BUDDY PALMER: A better compromise for UAM lease

As a new councilman I have found the situation regarding Tupelo Airport Authority, Universal Asset Management and the city of Tupelo be a very complicated and complex issue.

Some of the facts that have been presented to me will very valuable in my decision-making concerning this issue. These facts are:

• The building that UAM leases is being paid for by the city of Tupelo at $125,650 annually. The city does not receive any revenue from this lease. The remaining balance of this debt is approximately $1.25 million.

• The city is now being asked to fund a loan of $1.2 million for a new “taxiway” for UAM to access its facility. This will cost the city an additional $140,000 per year to fund this request. TAA does not have the funds to pay for this debt service.

The lease between UAM and TAA began June 2011 at $85,000 per year and is now up to $105,000 per year. This does not include use of land outside their lease area or landing fees. Some sources have indicated that these rates are far below market value.

• It should not be a surprise to anyone that a 400,000-pound aircraft would cause severe damage to a 55-year-old runway that was built for 50,000-pound aircraft. I also believe that landing these huge aircraft on our new runway that was built for 200,000-pound aircraft, would severely distress this area over the remaining time of the lease.

• I have been led to believe that this will not be the end of requests from UAM to further repair inflicted by these huge aircraft.

• As for the jobs promised for the next three years (from 70 to 100 employees), I would hate to lose these, but I do not think it should be the mission for the city of Tupelo to ask the taxpayers to pay $2.4 million to provide these jobs. I am sure that many small business owners that have not received financial support from the city of Tupelo would agree.

Finally, my recommendation would be to split the cost of the “taxiway” and to renegotiate this lease to a more acceptable rate and ensure that this lease also defines responsibilities for the lessor and lessee.

I believe this would promote the “partnership” that we all are seeking.

Buddy Palmer is a businessman and he is councilman of Tupelo’s Ward 5.Contact him at (662) 255-1454.

  • JMES

    I see that you are using the word “taxiway”. There has been confusion as to what the 1.2 million will be used to repair. It is the TAXIWAY that UAM uses to park and move its “end of life” airplanes, NOT the RUNWAY that all commercial and general aviation planes use. It is only a PORTION of the TAXIWAY that is to be repaired. 1.2 million, if indeed that is a true estimate, is only a small amount of what would be necessary to repair the entire TAXIWAY, which will surely continue to deteriorate under the weight of those planes. For example, a contract for comparable work at Columbus Air Force Base last year exceeded 30 million dollars. Again, since it is the TAXIWAY and not the RUNWAY, it is UAM, a private business, that will benefit. If as Mr. Palmer has rightly suggested, the RUNWAY suffers damage from the landing of UAM’s planes, more tax dollars will be required to maintain all other operations at the airport.

  • Tracy

    So as a business owner in Tupelo, MS, if the access road to your leasehold area is not passable, the City of Tupelo will preform the repairs and expect the business owners to split the costs. Shouldn’t small business focus their small profits on expansion, better pay for their employees, improved benefits?

  • Winston Smith

    It sounds to me like we’ve made a deal with the devil. Kick the bums out

  • tupelobeware

    Me thinks the iceberg is being exposed. Mr. Palmer has effectively addressed a serious impasse with no reasonable conclusion for the future success at Tupelo Regional Airport. The following additional points need to be included:
    ·
    Airport management or lack thereof has taken the City to the cleaners by providing private tenants with 40% comparable rent rates.
    ·
    Audit identified serious accounting problems; monthly reimbursements of funds could not find supporting documentation. Year end balances could not be reconciled.
    ·
    UAM’s promises are unverified or validated. $29M in capital expenditures for the City? NOT!
    ·
    Damage occurs on any movement area that is used
    by the 400,000 pound aircraft.
    ·
    Why didn’t TAA hire a neutral, outside engineer to provide a systematic, complete evaluation of the airport’s ground structure to determine the whole airport’s problem?
    ·
    Total subsidy from City taxpayers including the $1.2M loan will be $425K a year for at least ten years. And this does not include unforeseen damage costs or routine runway/taxiway maintenance which will average a million a year because airport management has been focused on UAM and AMS.

    Solution:
    1. NOTAM the airport closed to 400,000 pound
    aircraft. This doesn’t violate the lease since this is in the best interest of
    the airport’s safety and growth.
    2. Call for a full disclosure engineering inspection
    3. Call for a complete, full audit of airport finances and accounting procedures