ST. PETERSBURG — The operator of Albert Whitted Airport owes the city $61,000 in late fees, fines and interest on his monthly lease.
The city says Ron Methot racked up the penalties because he continually paid his rent late. He also owed the city for repairs and stormwater fees.
Methot blames the bad economy and the city's bad billing practices for much of the debt. He says he's not happy with the way the city staff has treated the airport and is asking that the $61,000 debt be forgiven.
"Our position really is that the city … has an obligation to be a good landlord and to try to do everything they can to help the airport and its operators be a success," Methot said. "The city should share some of that pain because I think they inflicted a little bit of that pain through poor management."
Methot met with City Council members during a meeting Thursday brokered by Mayor Bill Foster, who is trying to get the two sides to reach a compromise.
But council members couldn't get past this: Methot's company, Bay Air Flying Service Inc., intentionally made late payments on its monthly lease.
"You were still paying late," said council member Wengay Newton, "and I have a problem with that."
Methot has agreed to pay back $11,500 over 10 months to settle the stormwater and repair fees, a deal the council is still mulling. They asked Foster to negotiate a better settlement on the late fees.
But there isn't much time.
Methot's contract to run Albert Whitted ends Oct. 1. The city soon will seek bids for another five-year contract to run the waterfront airport. Methot's chances of renewing the contract will suffer, the mayor said, if his company still owes St. Petersburg money or is embroiled in litigation with the city.
"He's got to sweeten the deal," Foster said. "I don't think I'll get five votes without sweetening the deal."
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Albert Whitted Airport is in pretty good shape these days. It has a new terminal, a new restaurant, the operator is current on the lease and taxpayers haven't had to subsidize the facility in years.
"The airport's come a long way," said Dave Metz, downtown enterprise facilities director. "We've invested over $10 million in it."
But getting there wasn't easy, Methot said.
Bay Air Flying Service signed an agreement to run the airport in 2007. The new terminal was finished that year. But the long-planned restaurant, the Hangar Restaurant and Flight Lounge, didn't open until 2010. Methot said the city staff seemed to drag its feet while the facility was being upgraded.
He also told the council that the bad economy forced him to make late payments on the monthly lease. Confusing the issue is that the city had two different late periods: the contract said 15 days, but the city's invoices said 45 days. Methot chose to rely on the 45-day late period.
The city staff conceded Thursday those issues played a role in the debt.
"There was some inconsistency in the city's invoicing," Metz said. "Some of it is associated with economic circumstances."
The company's bill to the city was revealed in a March 2010 audit. Methot said he was blindsided by some of those items, like an $18,000 stormwater bill (the city has cut it back to $9,000.) The city also accepted his late monthly payments, he said, but never mentioned that he was incurring penalties.
"Certainly if I had known I'd be facing a $61,000 charge in late fees," Methot said, "I would have scrambled to get things done."
For each $48,000 monthly payment that Methot's company missed, the city charged about $6,000 in penalties and escalating interest.
Council member Karl Nurse said those penalties were way out of line.
"The rates we charge for late fees might be considered predatory lending because they're so high," Nurse said.
The city staff also had issues with Methot splitting his company into three corporate entities after signing the 2007 contract. St. Petersburg Flying Service Inc. now operates the airport. St. Pete Avionics installs airplane radios and avionics, and Bay Air Flying Service provides flight instruction.
Methot said the division was necessary. Airport operations are very litigious, and he wanted to protect his other businesses that have nothing to do with running the airport.
Council member Jim Kennedy found it troubling.
"You enter into a contract with one business," he said. "Then immediately afterward, the party you think you have a relationship with creates two new businesses … it puts up all kinds of red flags."
But Nurse found the explanation was logical: "It's much ado about nothing."
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Council member Bill Dudley seemed exasperated by the lack of communication between the city staff and the airport operator. Both sides talked of letters that weren't followed up on and other missed signals.
"My suggestion is you need to have a regular meeting so everyone is on the same page," Dudley said.
Council member Steve Kornell said that bad communication isn't a good enough reason to waive late fees ultimately owed to the taxpayers.
"I can't write my mortgage company and say if they don't respond my mortgage will be reduced," he said.
But the mayor warned the City Council and Methot that they should settle the dispute themselves.
"We either resolve them," Foster said, "or we let somebody wearing a robe resolve them. It's just a matter of what's your pain threshold."