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New airport, new rules?
January 24, 2011
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  • By Brian Ahern

    January 16, 2011

    ST. GEORGE – When the new St. George Municipal Airport opened last week, it did so without dozens of general aviation pilots who still refuse to sign a hangar lease agreement they say is unfair.

    While they continue to negotiate with the city over what they perceive as an unjust agreement that grants the municipality absolute power over hangar property, the pilots say the presence of one airport leaseholder shows evidence of a double standard on the city’s part.

    In November, the city signed a 40-year lease with Direct Jet Center LLC to provide fuel and other services to planes at the city’s new airport, including planes in the SkyWest Airlines fleet. Though Direct Jet founder Joseph Venuti also led a similar company at the old airport, a United States bankruptcy court now owns half of that business. Given the financial issues, the pilots wonder why Venuti’s company was allowed a 40-year, fixed-operator lease while they still struggle to obtain what they consider satisfactory hangar agreements.

    “I think it’s inconsistent with their strict standards,” said pilot Gordon Rock. “I find it surprising and confusing. I doubt we would qualify (in that situation.)”

    In the view of the pilots, the new lease policy allows the city too much control over what the pilots consider to be their private hangars. Apart from the strict guidelines in obtaining the lease, the pilots have taken issue with the city’s “sole discretion” when it comes to accessing the hangars, and the lease’s restrictions on pilots being able to do things such as work on their planes in the hangars.

    The pilots say it’s a big change in policy from their time at the old airport, and they believe the city’s handling of other leases at the new facility shows there are multiple sets of rules.

    St. George City Attorney Shawn Guzman said the city was determined to give many of the operators at the old airport a chance to move to the new facility. A personal bankruptcy, such as in Venuti’s case, Guzman said, wouldn’t automatically disqualify someone from obtaining a lease.

    “We didn’t enter into a lease with a person. We entered in as an entity,” Guzman said.

    Venuti said that entity, Direct Jet Center LLC, was created following his bankruptcy. Though half of his previous company, Direct Aviation, is now in the hands of the court, he said the new company will have no problems providing the services detailed in its lease.

    “I spent a lot of money with attorneys making sure this was set up right,” he said. “They’re completely separate. None of my assets are going to the new airport.”

    Though the bankruptcy doesn’t appear to affect the new company, Airport Users Association spokesman Alan Koharcheck, who represents the general aviation pilots dealings with the city, said he is puzzled.

    “Does that mean he has special treatment?” he asked. “It’s very frustrating when we’ve worked so hard.”

    Rock, meanwhile, questioned Direct Jet Center’s future as one of the airport’s two providers of aviation fuel because of Venuti’s financial situation. The other provider, Above View, has a similar lease to provide many of the same services, though on a smaller scale and with a facility more than six times smaller than Direct Jet Center.

    “An airport without a functioning FBO (fixed-base operator) is not an airport,” he said. “If the city is going down a path that does not provide for functional FBOs, then it’s going to be a marginal airport at best.”

    The financial history of Venuti’s company at the old airport, Rock said, appears to show the city is gambling with the future.

    St. George Finance Director Phil Petersen confirmed that Venuti’s previous company was delinquent on payments of $979 per month over the past three months and at other times during the old lease as well.

    “Mr. Venuti has struggled a bit over the years,” Petersen said.

    Though a larger facility at the new airport means the new lease is 12 times as expensive, St. George Public Works Director Larry Bulloch doesn’t foresee any problems with Venuti’s company fulfilling its obligations.

    “He’s been operating at the airport for many years, and we had every reason to believe he could perform,” Bulloch said. “We will sign a lease for anyone who wants to provide services, and if they don’t provide services then the lease will become null and void.”

    Guzman added the city wouldn’t enter into any leases lightly.

    “Obviously, the lease has protections with the city if he is unable to perform,” Guzman said. “The council was adamant that they give those operators of current FBOs the opportunity to provide services at the new airport.”

    Those services also will continue with SkyWest Airlines.

    “We’ve worked with them closely over the past few weeks to make sure the fuel transition to the new airport is seamless,” said SkyWest spokeswoman Marissa Snowe. “We certainly do business with credited companies. It’s not affecting our operations.”

    As for talk of double standards, Guzman said he didn’t believe there was any evidence of a different set of rules.

    “I don’t see a difference there at all,” he said. “(The FBOs) have had to jump through as many hoops as anyone else did.”

    The pilots, however, still aren’t convinced.

    “You have to supply them with financial records, and they have this right to approve or disapprove,” Koharcheck said of the city. “It makes us nervous that the city uses this discretion to treat people differently.”

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