Clinton County Port Authority negotiating lease

Also discussing operations, revenue sharing, cost sharing

By Nathan Kraatz -

WILMINGTON — The Clinton County Port Authority authorized its staff to negotiate a lease agreement with LGSTX Services Inc. for a building at the port-owned Wilmington Air Park.

The lease, if negotiated as authorized, would let a 57,000 square-foot building for one year with two options to extend the lease for a year.

LGSTX uses the building for its “Aerosmith” project and has signed a non-disclosure agreement protecting the identity of its client. LGSTX officials have said it’s a small cargo operation.

The port previously authorized Executive Director Kevin Carver to negotiate a seven-month lease in August, but Carver said the terms changed and he wanted to present those different terms to the port.

One of the terms changed include a revenue and expense sharing agreement, which Carver said will no longer be included.

That agreement, he told the board, was recommended by the port’s attorneys to set up “boundaries on the amount of fees coming in and the amount of expenses going out.”

Instead, Carver said, “It’s just a flat lease” and a license for space on a ramp.

LGSTX is already using the building despite not having a lease. Carver said the port has been working cooperatively with LGSTX in good faith to get the building ready and operating for the Aerosmith project.

The port is also paying LGSTX for improvements to the building that aren’t specific to the operation within the building. For instance, Carver said, the truck docks, plumbing and electrical system needed repairs.

Related to the lease, the port leased its de-ice building to LGSTX for $0.

Carver told the News Journal that the building is integral to de-ice operations, which he said LGSTX is paid to do for the air park.

Laake questioned whether it was appropriate to lease the de-ice building when an amendment to the services agreement, which was pulled from the agenda, would have defined the use of that building. Carver said he was confident an agreement would be reached defining the building’s use. He said it was important to have the de-ice building ready this month because de-ice operations may be necessary when it frosts.

Carver also told the News Journal LGSTX will operate a treatment plant and perform environmental testing. The port also agreed to pay half the cost of repairs to equipment in the building.

Also pulled from the agenda was a revenue and expense sharing agreement with LGSTX.

Rowsey said it was pulled because LGSTX asked for the building’s lease not to be connected to the Aerosmith project.

“That disconnect then also affected the operations and expense conversation we had,” Rowsey said. “That conversation was changed over time and probably will continue to change as activity increases and dynamics change.

“We’re going to have to come back with a more detailed agreement or more final agreement on the revenue and expense sharing,” Rowsey continued.

The port also:

• Received a fiscal report from board secretary Larry Laake. Laake said revenues were balanced with increases in fuel fees and air park activity. Payment disputes with TriJet Global Air, which the port has sued, and Sustainable Carbon Nanotechnology and Engineering, which is no longer at the air park, negatively impacted revenues, according to port officials. Legal fees increased, too.

• Approved a $23,000 change order with Pettibone Concrete Construction for work on taxiways at the air park. The concrete’s depth was underestimated in the initial bid, so Pettibone had to mobilize different equipment after discovering the error in addition to other unidentified, minor repairs and additional rebar. The additional $23,000 brings the project cost to $269,000, most of which is paid for by a state grant. Carver said the staff would attempt to avoid future change orders, adding that the port is using old plans and memories about the air park to make its estimates.

• Approved a one-year agreement with United Health Care to provide health insurance. Carver said the insurance is similar to the one offered by the county that used to be available to port employees. Port member Brian Smith, who is also president of Smith-Feike-Minton Insurance, said the agreement was the most economical at $37,750 annually of all options for health, life, dental and vision coverage similar to what was offered.

• Carver told port members the air park would need infrastructure upgrades, and encouraged them to aggressively pursue grants but prepare to pay for those upgrades themselves.

“After I’m gone, this board is going to be looking at substantial improvements to the aviation infrastructure,” Carver said. “Whether it’s state funds or federal funds or port authority funds, there are going to be substantial projects come down the path that you’re going to have to wrestle with.”

Carver went on to say he doesn’t believe the state and federal government would be enough to address the air park’s deteriorating infrastructure.

• Purchased hardware to expand its communications abilities. The hardware would not exceed $25,000, and the installation of it no more than $7,000. Carver said many of the relatively smaller tenants at the air park have requested help expanding telecommunications. Carver said the port anticipates charging a fee to those tenants that need better access.

Another proposal from Time Warner to expand Internet access has yet to be received by the port, according to Assistant Director Beth Huber. David Lotterer, the port’s real estate agent and a senior associate of Jones Lang LaSalle, said tenants frequently ask about telecommunications and some even bring their own Information Technology staff.

• Huber and Carver told the board that the Center for Urban and Public Affairs, which Carver said hopes to partner with the Ohio Attorney General’s office to create forensic labs across the state for use by state and local law enforcement. The Wilmington Air Park is being considered for one such site. The center is housed at Wright State University.

• The port also met in executive session, citing a discussion about litigation with its attorneys and to consider information that is not a public record, an exemption specific to port authorities.

Reach Nathan Kraatz at 937-382-2574, ext. 2510 or on Twitter @NathanKraatz.
Also discussing operations, revenue sharing, cost sharing

By Nathan Kraatz