Government and Travel & Tourism

FAA finding lands in GFIA’s favor

Government agency rejects tenants’ complaints across the board.

April 5, 2013
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A division within the Federal Aviation Administration exonerated the Gerald R. Ford International Airport Board last week by dismissing a complaint made in November 2011 by two longtime tenants, and it did so with prejudice — meaning the plaintiffs can’t file another case based on the same claim.

Northern Air and Grand Rapids Air Center, which operates Rapid Air, are two full-service, fixed-based operators at the airport that disputed votes the aeronautics board took when it approved a location for a new FBO: Rothbury Executive Air.

As a result, the plaintiffs, or in this case the complainants, filed a formal grievance with the FAA, known as a Part 16 complaint.

They argued the site awarded to Rothbury violated the airport’s 2004 master plan; they also claimed the board’s then-chairman, Joseph Tomaselli, cast a vote contrary to the board’s standing rules. That vote gave the decision a two-thirds majority, which led to Rothbury getting a 10-year lease with three 10-year options and a variance from the master plan for its site.

The plaintiffs argued the rules only allowed a chairman a vote to break a tie or to create one. In this situation, the chairman’s vote created a 4-2 decision in favor of leasing space to Rothbury rather than resulting in a 3-3 tie on the resolution.

However, Randall Fiertz, who directs the FAA’s Office of Airport Compliance and Management Analysis, found the airport board did not violate a single financial issue in the plaintiffs’ complaint. All six of his findings were based on U.S. Code 49, with most being rooted in sections 47107 and 47105.

Had the ruling sided with Northern Air and the GR Air Center, GFIA could have lost up to $43 million in federal aviation funds this year.

Airport board chairman Roger Morgan told the Business Journal last week he was glad to put the matter behind him.

“The ruling solidified where we wanted to go and where we want to take the airport. Unfortunately, we’ve had to endure this distraction for a long time,” he said.

“Looking back on it, Rothbury met or exceeded all of our requirements to approve their request, and I think we would have been in a more exposed position with the FAA if we had denied their request. We tried to do what was best for the airport and the business community. I think now we can move along and move forward.”

Morgan said there are many other issues the airport board needs to turn its attention to. “We have to focus on the consolidation going on in the industry, which has become more competitive. We have a lot of regulatory issues we have to deal with and a deicing issue we need to solve. We need to look at combining our check points and re-doing our terminals. So we have a lot of things on our to-do list that we need to get focused on,” he said.

The FFA office’s 71-page ruling allows the plaintiffs to appeal the decision within 30 days of the ruling.

“Northern Air Inc. is reviewing in detail the Federal Aviation Administration’s determination outlined in the FFA letter dated March 28, 2013. At this time we have made no determination regarding filing an appeal,” said Charles Cox, CEO of Northern Air, in a statement.

“No matter if we appeal or accept the FAA ruling, Northern Air Inc. and its sister companies, The Company Jet and Northern Jet Management, will continue on its clear path to expand its service throughout the Midwest region,” Cox added.

Prior to the FAA decision, Kent County Circuit Court Judge James Redford ruled against the tenants nearly a year ago. At a show-cause hearing held last April, the tenants argued that the board’s counsel instructed Tomaselli to cast two different votes at meetings held eight months apart, after he initially abstained both times.

The plaintiffs claimed those votes led to Rothbury’s lease in an area they said the airport’s master plan exclusively reserves for private corporate operations. Northern Air and GR Air Center argued Rothbury offers a charter service for freight and business travelers.

Redford dismissed the complaint and entered a declaratory judgment in favor of the board. The justice cited seven cases in Michigan law on which he based his ruling.

Northern Air is the largest tenant at the airport with 110 employees and has been there since 1963. GR Air Center has been a tenant for at least 25 years. The two compete for business.

Rothbury Executive Air is a Muskegon-based company that plans to invest $6.5 million into its site and add some amenities currently not available at the airport. Rothbury also will pay annual rent and fuel fees of $155,000 to the airport. The company is expected to begin its build-out shortly and hopes to open in the fall.

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