![\"\"](\"https:\/\/environment-hawaii.org\/wp-content\/uploads\/2020\/09\/N985SA_at_Lihue_Aug_2008.jpg\")
In their letter, Bonnie and Curtis Lofstedt complained that a couple of helicopter companies that had obtained FBO leases at the Lihu\u02bbe Airport paid much lower rents and had longer lease terms than those \u2014 including Island Helicopters \u2014 that did not.<\/p>\n\n\n\n
\t\u201cIsland Helicopters pays as much as $2.24 versus their $0.19 per square foot,\u201d they wrote. To receive the lower rent, the FBO companies must provide services to other companies or entities in the industry, but they do not, the couple alleged.<\/p>\n\n\n\n
\u201cThey do not sell or provide any service to the industry and are not in business to provide any level of service at [Lihu\u02bbe Airport] other than tours and charters for their specific business. This is a guise for cheaper rent and longer leases and is a possible violation of FAA Grant Assurances No. 22c, which states each FBO operator at the airport shall be subject to the same or similar uses of such airport to serve ANY air carrier at such airport,\u201d they wrote.<\/p>\n\n\n\n
\tThey stated that they did not object to issuing a lease to Airborne Aviation, but just wanted all of the leases treated equally. <\/p>\n\n\n\n
\t\u201cIt is more than time for the BLNR to see the disparity and discrimination. \u2026 The state knows (and the proof would be in the excise tax forms of these companies) that these companies are not by definition FBO operators and are actually helicopter tour and charter companies receiving a benefit in reduced rent and space not provided to similar or equal operators with the same respect,\u201d they wrote.<\/p>\n\n\n\n
\tOn March 13, the lease request returned to the Land Board and Island Helicopters re-submitted their testimony from February. Oddly, the DOT\u2019s report to the board supporting the request cites the same FAA Grant Assurances language cited by Island Helicopters as justification to NOT sell the lease at public auction. An auction, Smith told the board, would \u201clikely cause disparate rental rates.\u201d<\/p>\n\n\n\n
Before addressing the lease request, board member Chris Yuen asked Smith which FBO company or companies at the Lihu\u02bbe Airport were providing repairs and maintenance of aircraft.<\/p>\n\n\n\n
Smith replied that he had not gone through his list of things at Lihu\u02bbe and did not have the names.<\/p>\n\n\n\n
\t\u201cYou don\u2019t know who the two are?\u201d Yuen asked.<\/p>\n\n\n\n
\t\u201cNot off the top of my head. I would be happy to get that to you as soon as I get back to the office,\u201d Smith replied.<\/p>\n\n\n\n
Brandon and Delzelle Miranda from Airborne Aviation testified to the Land Board that they are mainly a utility company, not a tour company. With regard to their qualifications to be an FBO, they pointed out that the company has a contract with Kaua\u02bbi County to fix county aircraft.<\/p>\n\n\n\n
\tBased on the Mirandas\u2019 testimony, the board approved the lease. (Board chair and Department of Land and Natural Resources director Suzanne Case recused herself because the company sometimes works for the department.) <\/p>\n\n\n\n
Given the concerns raised by Island Helicopters, the board also asked Smith to provide within 60 days a report on FBO operators at the Lihu\u02bbe airport and provide evidence that they qualified for their leases.<\/p>\n\n\n\n
As Kaua\u02bbi Land Board member Tommy Oi said earlier in the meeting, there is tremendous competition on Kaua\u02bbi among tour helicopter companies. \u201cIt\u2019s dog eat dog,\u201d he said.<\/p>\n\n\n\n
\u2018A Big Loophole\u2019<\/em><\/strong><\/p>\n\n\n\n That report did not come until the board\u2019s August 14 meeting and it did not come from Smith. No written submittal was made available on the DLNR\u2019s website. But during the DOT staff\u2019s presentation, despite Zoom feedback echoes and muffling facemasks, it became clear that their internal investigation uncovered problems with the FBO leases.<\/p>\n\n\n\n The DOT property manager Ethan Tomokio, who said he had been asked in July to complete the investigation, reported that there are three FBO leases at Lihu\u02bbe Airport. The first was issued in 2007 to Blue Hawaiian Holdings, LLC, known as Blue Hawaiian Helicopters. The company was issued a 30-year lease. <\/p>\n\n\n\n \t\u201cThe master file that we have here lacks evidence that it qualified as an FBO,\u201d Tomokio said.<\/p>\n\n\n\n The second FBO lease, also for 30 years, was issued in 2012 to Air Service Hawai\u02bbi Inc. \u201cAgain, the master file lacks evidence that it qualified as an FBO at the time,\u201d Tomokio continued.<\/p>\n\n\n\n \tThe third FBO lease, for 15 years, was issued to Jack Harter Helicopters in 2016. <\/p>\n\n\n\n \tFor that lease, Tomokio said, there was evidence in the master file that it qualified as an FBO. He held up two binders, each containing about 300 pages of supporting information. <\/p>\n\n\n\n \t\u201cIt\u2019s an application every FBO operator must complete before the airport approves it,\u201d he said. <\/p>\n\n\n\n \tGiven that only one of the three current FBO lessees provided evidence in their applications that they were going to actually be FBOs, Yuen asked, what was the DOT planning to do about it?