By Anton Riecher & Kathleen Calame
The search for the history behind the million dollar airport hangar purchases, as well as why and what to do with the hangers now, were topics of discussion at the July 12 meeting of the City of Devine’s Airport Advisory Board, who is also seeking advice from TxDOT Aviation on planning.
The former Mayor Cory Thompson and the prior Devine City Council decided to go ahead and declare imminent domain last year forcing the tenant to sell so the city could buy the airport hangars. The settlement was reached in February 2023 at a cost of $885,000. Overall Certificate of Deposits for $1 Million were obtained to buy several hangars with.
New Mayor Butch Cook, elected two months ago and the new city council now has to decide what is the best use for the large vacant hangars and what to charge for them.
In the quest for the who, what, where, why, when, and what do we do now–Cook insisted the council seek the opinion of Devine’s Airport Advisory Board members and TxDOT Aviation before taking action on leasing the hangars or making any changes.
To his surprise the City of Devine’s own airport advisory board’s opinion or advice had NOT been sought before the city’s decision to purchase the hangars which gave the city total control of the airport by moving out a tenant that was not in compliance.
Going forward, Mayor Cook wanted to involve the city’s airport advisory board, seeking out their knowledge and expertise in the industry, knowing all have used the airport and/or owned hangars there. Most board members have served on this board for many years.
So the July 12, 2023 meeting was planned with the Devine Airport Advisory Board and TxDOT Aviation officials and with city officials present.
Hap Squires opened the meeting at 2:02 pm then offered citizen comments, and no one was signed up to speak. Next, he then requested changes to the minutes of the prior month’s June 12, 2023 meeting.
“I have one minor change on the second page where it says ‘Squire says it seems to me that to develop long range plans for the city we need to have long-range plans for the city.’ …” That should read to develop long-range plans for the “airport” we need to have long-range plans for the city. It’s a minor change,” Squires requested.
Another Airport Advisory member Chris Yanta requested another change.
“On the fourth page the minutes talk about interim city administrator and board, I mean the Texas Aviation, wanted us to make sure that we were all in line with the grants. During this time a comment was made that all of the airports in Texas are owned by the city, it’s all the property on the airports. Then in the next paragraph it says Airport Manager Humphrey discussed that in most of the airports in the state, the hangars are owned by the city. I’ve got it on recording the way that actually went down. I can play it for the members here if I need to,” said Chris Yanta, Devine Airport Advisory Board Member.
“It was stated by the interim city administrator that the cities owned all of the airports,” he said.
“They then asked Vicki what are the amount of airports that have the deal?.. In Vicki’s response, she said about 50% of the airports in the state are private and have private hangers on them,” said Yanta.
“So I move that that be changed to read what was accurately said.”
The minutes were approved unanimously with the changes mentioned on a Bill Bain/ Greg Coyne motion.
Oath of Offices
Mayor Butch Cook administered the oath of offices to the entire Airport Advisory Board of The City of Devine:
Brian Crosey, Chris Yanta, Vicki Pumphrey, Hap Squires, Bill Bain and Greg Coyne.
History
Devine Airport Advisory Board President Hap Squires welcomed the two TxDOT representatives to the meeting.
“I want to welcome Daniel Benson and Jim Hailey from TxDOT who at our request have graciously put together a presentation giving us ideas on how we can best utilize our airport and how TxDOT can assist us,” said Hap Squires.
“Before I turn it over to them I would like to give a brief history so everybody’s on the same page. Five years ago we had 100 % of the hangars were privately owned. We had a sleepy little airport that is well maintained. It was not self sufficient, the cost to the city was minimal I believe the net cost was $20,000 a year. In addressing the shortfall the city was in the process of raising the rental rate since the leases became due. This all changed in November of 2018. Our airport manager received a letter from TxDot stating that we have issues at the airport thus threatening our current and future grants about the same time we received a phone call from TxDOT stating (if) the situation is not fixed TxDOT will suspend all of our current grants. And our current Grant is $600,000, not only make us payback our current grants but our past one as well. Over the next few years in numerous meetings the city council decided that the best approach to getting control of the airport would be to own it in its entirety. This was also the suggestion of TxDOT. Today the city owns all but three of the hangers, but we’re a million dollars in debt and our cash flow is significantly higher than our income,” Squires explained.
“I know we can’t undo history and hopefully Mr. Benson and Mr. Haley can let us know if we’re still in jeopardy of losing our funds and what suggestion we can offer to achieve self- sufficiency. With that ball I throw it at you guys,” said Squires.
