WILMINGTON — The Clinton County Port Authority leased space to a new air cargo tenant and designated a current Wilmington Air Park tenant as the exclusive provider of maintenance, repair and overhaul operations at the air park.
Thursday, the port unanimously authorized a six-month lease and an operating agreement with Atlas Air for 720 square feet of office space and 2,000 square feet of warehouse space at Wilmington Air Park, which the port owns.
The lease agreement is expected to generate about $1,000 a month. The port will also presumably sell fuel to Atlas Air jets.
At the end of the lease, Atlas Air will have an option to renew for six months.
The first flight landed Wednesday morning in an Amazon Prime Air jet. Atlas Air, as well as current tenants ABX Air and Air Transport International, provides air cargo services for the e-commerce giant.
On the same day as the lease agreement, the port voted 5-1 to designate Airborne Maintenance and Engineering Services as the exclusive provider of maintenance, repair and overhaul (MRO) services at the air park for five years.
Board member Larry Laake dissented, and member Reneé LaPine abstained.
AMES, ABX Air and ATI are owned by parent company Air Transport Services Group.
Dan Evers, the port’s executive director, said the agreement would last for five years and would give AMES exclusive rights to MRO work at the airpark, though it “does not preclude another airline from doing line-service maintenance on its own aircraft with its own personnel.”
“AMES, in exchange for this designation, will commit to creation of a hundred new job opportunities during this five-year span as well as the retention of its existing” employment, Evers said. “We believe this agreement represents a business retention and expansion with one of our primary tenants.”
At the end of the agreement, Evers said, the port could choose to renew the agreement.
Evers said Ames brought the item to the port’s attention.
“I think it’s a reflection of the job market,” Evers told the News Journal. “That’s a technical skill that is in short supply in the job market today. And as air cargo activity increases here, this was seen as a preemptive measure on the company’s part to ensure that as growth continues it has opportunity to retain its best employees in a way that doesn’t constrict pure competition.”
Port members who voted for the designation echoed Evers’ comments.
“We have a client that’s been particularly important to this facility and to this community asking for exclusivity on activity levels that have been minimal outside of them anyway at this point,” said chair Walt Rowsey. “Today, given where we are, with things moving as well as they are, I think it’s a reasonable request from a business standpoint.”
Board member Richard Thompson said he could understand if AMES was worried someone might try to enter and steal their employees. Rowsey agreed, adding that AMES has undergone significant efforts to recruit employees.
“I struggle as a public entity doing exclusive deals,” Laake said. “I like co-marketing. I like ‘preferred.’ The word ‘exclusive’ always makes me uncomfortable. … I want to support them.”
Laake told the News Journal he would rather have the port recommended that airlines use AMES, but not require it.
LaPine told the News Journal she “wasn’t comfortable committing one way or the other,” which was why she abstained.
“I can wholeheartedly support a two- to three-year term without reservation at all,” LaPine said. “It’s just that five years is a really long time, and we don’t know what’s going to happen in that length of time.”
“You have someone that is effectively showing growth and prosperity and willing to continue to commit to this particular site, and not a what-if,” said port member Beth Ellis. “That makes me feel a little better about that five-year (term) because that means they have to, according to the terms, in five years produce this.”
Thompson asked how the agreement might impede efforts to recruit other businesses.
“It certainly impacts it,” said David Lotterer, a senior associate with Jones Lang LaSalle, the port’s real estate agency. “My biggest concern is unintended consequences.”
Lotterer said he wasn’t clear what the definition of “overhaul” would be, and he expressed concern about two potential clients in particular.
Evers, however, disputed that. He said he didn’t believe the agreement would jeopardize negotiations with those unnamed clients.
“It was crafted with that in mind,” he said. “This does not preclude us from recruiting and securing tenants and investment from an operation that would make the types of strategic modifications or substantive alterations or the development and construction of components. … This is talking about servicing.”
Evers said the five-year term would allow the port to assess how many and which air cargo operations would be interested in basing at the airpark before the renewal period.
Reach Nathan Kraatz at 937-382-2574, ext. 2510 or on Twitter @NathanKraatz.