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Lake City vs. HAECO: Will A Majority of Council Members Vote to End Aviation Econ Dev at Lake City Airport?

Jetliner in the sky with headline: Lake City vs. HAECO. Avaition Economic Development At Risk at Lake City Gateway Airport
Photo: Isabella Mendes via Pexels |Columbia County Observer Graphic

LAKE CITY, FL – HAECO, a worldwide player in the Global Aviation MRO (maintenance, repair, and overhaul) business, is on tap to appear again in front of the Lake City City Council. The subject: a controversial two-decade-long contract that will effectively end the possibility of any realistic aviation-related economic development at the Lake City Airport.


For three decades, through various incarnations, there has been an aircraft maintenance facility at the Lake City Gateway Airport (LCQ). After various reassignments of a sweetheart 30-year lease, HAECO (Hong Kong Aircraft Engineering Company) is looking to negotiate a 20-year lease with the City of Lake City.

HAECO, as its name suggests, is a Chinese company with its headquarters in Hong Kong. It has 16 operating companies around the world. The three main HAECO groups are HAECO Hong Kong, HAECO Xiamen, and HAECO Americas. HAECO operates 27 hangers and 16 line service stations across Asia Pacific and the US. [Information via HAECO]

Learn more about HAECO here.

Those Negotiating for Lake City

City Manager Paul Dyal: Mr. Dyal is the controversial Lake City City Manager. Before becoming city manager, Mr. Dyal worked his way up in Lake City from mapping to utility director. Mr. Dyal oversaw the squandering of over a $1 million water reuse facility funded by the Suwannee River Water Management District; has a rude and obnoxious management style; recently went to war with a City Councilman; neutered the last Lake City airport manager by not allowing her to speak during airport contract negotiations; chased out its experienced and long-time finance director; and in July 2022, went to Alaska looking for another job with the blessings of Lake City Mayor Stephen Witt, his bankruptcy attorney. Mr. Dyal has been bankrupt twice and refuses to get a background and credit check.

Assistant City Manager Demetrius Johnson: Mr. Johnson began his career in Lake City almost 20 years ago in the maintenance department. He worked his way up to become an assistant in the City's purchasing department. City manager Paul Dyal appointed Mr. Johnson as assistant city manager, refusing to do a background check on him. Mr. Dyal has installed Mr. Johnson to be in charge of the airport, and Mr. Johnson is part of the City negotiating team. It is unclear if Mr. Johnson has any degrees or has flown on an airplane.

Former airport manager Florence Straugh: Ms. Straugh came to Lake City with decades of airport experience. Originally on the City negotiating team, Ms. Straugh was concerned about economic development at the airport and leasing for fair market value; wanted a current appraisal of the airport property; recommended the proposed new negotiated lease to be at fair market value.

Avaition Attorney Ed Booth:  Mr. Booth was retained in September 2021 to assist the City in negotiating a new long-term lease with HAECO. Mr. Booth has been board certified by the Florida Bar as a specialist in aviation law, one of only 48 attorneys designated in Florida. He has served as the Secretary of the Board of Directors of the Jacksonville Aviation Authority and has extensive experience in the value of airport land in Florida. He is also an expert in Federal Aviation Administration (FAA) federal grant obligations and is familiar with current charges for long-term leases on comparable airport property.

New City Attorney Todd Kennon: Mr. Kennon’s resume, while extensive, shows no airport experience or comparable-sized public projects.

New City Attorney Daniella Adams: Ms. Adams was admitted to the bar in December 2020.

Those Negotiating for HAECO

Mark Easton: Mr. Easton is the General Manager of Lake City Gateway Airport (LCQ).

Michael Sprague: Mr. Sprague is General Council for HAECO Americas, LLC.

Vernon Douglas: Mr. Douglas is a former Circuit Court Judge based out of Lake City and the namesake of the Douglas & Douglas law firm. It is unclear for whom Mr. Douglas was negotiating when his name popped up at the last City Council meeting.

Lake City Airport: Value

Lake City Airport has an 8,000-foot runway with clear approaches and a significant amount of available land for future aviation-related development. Any plane in the world today can land at LCQ. The airport is located at the intersection of I-75 and I-10. Sixty-five miles to the east is Jax Port, a major international shipping port, which is also located near another interstate, I-95.

LCQ has rail access and utilities for any aviation-related economic development.

The City Council: December 19, 2022

The December 19, 2022, City Council meeting reviewed the HAECO lease. It was delivered to the City Council that day at the last minute by the new City Attorney, Todd Kennon. The public was left in the dark.

During the meeting during the lease discussion, Attorney Kennon revealed that forma Judge Vernon Douglas was negotiating for HAECO. It is not clear how much crossover negotiating Judge Douglas was doing. It is known that Judge Douglas attempted to contact City Council members, who had their own attorney(s).

Judge Douglas did not respond to a request for comments.

City Manager Dyal said that he was asked to step into the negotiations by the City Council. Mr. Dyal said that he and Assistant City Manager Johnson had several meetings with HAECO's general manager Mark Easton and “that the direction that we were going with HAECO was the direction that I was asked to go to.”

