It’s a one-runway municipal airport named after a beloved former congressman. It has an aviation training academy and a lot of potential to attract suppliers to the massive Airbus assembly operation in Mobile.
Yet the H.L. “Sonny” Callahan Airport has become a political football in Fairhope.
• Mayor Karin Wilson is fighting with the City Council and the Airport Authority to get control of the airport for the city, focusing on a multi-million-dollar debt incurred by the authority but being carried by the city.
• A local blogger, Paul Ripp, has raised a ruckus about the award of a contract for a new hangar to an authority board member. While the board maintains the award was validated by the Alabama Ethics Commission, Ripp says he has filed complaints with the state Attorney General’s office, the United States Attorney’s office in Mobile, the 28th Judicial Circuit and the FBI.
Reams of documents have been collected, posted and interpreted in different ways. Public meetings have turned into shouting matches. Last week Wilson compiled and handed out a timeline of events to the authority and members of the news media before posting about it on her Facebook page. On Friday the Airport Authority published its own timeline of events with the help of an attorney hired specifically because of Ripp.
In trying to follow recent events, it’s important to keep in mind that there are two different controversies involving the airport. Also, readers who want more information may peruse different points of view and related documents at these locations in cyberspace: www.fairhopeairport.com; the Facebook page of Mayor Karin Wilson of Fairhope, Alabama; www.rippreport.com; the Facebook page of The Ripp Report; and Dean Mosher’s YouTube video.
The bond issue
Wilson took office Nov. 7. On Nov. 23, she notified the Airport Authority that she wanted to exercise a clause in a funding agreement between the city and the Airport Authority that let the city take back land purchased by the authority because it had not paid off by March 2012 the principal on an $8.85 million loan.
Wilson had been asking questions since her election that August over longtime incumbent Tim Kant. Some $7.4 million remains to be paid. She also let the authority know she wanted to be a part of any refinancing process.
At a town hall meeting recently, Wilson said nobody knew the city was carrying the debt and there was no plan for paying it off.
“We have been paying the airport more than we have appropriated for our five public schools total. That’s a problem,” she said. Her announcement at a council meeting that the city would take the land, “was something I wanted to do to wake everybody up.”
But the debt shouldn’t have been a surprise, said Chuck Zunk, former chairman of the Airport Authority.
Until 2007, Zunk said, the city owned the airport. A board functioned as an advisory committee, and Zunk was a member. The owner of a 257-acre horseshoe of land surrounding the airport approached Kant and then-Councilman Mike Ford about whether the city was interested in buying the property.
The land on the east side of the existing airport was ideal for expansion, Zunk said.
“The land on the west side was land that the airport didn’t really want. But the city wanted it because the mayor and the council at that time saw that the land could eventually be used for an industrial development area that they had been planning for some time, and never had been able to put together the money to purchase the land.”
The formation of the Airport Authority was “a means to an end,” Zunk said. The authority, a municipal corporation, bought the land and the city guaranteed the loan. Although Wilson now says the money owed makes up 21 percent of Fairhope’s debt service, Zunk said the original idea was to keep the money off the city’s books.
“There was hardly any secret about it. It was all done in council meetings and a lot of discussion about it was made,” Zunk said.
The east side of the property is being developed through a Federal Aviation Administration grant program, he said, and over time the FAA will reimburse the airport for the land.
“The only real issue is the land on the west side, which has not developed as quickly as anybody thought, primarily because of the depression we went through in 2008, ‘09 and ‘10.”
Personally, said Zunk, he’s not concerned about who owns the land on the west side. “If the city wants it back and is willing to take the debt along with it, then that’s certainly fine,” he said. “There’s nothing wrong with that. The land on the east side is committed to the development of the airport and will be paid for anyhow by the federal government.
“Again, I’m not sure why all the argument’s going on. It’s an argument about nothing.”
What disturbs Zunk are questions being asked about his own departure from the Airport Authority board in 2015.
Of seven board members, Zunk and two others announced their intentions to resign in March 2015. They originally gave six months’ notice, although they actually left the board a few weeks earlier. At about the same time that summer, the attorney for the authority, David Bagwell, retired from practicing law.
