Leases for S.C. Airport
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GEORGETOWN -- Sussex County Council wrangled with a series of lease agreements for the Sussex County Airport at its regular meeting on Tuesday, March 12, 2002.
The lease that created the most controversy was for the restaurant and kitchen area in the new terminal building.
Council approved the $1,400 a month, five-year lease with Jimmy Tenefloss, the owner of the popular Jimmy's Grille restaurant in Bridgeville, by a 3-2 vote.
Council president Finley B. Jones and councilman Dale Dukes voted against the lease for Jimmy's Flying Grille due to concerns over a clause in the lease that will allow Tenefloss to apply for a liquor license in the restaurant.
Most of the controversy, however, centered on the county's commitment of $60,000 for equipment and furnishings for the restaurant and the potential use of an adjacent conference room for overflow seating for the restaurant without compensation to the county.
County Administrator Robert L. Stickels said the county would open the bidding process on the restaurant's equipment and furnishings on March 22. He said Tenefloss would be responsible for any costs over $60,000. Tenefloss will also pay for the restaurant's electric and telephone service.
Councilman George Cole questioned the county's $60,000 expenditure for the equipment at length, asking how ownership of the equipment would be determined if the cost goes over $60,000 and why the county wasn't requiring a security deposit to cover potential damage to the equipment and furnishings. He also asked why there was no penalty should Tenefloss abandon the lease before it expires.
Cole recommended that a certain amount of money be put into an escrow account to cover any potential damages beyond normal wear and tear.
"We're asking the taxpayers of this county to pay for $60,000 worth of equipment, and if the operator is abusing the equipment, we should maybe have some money in escrow," said Cole.
Stickels asked Cole, a landlord with his own rental properties, if he required that of his own tenants.
"Yes, we do," Cole said.
David Baker, the county's chief financial officer, told council that the lease agreement contains language requiring the tenant to pay for all maintenance, repairs and improvements to the property, and County Solicitor Eugene Bayard said the county's insurance policies would cover any damages, as well.
Bayard added that it wasn't unusual for security deposits to not be required in short-term commercial leases. Masten said the tenant would also be required to have liability insurance.
Cole also expressed concern over the adjacent conference room, which would be separated from the restaurant by a solid wall with two doors.
Cole said Tenefloss could conceivably use the conference room for overflow seating without having to pay for it because the lease contained no stipulations for the conference room.
Harold Truxon represented Tenefloss, who was out of town, at the meeting. Truxon said his understanding was that the lease was for the restaurant and kitchen areas only, but that he believed it was likely that the restaurant would be successful enough to eventually require more than the 1,350 square feet in the restaurant.
Cole then asked again what would prevent Tenefloss from using the conference room, and Stickels said, "Why would you want to prevent that?"
"Because I would want to get rent for that," said Cole. "It looks like a $5,500 gift here (estimated value of rent for conference room space). This would be a revenue generator for Mr. Tenefloss, so why are we making this available to him (for free). We ought to be getting a revenue stream for this space."
As for the concerns over alcohol, Stickels said the lease would not allow Tenefloss to open a bar or tavern in the restaurant.
Still, Dukes said he couldn't vote for a lease that allowed the serving of alcohol in a county-owned facility.
"I think it's a good lease, but I still have problems with the alcohol," said Dukes. "I don't know how to vote 'Yes' on it and follow my conscience at the same time."
In the end, council, at Councilman Lynn Rogers' suggestion, decided to approve the lease for the restaurant and kitchen areas only with the understanding that if Tenefloss wanted to use the conference area for overflow seating, he would be required to enter into a separate lease to do so. "We'd lock the doors (to the conference room) until we had a separate proposal for the conference room," said Rogers.
At the request of Truxon, council also agreed that Jimmy's Flying Grille would be the only vendor allowed to provide food for any events held in the conference room.
In related matters, council approved the assignment of two leases on the airport's old terminal building and the grounds the new hangar is on to Georgetown Air Services LLC from the Harvey and Vera Patrick Foundation and Sussex Aero Maintenance. The terms of the leases will not change. Georgetown Air Services will oversee all aspects of the airport's activity.
In addition, council approved several leases for different parts of the airport's new terminal building to Georgetown Air Service. Those leases, for spaces of 598 square feet, 375 square feet, and 365 square feet, will be for five years each at $13,020 per year.
Steve Masten, acting director of the Sussex County Economic Development Office, said all facilities at the airport except for the new terminal building have been leased. When the new terminal building is completely leased, the total rent for that facility will be $32,240 annually.
Cole asked if those leases would cover the county's expenses for debt and maintenance on the new terminal building. Councilman Lynn Rogers said airports traditionally do not make money but are intended, instead, to provide an economic stimulus with jobs, airplane fuel sales, and tourist activity for major events such as the NASCAR races at Dover Downs International Speedway.
Councilman Vance Phillips questioned why the county would only rent the facility for what amounts to $10 per foot because it "probably has a lot of advantages that other $10 a foot facilities in Georgetown do not have."
Dukes answered, saying that the number of jobs in the airport industrial park has doubled in the past 10 years. Stickels concurred, citing the $14 million payroll from the various companies at the airport.
Cole was unswayed, however.
"I don't mind if we break tradition and start making money or at least break even," he said. "I think this lease is better, but I would rather see three years (instead of five years). I think in the future, as we have an opportunity to renegotiate these leases, that we need to start tightening up these terms."
Dukes said he believed the leases were as good as the county could hope for. "We've got to leave it so (Georgetown Air Services) can make money or it won't want to be out there in five years."Early Sewer Deal Approved ...
Sussex County Council approved a deal to allow the proposed Bethany Lakes subdivision on Cedar Neck Road north of Ocean View to build its own central sewer system before construction begins on the Cedar Neck Sanitary Sewer District in two years.
Council rejected, however, a clause negotiated by the county's engineering department with the developer, Caldera Properties, that would have required the county to pay the $58,000 to redesign the county system to accomodate the Bethany Lakes' project.
County Engineer Michael Izzo told council that the engineering department felt the $58,000 redesign fee was a good deal for the county since the developer would be paying $700,000 for a pump station and full-size force main required to serve the development and hook into the Ocean View Expansion of the Bethany Beach Sanitary Sewer District.
Izzo said the redesign fee had become a stumbling block in the negotiations because Caldera Properties didn't want to pay it.
Councilman George Cole disagreed, saying, "I don't see why we should absorb the $58,000. If they want to move faster (than the county's plans), let them pay for it."
Cole's fellow council members agreed and voted 5-0 to approve the plan but with Caldera Properties paying the $58,000 redesign fee.In Other Business ...
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