County lawmakers struck a deal with an aviation support provider Monday, agreeing to reduce rent and extend a lease at Westchester County Airport in exchange for the company dropping an ongoing tax lawsuit.
Signature Flight Corp., which provides services such as fueling and parking, had sued in 2011 claiming it should have its property taxes exempted partly based on its location on county-owned land. The county, two local governments and a small public school district would have had to pay $3 million in back tax payments and lose additional millions in property tax revenue if Signature won its suit.
Signature”™s property at the airport is in the village of Rye Brook and within the town of Rye. The company pays taxes that mostly go to the village, Blind Brook school district and the county. County Legislator David Gelfarb, a Republican who represents the district where the property is located, said the deal benefited taxpayers and encouraged business growth at the airport.
“Most importantly, we have protected our municipalities and schools from what could have been millions of dollars in returned taxes,” he said. Signature also agreed to reimburse $160,000 to the county and other taxing entities for attorney fees and other legal costs.
According to officials, if the property became tax exempt, the village and school district would have both lost roughly $700,000 each year in revenues. Rye Brook, which has about 10,000 residents, has a general fund of slightly more than $19 million and the Blind Brook Union Free School District, which has an enrollment just above 1,000 students, is likely to have its next budget be in the neighborhood of $40 million.
The county Board of Legislators, at its meeting March 24, extended Signature”™s current lease through June 2026 with a rent credit for $2.8 million, or $200,000 per year. Signature”™s current 10-year lease dates back to 2006 and runs through 2016. The law adopted by the board said the lower rent served as an incentive for early renewal of the current lease.
Board Vice Chairman Jim Maisano, a Republican, said the deal was partly a reaction to evolving market conditions. “In a very complicated situation, this is the best we can get,” he said.
Yonkers Legislator Ken Jenkins, a Democrat, was one of four legislators who voted against the deal. He said reducing the rent translated to less revenue over the next 10 years and in turn, more of a burden on county taxpayers. He criticized County Executive Robert P. Astorino, a Republican who Jenkins said was favoring private enterprise over the public good by offering the rent credit.
Jenkins said he feared the deal would set a precedent in which the other airport service providers would now have a basis to seek their own lowered rents. “It”™s not $2.5 million, it”™s $5 million,” he said. “Quite frankly, I don”™t think it”™s the right thing to do.”
The board came close to finalizing the deal with Signature in December 2013 after the company met with representatives from the county, school and local governments. But just as the matter was to come up for a vote, the proposed agreement excised what was to many the essential provision: Signature”™s assurance not to pursue its lawsuit. Government, school and even company representatives said the proposed agreement was changed without their knowledge and there still remains confusion on the Board of Legislators as to who cut out that provision last year before it was added back this year.
As part of the deal, Westchester agreed to reassign two leases to Signature from other fixed base operators that have space at the airport. Avitat Westchester and Jet Systems”™ 10-year lease for Hangar E will be assigned to Signature, which is based in Orlando and owned by BBA Aviation plc. in London.
A second lease, for Hangar M, is a bit more complex. The existing 30-year lease was signed by Westair Aviation Services L.L.C. in 1999. Westair in 2007 became a franchise of another operator at the airport, Houston-based Million Air, which retained the right of first refusal to buy if Westair ever decided to sell. Westair had its lease transferred to Signature and now that the terms of that deal have been finalized, Million Air said it would exercise its right to have the lease assigned to them.
That deal is expected to close in April, according to Million Air spokesman Joseph Carlucci, who addressed the legislators”™ infrastructure committee in February. Million Air has also applied to the county”™s Industrial Development Agency for a $40 million bond deal to expand its hangars and upgrade its existing facilities.
Comments 1