“The way it’s being portrayed is that it was a sudden and secret mass resignation, which is just simply not true,” Zunk said. Zunk, the chairman, had been on the board since 2007, devoting 20 to 30 hours a week to a volunteer job. He and his wife wanted to spend time with his grandchildren, who live out of town.
“We had accomplished quite a bit,” Zunk said. “Most importantly, we had accomplished finally finishing up the vocational school, which took a lot of energy out of everybody. We thought it was time to retire and so we gave everybody six months’ notice.”
Wilson’s attempt to get control of the airport land failed when the City Council refused to authorize the takeover. Since then she has continued to object to how the Airport Authority has been handling the refinancing process. She is also preparing to nominate three replacements for three board members whose terms expire March 1, and has threatened to remove current chairman Joe McEnerney “for cause,” though it is unclear whether that is possible.
Wilson did not respond to a request for an interview for this story.
Based on her own timeline and Facebook posting, Wilson is highly critical of McEnerney’s handling of an initial RFP, or request for proposals, from banks interested in refinancing the roughly $7.4 million debt. She has said that McEnerney allowed the initial proposals to expire and cost the city money.
“I was not aware of these expirations until I started to research the details more when accusations surfaced that I was responsible for costing the city money with delays,” Wilson wrote on Facebook.
Board member Vincent Boothe has said the mayor delayed the process and cost the city some $160,000 because of rising interest rates. Wilson has vehemently denied being responsible.
McEnerney said, “I know it wasn’t my fault. My board members know it wasn’t my fault.”
The chairman said he understands Wilson wanted to be included in all consideration of refinancing in August, September and October, but she had not yet taken office.
“Mayor Kant was the mayor until November. We worked with him to get this done,” McEnerney said.
Airport board meeting minutes for November reflect Wilson asking a board member to postpone a vote on the bond issue, he said. A few days later, he said, he received an email from City Attorney Marion “Tut” Wynne saying Wilson would assume control of the land on behalf of the city. For those reasons, McEnerney said he felt he couldn’t move forward with the RFPs.
Last week, the Airport Authority selected Bryant Bank to handle the refinancing of $7.4 million at a fixed interest rate of 2.02 percent for seven years. McEnerney said the RFPs that expired in November offered lower interest rates.
The bid and the blogger
In sorting out the conflict between the Fairhope Airport Authority and blogger Paul Ripp, it’s easy to get lost in the details of hangar leasing and aviation fuel costs. The basic question is this: Was it OK to award the contract to build a new hangar to an authority board member?
The Alabama Ethics Commission says yes. Ripp says no.
In the opinion of the Ethics Commission, as long as board member Ray Hix won the lease for his company without having inside information about the bidding process, it’s OK. The commission has noted that Hix did not attend meetings when the lease was discussed and did not vote on it. It has consistently issued similar opinions involving other agencies, including a ruling that a county commissioner could do business with the county.
Ripp, a frequent critic of Fairhope government who publishes The Ripp Report online, insists that the Ethics Commission did not have all the facts when it issued its advisory opinion early last year. He maintains the lease should never have gone to a board member and that City Council President Jack Burrell, who is the council’s liaison to the authority and helped review the bids, should not have been involved.
Burrell has repeatedly denied doing anything that was inappropriate, as has McEnerney. Ripp has done extensive research into authority records and compiled a thick stack of documents. So far, the commission and the Attorney General’s office have acknowledged receiving his latest complaint, Ripp told Lagniappe.
Also asking questions has been Dean Mosher, an artist and historian in Fairhope who took to YouTube with several specific inquiries for the authority. That video has been viewed around 1,800 times. Meanwhile, on the grounds that an email sent by Ripp could be interpreted as a threat, board members voted to hire an attorney to investigate Ripp.
“The Ripp Report has no confidence in the Alabama Ethics Commission and appeals to your authority for an independent investigation in what we allege is criminal activity,” Ripp wrote in his complaint.
A couple of private hangars are under construction at the airport. One of them is being built by Mid-Bay Air LLC of Daphne, of which Hix is part owner with Fairhope Municipal Judge Haymes Snedeker.