There is no record in the minutes of the City Council where any City Council member asked Mr. Dyal to step in and negotiate -- polling the board out of public view is illegal.

Mr. Dyal told the City Council, “I think what we eventually ended up agreeing on was satisfactory to myself. I think it's a good lease. I think it benefits both partners.”

Mr. Dyal continued, “I think the lease amounts, a lot of the stuff for fair market value, and all got throwed out there. I think it got off to a bad negotiation start; I think HAECO will admit to that as well.”

Mr. Dyal's resume shows no experience in negotiating long-term, high-value leases, nor does Mr. Dyal's resume demonstrate any aviation experience or airport knowledge.

The HAECO lease is a triple net lease which is generally standard operating procedure in renting large commercial property.

Commercial property is generally rented by the square foot. Early on, HAECO's attorney removed any reference to being charged by the square foot. General Counsel Sprauge went so far as to remove the responsibility of HAECO to chip in for the maintenance of common areas, also an established practice in commercial leasing.

City Manager Dyal did not direct the shared maintenance clause to be reinserted into the lease.

Mr. Dyal opined that the lease is a “win-win for both sides.”

Lake City's new City Attorney, Todd Kennon, told the Council, "HAECO had Mr. Vernon Douglas assist in negotiating some of the finer points.”

Mr. Kennon said everybody was scrambling “in the last minute.”

Mr. Kennon said, “More of a legal provision than anything. In order to maintain our FAA status, HAECO has to be authorized to do business in the state of Florida.”

This is a bigger problem than Mr. Kennon has made it out to be. Governor DeSantis is calling on the Florida legislature to pass new legislation curbing Chinese influence in Florida.

HAECO is a Chinese company headquartered in Hong Kong.

The FAA requires the airport to be sustainable and to charge fair market value for the lease. HAECO's present lease rate was set 30 years ago. Its new proposed rate is a little over double that.

In the beginning, the City’s negotiating team of Airport Manager Florence Straugh and Aviation Attorney Ed Booth recommended appraisals by an airport appraiser. The recommendations fell on deaf ears.

As the City Council meeting wound down, Councilman Jake Hill complained about the 12th-hour HAECO contract presented to the City Council.

Councilman Hill said, “My thoughts on this at the 12 hour. Again, I'm just seein' this. So to me, it's like HAECO is trying to pull the wool over our eyes again by rushing this to us. So, I'd like to go over it and make sure that the City, again, is getting their bang -- the biggest bang for their buck.”

Councilman Hill is chairman of the Lake City Airport Committee.

Councilman Jernigan made some comments which reflected his inability to review the contract before the meeting. However, Councilman Jernigan said the Council needed “to have faith and confidence in what we have done with HAECO,” adding, “the contract “looks pretty decent."

City Manager Dyal, reflecting on unnamed conversations, once again insulted the City Council saying, "Some Council members seem to have a little bit of memory issues."

Talking about the negotiations with HAECO, Mr. Dyal said, “You gonna go in and ask a corporation to put in millions of dollars in rent; million dollars in renovations. I was instructed that wasn't the course that we was gonna go.”

Mr. Dyal did not say who instructed him. He mentioned that if the contract was not approved, the only course of action for the City was to go out for proposals.

That was not the only course of action. HAECO could be offered a one-year lease extension at the present rate while a request for proposals was sent into the marketplace. At that time, HAECO, like anyone else, could put in a proposal.

Councilman Hill told the Council, "All I'm askin’ is HAECO pay fair market value. That's all I'm askin’.”

HAECO Manager Easton responded, “That's what's in this lease, sir. And I find it offensive that you say that HAECO is tryin' to pull the wool over this Council's eyes.”

Councilman Hill began to speak, but Mr. Easton spoke over him.

When Mr. Easton finished his pitch, Councilman Hill mentioned that the rent HAECO had been paying for the last 30 years was like free rent.

Mr. Easton went on about the great deal HAECO was giving Lake City and said, "At risk right now is the long-term future of this facility. And I hope it is not voted on by short-sighted, uneducated comments by this board."

Councilman Hill asked, "Who's uneducated?"

Mr. Easton did not answer.

FSU: Throwing Its Hat in the Lake City/HAECO Ring

On Tuesday morning, Florida State University's Institute of Government advised the city clerk that it was coming to Lake City to participate in the HAECO contract meeting. Having previously been advised of the HAECO issues, FSU is coming to put its nose in Lake City's business.

At Jacksonville's Cecil Field, Boeing is paying over $15 a square foot. HAECO's proposed lease values Lake City airport property at eight cents a square foot, a rate so low that HAECO removed any mention of square foot rates from the lease.

A site plan showing the buildings and footprint of the HAECO leased area was also removed without objection by City Manager Dyal, the new City Attorney, or the City Council.

Tonight, it may be a different story.

The City Council meeting begins at 6 pm. Aviation expert Attorney Ed Booth is on the agenda.


Between 2015 and 2019, there has been $24,519,288 million in Federal grant funding to support HAECO at Lake City Gateway Airport.

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