Tri-Cities Airport Authority, Northeast State seeking work-around for ARC grant headache
Above: Still a work in progress. Executive Director Gene Cossey (left) and Chairman Todd Hensley discuss the Northeast State hangar project in this file photo from the April 2019 TCAA meeting. Photo by Scott Robertson
by Scott Robertson
The Tri-Cities Airport Authority’s (TCAA) regular meeting Feb. 25 featured a parade of projects, programs and in some cases, problems. From finishing restaurant renovations to hosting potential Aerospace Park tenants to replacing the roof to adjusting Eastman’s FTZ to overcoming a potential roadblock to its partnership with Northeast State, the TCAA is having no trouble filling the hours, despite traffic counts that are still far from pre-pandemic levels.
The most vexing issue for TCAA members was the new hurdle to completing the creation of an aviation school in partnership with Northeast State Community College. The airport and the college have been in discussions regarding the best way to complete the project for more than two years. Originally, Northeast State had hoped to be able to build a hangar on the airport grounds, then use that space for training and education. Over the course of the last year, the plan evolved so that an existing hangar would be renovated for the college to lease instead.
The college applied for and received a $620,000 grant from the Appalachia Regional Commission (ARC), with the airport agreeing to match $500,000. The problem now, the TCAA was told, is that the ARC wants the airport to sign onto its agreement with the college as a co-grantee for funding.
TCAA Executive Director Gene Cossey told the authority, “The Appalachia Regional Commission has reviewed this lease and wants to put the airport authority into the lease as a co-grantee, which obligates us to a lot of things that I think are challenging for us to obligate ourselves to, and one of those would be that they would put a lien on that property so that if for some reason the school would not operate or fail, or the Board of Regents were not to maintain their obligation for the grant, then we would be obligated to, in essence, pay that grant money back and that’s where I believe we have some hurdles on that, and take on a level of risk that I don’t know that we’re able to take.
“We may come and ask the board’s favor by April as to whether or not you’re willing to take on those obligations under the ARC grant, but we’re still trying to determine if we can even legally take on those obligations,” Cossey said.
In the meantime, the Tennessee Board of Regents (TBR), which operates Northeast State, and the TCAA’s legal counsel, have crafted and delivered a summary memo to the office of Tennessee U.S. Senator Bill Hagerty in hopes his office can discuss the matter with ARC officials.
Northeast State President Dr. Bethany Bullock told the TCAA the college and airport had been in lock step before the ARC’s surprising inclusion of the new lease language. TBR general counsel Brian Lapps told the TCAA, “we were 99 percent there. The airport authority and Northeast State are in agreement. It’s the ARC that’s the issue.”
Cossey gave the distinct impression that if it does turn out to be legal for the airport to agree to the ARC’s terms, he might recommend the TCAA go ahead and do so. “There’s a lot of benefit about providing the school through Northeast State, especially some of the benefits they can use to provide this education to students for a very low cost. We want to be able to do that as much as possible, but again, we’ve got to do it the way we’re legally able to. It’s one thing if we can legally take on that risk and the board is willing to take it on versus us just not legally being able to take on that risk.”
In other matters, Cossey told the authority that staff are working with two potential tenants for Aerospace Park. “I can’t talk too much about it,” Cossey said, “but we do have a couple of prospects that are promising. One, I would say, is very, very promising. I would hope that by our next meeting we will be able to give you more information on that group. The other, I would categorize as having us on their short list of sites. I’m optimistic on that one, but I don’t know that I can say I’m super-confident because again, we are on a short list and there is some competition. Those are both good prospects we have, and we’re making lots of headway.”
TCAA Deputy Executive Director David Jones told the authority that the final infrastructure work on the Aerospace Park site itself is still on winter hold, but that he expects crews to be able to begin work again in late April or early May. That would put the final workday on the project sometime in mid-to-late summer, depending on the amount of spring rain the site receives.
The TCAA heard from Director of Business Development Mark Canty that the airport is working with Eastman Chemical Co., to expand the company’s foreign trade zone space (FTZ) in Kingsport. “That expansion will include the two new recycling facilities that were recently announced where the FTZ will allow them to defer and reduce payments of US Customs duties on imported cargo.”
Cossey also expressed confidence the airport will receive a little more than $2 million in additional Coronavirus response funding from the federal government. The FAA sent the airport two application requests. The smaller one is designated for concession relief and is around $47,000. The larger is for development of a specific COVID response at the airport. “That is for about $2 million,” Cossey said. “We have not received those grants at this time, but just like the CARES Act, I anticipate those will come through.”
Cossey also reported that the renovation work on the airport’s restaurant facilities has been completed, taking advantage of the COVID-created lull in travel to get the work done while minimizing disruptions for travelers.
Finally, Cossey mentioned that the TSA is still mandating the wearing of masks in the airport, and that while the TSA has the legal right to eject anyone who refuses to wear one, the airport is working to ensure the mandate is carried out, “as gently as possible.”