TxDOT representatives
Daniel Benson the Airport Planner with the Texas Department of Transportation introduced himself. “I’m an airport planner and I cover the South Region of Texas. I have 47 airports assigned to my program.”
Next Jim Halley with Director of Airport Planning and program introduced himself. “I’m over all the planners as well as our compliance, environmental, the state aviation system, planning the Strategic Plan for the entire system, so 271 airports in our program. We had a beautiful program we were going to show you but we’re in the wrong building for being able to show that so we can speak off the cuff. So it sounds like compliance and grant obligations in paying the main flavor of the day for everyone,” said Halley.
“No I really just kind of wanted to present everybody here and citizens our history and what led us to where we are now. I am personally very interested in your presentation and what we can do,” said Squires. “We can’t undo history. But first I think it is important to know first off is, are we are in compliance? Is there something we still need to do to get in compliance? But more importantly is where do we go from here? I mean you know we can’t get our million dollars back,” said Squires.
“If you talk to Mike you are going to know more about the compliance and things. Let me say I’ve just joined TxDOT Aviation in January after a 5 year hiatus. I spent 15 years in the aviation division prior to 2017 and have come back in to this new role of planner. So I don’t know the history of what transpired. My understanding from the previous planner Micheal Van Fleet, who is now with the FAA, in a conversation with him, he indicated there was some issue with one of the hangars that led to that person leaving the airport after the lease expired. So I am not sure what the history is and with the million dollars.
How often do they ask for money back
The Mayor then asked a few questions.
“I am Butch Cook the Mayor of Devine. I was elected back in May so I’m glad you mentioned about the policy of being in compliance and so forth and so on. So what do you do if the tenant refuses to cooperate? I’ll give you a back story on that. You mentioned about the hangars. Our legal advice was to use imminent domain and buy the hangars from them. Now we own three hangars, and we spent a million dollars because they said we had to. The way it all came across was that we were going to have to pay back a previous grant, current grants, etc and not get any more down the road. So, we had to spend a million dollars plus interest of taxpayers’ dollars. Does that happen very often?” asked Mayor Cook of the supposed threat of losing grants.
“Not very often,” Benson answered.
“In a situation like that you have three tools a city or county that owns an airport that they have at their disposal to entice tenants or lessees to be compliant. One is building in language inside the lease.”
The other two tools involve legal action and documentation in good faith to get the leasee into compliance and Benson went on to explain more about those processes.
Leases and threats
Bad lease agreements for hangar space have left many community airports across Texas with no recourse in dealing with problem tenants, a top TxDOT aviation executive told the Devine Airport Board during a July 12 meeting.
“We have situations where airports 20 years ago entered into really, really bad leases with pretty bad language,” Halley said. “And they have absolutely no cause of action with their tenants. They can run wild.”
Prompting the comment was a review of the airport history leading to the city’s decision to purchase all the privately owned hangar space. That decision came in the wake of a threat from TxDOT officials in 2018 to suspend all current and future airport funding grants due to how some tenants were using hangar space.
Benson said the Federal Aviation Administration had an issue with “non aeronautical use” of one of the hangars leading to that tenant leaving the airport after their lease expired.
With regard to future self-sufficency, Benson said that general aviation airports generally have only two revenue streams available to them – ground leases and fuel sales.
“I have recently visited the airport for the first time and notice that you have a brand new fuel system and new lighting system,” Benson said. “So you are on the way to managing part of that revenue stream.”
As for leasing hangar space, TxDOT is available to consult on leases with regard to the rules and regulations that apply.
Halley said that a bad lease can leave a community trapped in decades of non compliance with aviation requirements.
“We see that across the state where a sponsor will enter into an agreement and it’s a non compliant agreement but they’ve executed it,” Halley said. “The private party has no legal incentive to get out of the agreement.”
Halley said that the situation that Devine found itself in is not common. Most communities protect themselves with language in the lease that requires the tenant to comply with all regulations that might jeopardize the airport’s compliance.
The next step is to carefully document the tenant’s activities that might violate the lease. TxDOT can issue the tenant a letter warning of possible violations but, as such, the state has no legal authority to force compliance.
That problem falls to the airport owner, Halley said. As long as the owner is making a good faith effort to move forward on compliance its grant standing should be safe, he said.
Money available for Devine
On the positive side, Halley said that TxDOT has $14,390 available for the airport.