Hix was appointed to the Airport Authority in April 2015. Though both Hix and Snedeker are lawyers, Hix said, they are mainly involved in development and commercial construction on a national level. Hix said he personally has been flying planes since 1994.
With 40 employees working around the country, Hix said having private planes makes Hix Snedeker Companies more competitive and allows the employees to stay located in the Daphne-Fairhope area. The hangar will hold three planes, one belonging to the company, a second to another owner and a third that was once owned by the company and in which a half interest is being bought back.
Hix said he’s well aware of the allegations that have been made but that he moved to the Eastern Shore after graduation from law school and started the business from scratch. “The notion that I’m some sort of connected individual — I’m not from here,” Hix said.
A previous negotiation with another company to build the hangar had fallen through. In September 2015 the authority decided to send out RFPs for the hangar and a fuel farm. The winning bidder would construct the hangar and pay a ground lease fee for some 25 years before the hangar itself reverts to the ownership of the authority.
Mid-Bay Air was one of three bidders. According to the authority’s overview published with its timeline, Hix did not attend the September meeting.
The bids came in within one-half cent of each other per square foot. The site is about 24,600 square feet. At that point, the bidders were asked for more information on their proposed ground lease rent, their estimated annual aviation fuel usage and their estimated hangar and fuel farm construction cost.
“We said, look, this isn’t really what makes the airport money. What makes the airport money is the selling of fuel,” McEnerney said. “Who sells the most fuel and what is it going to cost you to build the hangar?”
The airport charges an aviation fuel flowage fee of 7 cents per gallon. Mid-Bay said it expected to use 100,000 gallons annually, far more than the other two bidders. It also offered the highest construction costs.
The fuel estimates from the other two bidders were 45,000 gallons and 25,000-40,000, respectively.
The authority appointed Burrell and Boothe as an ad hoc committee to review the bids. They did so over lunch at Buck’s Diner. Burrell reduced Mid-Bay’s fuel number by 15,000 gallons to be conservative, but when the numbers were crunched Mid-Bay was still 21 percent higher than the next highest bid, according to the timeline.
But the contract for the hangar lease does not require Mid-Bay Air to buy so much as one gallon of fuel, McEnerney admitted.
A company that would spend a large sum of money to build a hangar is likely to use that hangar and buy the fuel, he said. But when asked what binds any bidder to buying the amount of fuel it pledged to buy, McEnerney answered, “Basically, nothing.”
Hix said he is confident of his fuel estimate because one of the company planes used 70,000 gallons by itself in 2016. Mid-Bay’s planes currently are housed at the Mobile Aeroplex at Brookley and at the Fairhope airport, he said.
While the RFP process was taking place, the authority’s attorney, Joshua Myrick, asked for an informal opinion from the Ethics Commission regarding whether Hix could bid on the project as a board member. The answer was yes, but Hix could not participate in voting on the winner. When Mid-Bay was awarded the contract, it was made contingent on Hix obtaining a formal advisory opinion from the Ethics Commission.
Hix’s attorney, Dennis Bailey, sought and received a favorable opinion from the Ethics Commission. Ripp contends Bailey did not provide all the facts, and says he’s asked the authority four times to provide a copy of the letter Bailey sent to the Ethics Commission.
McEnerney said he’s never seen the letter and the airport authority doesn’t have a copy. The opinion was requested by Hix personally, not the authority, he said.
Construction began late on the hangar because of various issues, including getting a building permit, McEnerney said, but is now on schedule to be finished in March or April. The construction cost is now estimated at $876,000.
“The Airport Authority has received nothing from the Attorney General or the Ethics Commission,” he said. “We have received no formal notification that we are under review. We proactively hired an attorney because we felt like it was important for us to get a timeline, a creditable timeline.”
With the level of contention and rhetoric increasing citywide, McEnerney said the authority’s timeline was intended to answer as many questions as possible from members of the public as well as any agency that received Ripp’s complaint. He said the answers to Mosher’s inquiries should be discernible as well.
Bailey helped prepare the timeline, McEnerney said. “He’s using that timeline and narrative to go the Attorney General and the Ethics Commission and everybody else that Mr. Ripp has referenced and say, ‘This is my finding,’ if you will.”