<\/p>\n\n\n\n \tThe DOT\u2019s Mike Auerbach answered that in the future, all FBO lease applicants will go through a qualification process. But as far as the existing FBOs were concerned, \u201cI\u2019m not sure there are many options at this point,\u201d he said.<\/p>\n\n\n\n \tTomokio explained that the way the DOT\u2019s FBO leases were written, the lessees are given the right<\/em> to perform FBO services, but the leases don\u2019t say that if the lessees don\u2019t <\/em>perform those services, they can lose their lease. <\/p>\n\n\n\n \t\u201cThat seems like a big loophole to me, though,\u201d said board chair Suzanne Case. \u201cIf you say you\u2019re an FBO and you get a lease on that basis and you\u2019re not an FBO, you just skipped over a whole step that is all about competitive availability of spaces. \u2026 People felt like there was favorable treatment [to FBOs],\u201d she said.<\/p>\n\n\n\n \tTomokio agreed and said that, going forward, the DOT will require the application process to be performed. \u201cWe are very careful about issuing any type of lease \u2014 FBO, hangar, fueling \u2014 because the application has to reflect what they intend to do,\u201d he said.<\/p>\n\n\n\n Both Auerbach and a number of board members suggested that the Department of the Attorney General review the Lihu\u02bbe FBO leases and applications to determine whether the current lessees qualified and still qualify.\u00a0<\/p>\n\n\n\n \tTomokio noted that the FBO lease the Land Board had recently approved for Airborne Aviation had not been executed yet, and \u201cwe can absolutely request to add language that they have to perform these services.\u201d<\/p>\n\n\n\n \tDespite what was found or not found in the DOT\u2019s files, Yuen suggested that the agency investigate whether any of the three FBO lessees that were part of the report are performing FBO services. \u201cMaybe they are. I\u2019m not going to jump to conclusions. Let\u2019s hope that they are, in fact, operating as FBOs. I do not believe the language of the lease restricts the ability of the DOT from continuing to insist that if you get a direct lease as an FBO that you\u2019re supposed to be an FBO. I cannot believe the FAA would be very happy. The FAA requires all FBOs be treated the same. That\u2019s the DOT\u2019s rationale for not going to public auction,\u201d Yuen said.<\/p>\n\n\n\n \tIn reply, Tomokio revealed, \u201cEvery lease from now on that the DOT is going to enter into, FBO or not, is going to come to the Land Board as a public auction request. FBO or not \u2026 rather than a direct lease. This is a directive from our management here at the airports.\u201d<\/p>\n\n\n\n \tYuen said he was impressed. \u201cI’ve been concerned in the past that DOT took too broad a reading of what qualifies for not going to public auction. \u2026 I do wonder though about the FBOs, because DOT has said for several years that they cannot go to public auction [because] they would violate FAA\u2019s guidelines.\u201d<\/p>\n\n\n\n \tTomokio and Auerbach replied with a long silence.<\/p>\n\n\n\n The board ultimately voted to require the DOT to investigate whether the FBO lessees at Lihu\u02bbe were, in fact, providing FBO services. It also voted to have the attorney general\u2019s office review the leases and the circumstances of their applications and approval and determine whether something needs to be done. The board asked that the results of those investigations be brought to the board in 90 days.<\/p>\n\n\n\n \u2014 Teresa Dawson<\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":" Over the past several years, members of the state Board of Land and Natural Resources have questioned Ross Smith of the Department of Transportation’s Airports Division about some of his requests for board approval of direct leases. Why, they wondered, … Continued<\/a><\/p>\n","protected":false},"author":1,"featured_media":12850,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13,338,473],"tags":[3],"class_list":["post-12849","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-board-talk","category-land-use","category-september-2020","tag-teresa-dawson"],"_links":{"self":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts\/12849","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=12849"}],"version-history":[{"count":0,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts\/12849\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/media\/12850"}],"wp:attachment":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=12849"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=12849"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=12849"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}