“Devine, being a federally obligated, federally eligible airport, is allotted, for lack of a better word, an allowance under three different COVID relief bills,” he said.
That money is available to cover normal expenses at the airport such as salaries and fuel purchases. Any equipment purchased must comply with the FAA’s “Buy American” standards, Halley said.
Benson said the airport is also eligible for a $150,000 “non primary entitlement” or allowance annually. Airports typically roll three or four years of this funding together for a one-time use project.
Halley said the airport also has a second allowance option for $113,000 through an airport improvement allocation under the Infrastructure Investment Jobs Act subject to 10 percent in local matching funds.
The airport is also eligible for a competitive grant averaging $104,000 per airport, Halley said. That is based on a state apportionment of $19 million spread between 182 federally eligible airports in Texas.
Squires asked the TxDOT executives for guidance in developing an updated airport layout plan regarding best use of space available for hangars, taxi ways and parking, both aircraft and vehicle. Benson said the current plan in use is nearly 15 years old.
As for the economic future of the airport, Halley said to remember that Devine is in competition with other airports in terms of fuel, lease rate and convenience.
“The trip doesn’t stop at the airport,” Halley said. “Most people who want to do business in Devine are going to need to go into town, do their business, then get back in the plane and fly somewhere else.”
He suggested the addition of facilities such as a pilot’s lounge were travelers can shelter from the rain and heat and take a bathroom break.
Cook asked for suggestions regarding the 17,000 square-foot hangar recently acquired by the city. Halley suggested operating the space as a shared hangar maintained by a homeowner association-type group. Also, the space might be used for aircraft storage for travelers staying in the area overnight during hunting seasons and such.
Munoz recalls interest
Dora Rodriguez, interim city administrator, told the board that Joe Munoz, owner of M C Aircraft Refinishers, is no longer interested in leasing Hangar 10, the largest at airport, for his business. Munoz had offered between $1,000 to $1,500 a month for the property.
Cook told the board that the going rate for a hangar that size should be at least $7,000 a month.
Airport Manager position
In other business, board member Chris Yanta confronted District 5 Council Member Debbie Randall about remarks made with regard to board member Vickie Pumphrey qualification to continue to serve as airport manager.
During the June 20 council meeting Randall asked to have Pumphrey’s name removed from the airport board with the intention of hiring a new manager. City Attorney Thomas Cate advised the council that the agenda item referred solely to the advisory board and Pumphrey was sworn in.
Randall said she thought that since the various city boards were on the agenda that night it would be appropriate to discuss the airport manager.
“I’ve been asked not to bring it back up again until we have a city administrator,” Randall said.
View the meeting
You can view the entire meeting online on YouTube. It is titled Devine Airport Board July 12, 2023.
Lost emails
Officials stated there are two emails involving the threats of having to pay back grants if not compliant, but a copy of only one of the emails was available. The other email was not available to view at the meeting due to the loss of all city emails during a crash. It was thought to be from 2021, and Interim City Administrator Dora Rodriguez is now trying to track down the email.
Hap Squires had a copy of the 2018 email at the meeting. Rodriguez explained there was a second TxDot email which is the one the city lost when its email storage on Rackspace crashed.
From the files…Settlement reached
At the February 21, 2023 Devine City Council Meeting- In resolution of a long standing airport issue the council approved an $885,000 settlement agreement to acquire more than 21,800 square feet of hangar space. Three hangers (17,090 sq feet, 2,482 sq feet and one 2,284 sq feet) all currently owned by David Ehlinger, President of Aviation Fuels, Inc.
Cate told the council that based on advice from an outside firm hired by the city “this is the best course of action.”
“We were told by (Texas Department of Transportation) Aviation that we need to get control of the airport, we need to stop allowing people to have non-aviation activities there,” Cate said. “This is part of it.”
Devine sent Aviation Fuels an offer to purchase the hangers for $845,000 on November 2, 2022. Aviation Fuels agreed to Devine’s offer on November 4. Aviation Fuels had to vacate the hangars and relocate to another location by February 28, 2023, the relocation deadline.
Devine had signed a lease with Aviation Fuels on January 1, 2010 regarding the hangars.
The final settlement also includes nearly $40,000 in relocation funds for Aviation Fuels, Inc. Money to fund the purchase is from certificates of obligation issued in September 2021.
The council approved the agreement on a motion by Randall, seconded by Espinosa.
Cate also reported that two other hangars at the airport are up for sale.