Tuesday, December 16, 2014

White Elephant No More: Flagler County Approves 5-Year Lease of Costly Ginn Hangar in Deal With New Company

In the latest of a string of successes for the Flagler County Airport’s economic zone, the Flagler County Commission Monday evening agreed to a five-year lease, potentially expandable to 30, with a Delaware-based aircraft certification company that will take possession of the old, 14,000-square-foot Ginn hangar and offices that had been costing the county considerably more money than it was bringing in for most of its existence.

The $10,500-a-month lease with New Castle, Del.-based Delta Engineering will end that bleeding for good. The county had built the structure for the now-defunct Ginn Corporation during the housing boom year, but was left holding a $2 debt when Ginn went bankrupt. The lease to Delta Engineering means that every building at the county airport is now fully occupied and either paid for or paying for itself, a significant turn-around from a time just four years ago when the airport a small herd of white elephants. Just last summer, the National Guard announced that it was moving a large operation into another building with a troubled history at the airport.

The turn-around has largely been the result of the work of County Administrator Craig Coffey and Airport Director Roy Sieger, the latter being most instrumental in landing Delta Engineering after meetings with the company’s principals–a father and his adult two children.

Delta Engineering, according to a county news release, provides the aviation industry with certification, engineering and manufacturing services. Its projects range from small single engine aircraft to Boeing 747-400 and 777. The company provides FAA certification for aircraft modification and parts manufacturing, designs and manufactures the kits and parts for the aircraft modifications, engineers the avionics for specialized data acquisition system requirements and builds testing equipment load simulators.

Sieger announced the deal in the presence of one of the principals, Jonathan Moritz, at a county commission meeting Monday, shortly before the commission approved the lease. Delta Engineering isn’t abandoning Delaware so much as expanding in Flagler County, Moritz said.

“The reason why we’re leaving or expanding down here versus Delaware is a lot of pushback that we got from the county up in that area,” Moritz said. “So, hey, you’re going to push back, we’ll find another place, especially with being warmer in Florida. Why not?”

Moritz said the company has about 30 employees in Delaware. It expects to hire expects to hire 10 to 30 people in the next 24 months, with salaries ranging between $70,000 and $120,000. The move into the old Ginn building may be temporary. “This facility to begin with is just to get them started here,” Sieger said. “They do plan on building a bigger facility on the south side of the airport, much bigger than the current hangar they’ll be in right now.”

Significantly, the county’s economic development department was not mentioned in the announcement Monday, nor did the meetings leading up to the announcement involve it directly. Moritz explained that his family is a member of the Disney Vacation Club, had been in the area hopping from airport to airport, looking for a place to expand, and met Sieger after the older Moritz–John, who unsuccessfully ran for a state senate seat in Delaware in 2010–connected with him.

“We just came over, saw the hangar and said, it’s perfect. The county, Roy, Sally met with my father,” Moritz said, referring to Sally Sherman, the deputy county administrator, “very helpful, outgoing, and we said this is the place.”

The proposal was included on the commission’s consent agenda–the portion of the agenda that includes numerous items that are usually approved wholesale–until Commissioner Charlie Ericksen, who has always maintained close connections with the airport, pulled the item for discussion, and to give Sieger a chance to highlight the deal.

The proposal drew only one comment–from Alan Peterson, who was a county commissioner during the airport’s darkest days: he remembers being singed when the county got burned, and cautioned against a repeat of those days.

“I’m pleased to see that we finally seem to have a very viable tenant for the Ginn hangar,” Peterson said. “My only concern is that you intend to negotiate a potentially 30-year lease. If the company is planning on expanding and building their own property, my concern would be whether they would need the property for the entire 30-year period or any portion of a five-year lease, and therefore I would think that some restriction should be built-in so that it can’t be sublet to another tenant for whatever portion of the remaining five-year lease would be. But that’s my only concern. I’m very pleased that we’ve finally gotten somebody that looks like it’s going to be a great boon and a great provider of jobs for Flagler County.”

The lease, Coffey said, includes a sublet provision, “and the reality is if they brought a sub-supplier of theirs along and put them in that hangar we would work with them on that to expand jobs and opportunities here,” Coffey said. “I think we’ve got that addressed, I think it’s Ok, and they’ll still pay the rent at the end of the day, that would be great.”

All sub-leases have to come before the county commission for approval.

Source:   http://flaglerlive.com

The 14,000-square foot building, built for the Ginn Corp., seen here when it still bore the company’s name. (c FlaglerLive)

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