Saturday, November 01, 2014

Step toward eviction taken to get MidairUSA to pay rent • Griffiss International Airport (KRME), Rome, Oneida County, New York

Oneida County is putting legal pressure on MidairUSA over back rent for facilities it uses at Griffiss International Airport.

The county says Midair, an aircraft refurbishing and modification operation, owes $663,224 in unpaid rent and other charges, including heat. There have been conversations and correspondence going back several months in an effort to resolve the matter, but on Friday morning the county formally initiated legal action in hopes of moving the action. The notices served on Midair yesterday give the county the right to start eviction proceedings in 30 days involving one hangar if there’s no resolution to the situation before then, said County Attorney Peter M. Rayhill.

Midair President William Moore said Friday afternoon he wants to work with the county, expressing hope that he and the county can come to an understanding. While he questions some of the charges claimed by the county, he does not dispute his company owes money. There has been talk of a payment plan, including interest, being devised.

“I thought we had it worked out,” he said of paying off the back rent over time. He said he hopes the notices are just a tactic to move the two sides toward an agreement in the next month.

Nonetheless, Moore is worried that Friday’s notices will create unnecessary angst among his 178 employees. He says there’s work for them, saying there’s a Boeing 747 being worked on now and a 777 waiting to be done. There’s also a 777 in front of a Midair hangar that’s finished.

The company official said his problem is that Russia-based Transaero Airlines, Midair’s main customer, is making partial payments on already completed work as a result of the jittery situation in Crimea and problems in the Russian economy.

The value of the Russian ruble has declined, making it harder for Russian companies to do business in the U.S. Moore estimated the ruble is trading 43 against the dollar. The ratio used to be 7 to 1, he said.

Also, for the same reasons, the airline has canceled plane modification work this year.

Midair now mostly does repairs on Transaero aircraft. The company turned more revenue on interior refurbishments. Transaero was Midair’s sole customer until earlier this year.

The company occupies three hangars at Griffiss: two are covered by leases while the third one has none. In the latter case, there was a lease on a nose dock that expired and was not renewed. Eviction from the nose dock would be easiest for the county to pursue because there’s no lease in place. The nose dock is the smallest of the three hangars used by Midair.

The county sent a demand letter in July, but the company remains behind on its payments. The letter neither listed steps that might be taken if there was no response nor contained a deadline for a reply. Nor did this letter start the clock ticking on a legal process, unlike the notices delivered on Friday.

County Executive Anthony J. Picente Jr. said the county has tried to work with the company so as not to jeopardize the ongoing operation but at the some time resolve the unpaid rent to protect taxpayers’ interests.

“We had to protect ourselves the right way,” he said of the decision to initiate a legal process. “I wish we we weren’t at this point. We’ve given him as much leeway as we could possibly give.”

Nonetheless, Picente says he’s open to talking with Midair in the next month to see if an agreement can be reached, “but it has got to be better than what’s been discussed.”

Moore said he’d be willing to give second position to the county behind a lender on Midair-owned assets at Griffiss so the county could secure its interests. He says the value of the asset exceeds what’s owed on it.

Midair also has an operation in Melbourne, Fla. Some operations were moved there from Griffiss, where Midair has had a presence for about a decade. Moore said he has reached a payment plan with the Melbourne airport officials.

Large aircraft maintenance has been a major focus of the county’s effort to make Griffiss an economic engine. Griffiss became the county airport in 2007.

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