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HAECO Lake City: Is It Negotiating In Good Faith?

Jetliner painted by International Aerospace Coatingsl with headline: International Aerospace Coatings, an American based company, paid HAECO $25,000 month for one Hanger
Photo: International Aerospace Coatings | Columbia County Observer graphic

LAKE CITY, FL – Florida Gateway Airport, Lake City’s municipal airport, and HAECO the Chinese aerospace refurbishing company, have recently become the epicenter of political activity in Lake City. Everyone has been getting involved: County Commissioners, a retired judge, City Council members, the Interim City Manager, and HAECO employees.

Background

HAECO has been at the Lake City airport for as long as anyone can remember. It has transitioned through owners and names and in 2017 it became HAECO.

Hong Kong Aircraft Engineering Co. Ltd. (HAECO) – the “H” stands for Hong Kong, is an aircraft engineering and maintenance group whose head office is located in Hong Kong.

In America, HAECO is HAECO Americas.

Some members of the Columbia County 5 may not realize that Hong Kong is Chinese, aka, in China.

In 2017, HAECO had revenues of 14 1/2 billion dollars and operating income of $209 million.

It was reported HAECO Americas in Lake City nets about $60 million a year.

Shortly after the $60 million was revealed, HAECO’s manager was transferred to North Carolina.


Solid well lit hangars are one of the keys to safe efficient aircraft maintenance. The hangars at the airport were allowed to deteriorate, apparently without any intervention from the City. Read more about HAECO here.

As the Observer reported years ago, HAECO was not keeping up with the repairs of the hangers. The lack of maintenance was allowed by the complete lack of oversight and enforcement by the City of Lake City.

While HAECO claims that it spent millions on maintenance, roof leaks which it did not repair caused major damage in a couple of hangers.

HAECO: Negotiating in Good Faith?

Whether HAECO is negotiating in good faith may be in the eye of the beholder.

HAECO didn’t want a rent increase and was aiming for a 10% increase in its present lease of $12,000 a month or $144k a year, although there was talk that HAECO would go up to about $330k a year.

That is not fair market value.

Interim City Manager Paul Dyal has thrown himself into the mix. He has neither the education, background, nor history of success regarding negotiations. His long-term management of the city utility system is questionable in some areas and disastrous in others. Insiders will tell you that his intransience almost cost Columbia County major economic development projects.

The County's quest to get into utility business is universally known in the County to be in good measure a result of Mr. Dyal's inability to see the forest through the trees.

HAECO – Is It Playing it Straight?

While it appears HAECO, the County 5, and others are reaching out to both representative Brannan and Senator Bradley, it is not clear if they are being given the full picture.

The Observer has recently discovered that HAECO was subleasing hanger number 9 at the airport for $25,000 a month or $300,000 a year, before it jettisoned the company.

The company that was renting the hanger was International Aerospace Coatings, a global leader in aircraft painting, interiors and graphics. With 9 state-of-the-art facilities across the USA and Europe, IAC has capacity for 22 lines of aircraft and processes 1000+ paint events per year.

Since 1990, IAC has been a global leader in Aircraft finishing for commercial, regional, military, & OEM segments.

Because IAC is an American Company, it can obtain military contracts, something that HAECO cannot do.

It was reported to the Observer that while Ami Fields was Interim City Manager, she met with IAC and the Airport Manager. This meeting occurred after HAECO jettisoned IAC for the airport hanger lease.

IAC offered to pay Lake City $1.7mil to lease hanger 9.

In 2017, fair market rent at the airport was valued at $1.1 to $1.7 mil.

Epoligue

City Councilman Todd Sampson told your reporter, “I'm getting calls from people that are not involved. Why is this being negotiated this way? Because HAECO is trying to put pressure to get a sweetheart deal."

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