Brunswick base agency faces more questions about Oxford Aviation
BRUNSWICK — Questions about Oxford Aviation's past and current business practices continue, even as the organization working to bring the private firm to Brunswick Naval Air Station on Monday assured residents and town officials that it is conducting due diligence.
Members of the Midcoast Regional Redevelopment Authority on Monday defended their plan to sign a lease agreement with the aircraft refurbishing business, as well as the state's previous decisions to provide grants and low-interest loans to fund Oxford Aviation's expansions at Oxford County Regional Airport.
Those projects have been under scrutiny because of Oxford Aviation's inability to follow-through on job creation requirements, its failed bid to expand at Sanford Regional Airport last year and its deteriorating relationship in Oxford County and at Fryeburg's Eastern Slopes Regional Airport.
Last week, the Fryeburg airport authority met to discuss Oxford Aviation's lease performance at the airport, where the company runs a small avionics shop and is the fixed base operator.
Authority Chairman Don Thibodeau refused to confirm that his organization is attempting to remove Oxford Aviation. However, a pilot following the situation provided The Forecaster with a draft letter showing that the authority wanted to evict Oxford Aviation by Oct. 15.
Pilot Bob Mahanor said last week that the Sept. 9 eviction letter from the authority's counsel to Oxford Aviation's attorneys was distributed to attendees of the airport authority's meeting on Sept. 24.
Mahanor said the authority told attendees that the eviction notice had been sent and that Oxford Aviation's attorney had issued a response. Mahanor said it was his understanding that the recent letter had been altered slightly from the draft, but that it's directive – to evict Oxford Aviation by Oct. 15 – was the same.
The Forecaster has filed a Freedom of Access request with the authority for letters it sent to Oxford Aviation and the company's responses.
The authority is established by communities that provide financial support to the airport. Its board of directors is appointed by elected officials, thus making the organization quasi-public and subject to the state's Freedom of Access law.
The FOA request was sent Friday, Sept. 25; it requires a reply within five working days. As of Wednesday, the authority had failed to respond.
Meanwhile, Oxford Aviation President Jim Horowtiz denies that his company is being asked to leave Fryeburg. In a Sept. 25 story in the Lewiston Sun Journal, Horowitz said reports of a disagreement between Oxford Aviation and the Fryeburg airport authority were "erroneous."
"I don't believe we have any issues," Horowitz told the paper. "We're enthusiastic and we're working very hard."
The Sept. 9 draft letter tells a different story.
It claims Oxford Aviation did not settle default rent payments by Aug. 22, and therefore its lease was not automatically renewed. The authority's attorney said that despite Oxford Aviation's attempts to catch up, the company still failed in its airport duties, such as hiring a full-time mechanic and providing market-priced aviation fuel.
Mahanor said Oxford consistently priced its fuel far above nearby airports, an assertion repeated in the eviction letter.
"Additional conditions contributing to the scope of Oxford's default include the complete abandonment of efforts to promote the airport and the ongoing issue of fuel costs at a substantial premium above fuel costs at other local airports," the letter said.
Given the ongoing default, the letter said, and the failure to renew the lease, the authority "formally requests that Oxford Aviation vacate the premises on or before October 15, 2009."
The company is also facing a breach of contract suit at its headquarters at the Oxford airport, where Oxford County has accused the firm of failing to pay rent. The company, which last year sued the county over an alleged mold issue, withheld rent between March and August, according to county records.
According to County Clerk Carole Fulton, the county has also been contacted on two occasions by Vericore, a collections agency in Huntersville, N.C. Fulton said Vericore's representative, Tray Glass, said he was conducting an asset and liability investigation on Oxford Aviation and that he'd requested records about the company's lease defaults and method of payment.
Glass refused to comment.
Although such developments have raised additional questions about the company, it's unclear if they will impact Brunswick base redevelopers' Oct. 20 vote to green-light a lease agreement so that Oxford Aviation can create the Brunswick Jet Division. MRRA could also apply for $800,000 in grants to buy a paint booth to accommodate Oxford's plans to refurbish airliner-sized aircraft. The Town Council may be asked to authorize a $400,000 Community Development Block Grant for the paint booth.
MRRA officials, including Commissioner John Richardson of the state Department of Economic and Community Development, on Monday acknowledged the questions about the company. But they defended the department's handling of Oxford Aviation. DECD has signed off on the company's grant obligations, despite, according to records obtained through FOA requests, repeated failures by Oxford to meet its original job creation requirements.
That was the case in 1999 when the company was supposed to create 50 jobs as part of a state-organized funding package of $935,000 for a hangar expansion. State records show the company created just 15 jobs.
In 2007, the state DECD also signed off on job requirements for a $400,000 grant that Oxford was supposed to use for the Sanford Jet Division. The records show that Oxford created 14 jobs in Oxford, although those positions were for the Sanford project, which never came to be.
Typically, when companies fail to meet job creation requirements, the pass-through agent, in this case the town of Sanford, must pay back the funding. However, in this case it appears DECD signed off on the grant even before the project was finalized.
Asked this week if those 14 people were still employed at Oxford Aviation, DECD program manager Andrea Smith said the department has no way of knowing.
Oxford's current employment remains in question, too. Richardson claimed Monday that the company employs 80 people. Horowitz, in an Aug. 28 interview, said he employed about 65. In a Sept. 23 column published in The Forecaster, Horowitz said he employed more than 50.
During the Aug. 28 visit to Oxford Aviation, a reporter counted 22 cars in the parking lot. About 15 people were inside working on aircraft. The visit occurred on a Friday, and Horowitz said many employees had worked a four-day week.
The company has said it plans to create 200 jobs in Brunswick.
On Monday, Richardson and MRRA Executive Director Steve Levesque defended the authority's discussions with Oxford Aviation. Levesque refuted suggestions that the state and federal government's assistance with Oxford Aviation was "corporate welfare," adding that public assistance is needed to make Maine competitive in retaining and luring companies.
"We're encouraging job growth and putting people to work," Levesque said. "Sometimes you need government help to do that."
Richardson, who is considered a potential gubernatorial candidate, said he couldn't address Oxford Aviation's past.
"I can understand that there's concern with (Oxford Aviation), or any company," Richardson said. "I can only tell you that the due diligence on this side of the table is real and serious."