In a Boon to Flagler, National Guard Will Bring “Hundreds of Troops” to County Airport in Long-Term Lease Agreement

In what should prove to be a boon to county government and the local economy, the Florida National Guard is about to sign a long-term lease agreement that will bring “hundreds of troops” for training, extensive equipment for storage, and administrative offices to the Flagler County Airport, according to the county administration.

The deal will bring a stable occupant to a large building the county has had trouble keeping occupied, while having itself to pay its mortgage in the meantime. It also means that all three large county-owned buildings at the airport that had once been vacant are now filled with stable, paying tenants. “You couldn’t ask for a better tenant,” County Administrator Craig Coffey said Monday.

The deal with the Guard, yet to be announced to the Flagler County Commission, “evolved in the last couple of months with staff,” Coffey said. “We went back and forth with them, we met with all the folks from the general on down.” The county commission is scheduled to approve the deal at its meeting Wednesday.

The Guard will lease a 19,100 square foot building that the county built in 2004 for Embry-Riddle Aeronautic University. The flight school had signed a 10-year lease to use the building for its  Commercial Airline Pilot Training program (Hence the building’s informal name, “Capt”), but Embry-Riddle never bought the more than 100,000 gallons a year of fuel it had pledged to buy, and the program itself quickly fell apart.  Embry-Riddle bought its way out of the lease with a one-time, $900,000 payment to the county. A provision in the loan agreement forbade the county from putting the money down against the $1.14 million it still owed at the time, so the money went into the airport’s fund.

This year, the county is paying $111,400 for the building ($71,700 in principal, $39,700 in interest). The Guard will pay the county a monthly rent of $15,185, or $182,220 over the course of a year, yielding a net profit to the county. The county expects improvements to be completed by Nov. 1, and the Guard to move in only then.

The Guard has asked for improvements to the building to accommodate the particular needs of the unit, including remodeling the bathrooms, security fencing, carpet replacement, painting and outside lighting.  The county estimates the improvements will cost $219,700, which the county’s airport fund will pay for initially. But the cost will be added to the Guard’s monthly rent, and spread over the next 24 months, thus increasing the monthly payments to $24,340. (The Guard’s public affairs office in St. Augustine did not respond to a call Monday morning.)

The Guard’s move into the Capt building is an entirely different operation from the Guard’s plan for a $21 million, 80,000-square foot armory at the opposite, southern end of the airport. That plan has been in the works since 2006. It would move a 21-man air-defense artillery battalion from Daytona Beach to the airport. But year after year, Congress has failed to appropriate the money for construction. That plan, somewhat tarnished by political infighting between Palm Coast and the county in 2010, is still on hold.

For the county, getting the old Capt building occupied with a solid, reliable tenant, as the Guard is expected to be, will end an unhappy history of bad deals, disappointments and vacancy. After Embry-Riddle left, the building was briefly leased to another flight school in 2008, but that school was gone before a year’s term. In 2010, the county signed another agreement with another startup called Microhose, a private company that sold itself to the commission as an innovative company that would turn its operation at the airport into a fast-paced, lucrative manufacturing company. The company’s history was questionable. Microhose vanished before it started.

Next came Outreach Academy, a charter school specializing in Russian-language education and the arts. The school board had approved the charter school based on the school’s pledge that it had secured the facility at the airport. But the deal was hurried, and the school’s financial background was not thoroughly vetted. The county and Outreach Academy signed a deal in early July 2012, for $13,500 a month (a little less the first three months), just weeks before school was to open. Just before that Christmas, the school announced it was closing.

None of those issues are expected to arise with the National Guard. The agreement with the Guard includes four potential five-year renewals of the lease. The county  will provide all lawn and building maintenance, including air conditioning servicing and all outside lighting. The county’s custodians will vacuum the building’s carpets twice a week, supply all cleaning products, clean the bathrooms, provide all inside-trash and pest control services.  The Guard will pay for its own utilities and trash pick-up.

The same arrangement applies to other buildings the county leases at the airport, including the former Ginn building that the county built for the now-defunct corporation in 2004, for $2 million. Ginn went bankrupt and left the county holding the mortgage to that building, which is now occupied by the Federal Aviation Administration. The county also built a smaller building for a company called Cakes Across America, only to be burned by that company, too, in 2010. But the county got new tenants, including a law firm and a car rental agency—and paid off the building, which now generates $4,200 a month for the airport fund.

In all, the airport has seen a 180-degree turnaround in fortunes from the grimmer days in the aftermath of the housing boom. “At one time we were completely vacant with all three buildings, and this will bring it t to fully leased,”  Coffey said—a relief to the county commission, but also a benefit to the local economy. Meanwhile at the south end of the airport the access road from Belle Terre Boulevard is under construction. That will spur the development of Aveo Engineering’s buildings at that end of the airport. A separate contract will bring utilities, from Palm Coast, to that end of the airport. Palm Coast already provides water and sewer services to the airport. That had been acontentious issue in the past between city and county, since city policy calls for annexation of any properties that depend on city water and sewer. But Coffey said a new interlocal agreement between the two government should put that issue to rest. “We worked through that,” Cofffey said, citing the agreement. “We’re hoping we won’t have a problem.”