machinery and equipment was bought and installed, but the system never was completed, Gaillard said. Some of the equipment couldn’t be found by auditors and the county hasn’t kept the proper records to show how the money was spent.

The county needs to notify the USDA that the project never was completed and work with them to refund the money, Gaillard said.

The tenants’ lease violations varied in severity.

One tenant owed $70,000 in rent, having not paid since the most recent airport executive director was let go five months ago, the review found.

Another built several structures outside a go-kart-track and raceway without building permits including a two-story operations center. The tenant, Immokalee Regional Raceway, didn’t have insurance for the go-kart-track, operated a concession stand without notifying the health department and allowed RVs to camp overnight without a permit, the review found.

The raceway also didn’t get permission from the county to build part of the go-kart-track, which crosses into an area that’s specifically zoned for flight. A $96,000 restroom, built by the now defunct campground and funded with the federal grant money, was lifted and hauled across the airport without a permit and is now located just outside the dragway, according to the report.

The violations show why commissioners want to run the airports through the county manager rather than an executive director, Commissioner Georgia Hiller said.

“We have to take whatever remedial action we can to straighten all this up,” Hiller said.

County commissioners narrowly ousted Chris Curry, their former airport director, in September. They then turned control of the airports to Collier’s growth management division — a department that deals in a wide swath of county services and ultimately reports to Leo Ochs, county manager. Curry sued the county in January, saying commissioners breached his contract by terminating him early. He has since been hired to run the Tallahassee Regional Airport.

When Curry started at the airports in 2010, the compliance issues were significant, he said. Not just among tenants, but the runways themselves were dangerously close to being unusable.

“When you come into a new environment you try to fix the most serious problems first,” he said.

More than half of the lease violations the county uncovered in its review 37 of the 54 were solely because the tenant’s insurance documentation wasn’t on file. But that doesn’t mean they don’t have adequate insurance, Curry said.

“Most of the tenants did have their insurance documents,” he said. “The question is whether the airport had the hard copy on file, because the requirements were just to provide an annual copy to the airport.”

County inspectors won’t shut any businesses down over the violations, said Nick Casalanguida, administrator of the growth management division.

“Every tenant that didn’t have insurance documentation has been contacted and that will be wrapped up in a month,” he said. “Situations where tenants are significantly delinquent in rent, we’re coming up with a reasonable payment plan. We’re taking the approach to work with these folks to get it resolved, instead of just laying the hammer down.”

Many have already gotten back on track, Casalanguida said.

Salazar Machine and Steel, which is the furthest behind in rent, will have paid $54,000 of the $70,000 it owes by Friday, he said. The company’s owners are trying to work with the county to lessen or forgive the other $16,000 it owes in late fees. 

Story and photos:    http://www.naplesnews.com

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