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HAECO Outmaneuvers Lake City: 20 Year Sweetheart Lease To Save HAECO Millions; Economic Development At Airport Threatened

Part I: The run-up to the lease presentations

Part II: The lease presentations

Airbus with headline: HAECO scores big in Lake City. City Council: What was it thinking?

Part I: The run-up to the lease presentations

LAKE CITY, FL – Last Tuesday evening, January 17, one of the biggest sweetheart deals in the history of Florida went down in Lake City City Hall. Negotiations between Lake City and HAECO (Hong Kong Aircraft Engineering Company), which began approximately 18 months ago, ended with all but one of the City Council clueless about the fair market value of its airport.


Before the January 17 meeting of the City Council, the last substantive Council action occurred on December 28, 2022. The only item on the December 28 agenda was the 12th-hour contract of Columbia County's third largest employer, HAECO, located in Lake City's municipal airport (LCQ).

HAECO's 30-year lease was set to expire on December 31, and time was short.

HAECO occupies approximately 745,000 square feet of hangar and office space and was paying approximately $.02 [not a typo] a square foot for that space.

On December 28, the Council listened to the public, lobbyists (unregistered), and the City’s expert aviation counsel.

Paul Dyal, City Manager
City Manager Paul Dyal

The final speaker was City Manager Paul Dyal, who installed himself as the City’s negotiator, banning its aviation experts from participating and claiming the fee of the City’s Aviation Attorney, Ed Booth, caused the airport to be over budget.

One hour and 15 minutes into the December 28 meeting, the Council extended HAECO's lease for a year and agreed to seek an appraisal for fair market value of the property HAECO was leasing.

See: Lake City vs. HAECO: Cooler Heads Prevail, City Council Extends HAECO's Lease One Year, Council Orders True Airport Appraisal For the Protection of All Parties

Less Than One Day Later: HAECO Springs Into Action

On December 29, less than twenty-four hours after the Council extended HAECO’s lease, HACEO had another contract prepared. Its unregistered lobbyist, community activist Sylvester Warren, sprang into action.

Mr. Warren called the City Clerk and said he wanted the new HAECO contract put on the agenda, and he had spoken to the Mayor and Councilman Hill, and they said it was okay.

The Clerk checked out Mr. Warren's story, found it to be accurate, and refused to put HAECO's contract on the January 3 agenda; instead (after checking with the Mayor) scheduled the item for the January 17 regularly scheduled Council meeting.

January 17, the City Council Meets

New City Attorneys Keeping the Council & Public Off Balance

As the clock wound down to the January 17, 2023, Council meeting, Lake City’s new City Attorney didn’t disappoint, providing another 12th-hour addition to the City's agenda.

On January 12, at 6 pm, City Clerk Audrey Sikes sent out and posted to the City website the meeting agenda for January 17. There was enough time for the public and the Council to become familiar with the agenda items, particularly item number eight: the 12th-hour HAECO revised lease hawked by community activist Sylvester Warren on December 29 for HAECO’s Mark Easton and former Third Circuit Chief Judge and legal legend, Vernon Douglas.

HAECO's 12th-hour lease proposal recommended three substantive changes. The rent increases were compressed; the City’s notice requirement (lowered by HAECO corporate counsel from 180 days to 30 days in the option period); and a table of what HAECO had to do, called a Facilities Maintenance Plan (FMP). The FMP was maintenance that HAECO should have been performing during its previous lease, but didn’t.

It appears that sometime after the December 28, 2022, Council meeting, the meeting in which the Council extended the HAECO lease for another year and also moved to get a current airport appraisal, HAECO hired a new attorney/lobbyist, Alison Squiccimarro of the law firm of Paul A. Lange (Stratford, CT, and Park Avenue, NYC).

Once again, City Attorney foot-dragging caused another 12th-hour addition to the City agenda.

At 10:10 am on Friday, January 13, 2023, Atty. Squiccimarro contacted the City attorneys and paralegals at RKK and Folds and Walker, notifying them that she was coming to the Tuesday meeting (Jan. 17) and that she had prepared a slide deck and asked that it be shared with the City Council. The City was open on Friday, but closed on Monday for the MLK holiday, something the City attorneys should have known.

At 11:03 am on Monday, RKK's Leigh Ann Cannon forwarded a copy of Ms. Squiccimarro's power point to the City Clerk. The City was closed. Ms. Squiccimarro's PowerPoint finally made it to the City agenda on Tuesday at 11:11 am, the day of the meeting. Other than the people who receive agenda updates from the City Clerk, it is doubtful that many knew of the existence of any addition before the meeting.

Ms. Squiccimarro’s slides presented an argument that increasing HAECO's rent could cause a surplus in the City's Airport Budget, which could jeopardize Airport grant funding by the FAA.

Ms. Squiccimarro's PowerPoint was propaganda, biased, and misleading; not having it available timely before the meeting robbed the public and the City Council of adequate time to research Ms. Squiccimarro's claims.

January 17: The City Council Meets
Mayor Witt Lays Down the Law, Sort of

For over two years, to the detriment of the City's reputation, community activist Sylvester Warren has been disrupting City Council meetings by calling out from the audience, name-calling, and abusing speaker time limits.

Mayor Steve WittLast Tuesday night, the Mayor said that disruptive behavior would no longer be tolerated. The Mayor was moderately successful. However, Mr. Warren continued to call out from the audience, called names, and had an issue with his time limits.

City Attorney Todd Kennon, throughout the recent HAECO City lease meetings, appeared at times to be working for HAECO and not the City Council. Respect for both the Council and the public having adequate notice of items coming before the City Council demonstrably was not of Mr. Kennon’s concern.

Councilman Todd Sampson was the only council member who took exception to the continuing 12th-hour meeting documentation provided by the city attorney and the HAECO lobbyist.

The other City Council members did not seem to care.

THE HAECO Lease: The Public – the Attorneys

About thirty minutes into the meeting, HAECO arrived on the agenda: “8. Discussion and Possible Action: HAECO (City Attorney Todd Kennon)”

The City Attorney’s de minimis explanation on the agenda item is contrary to the spirit of Florida law, which requires the agenda to inform the public of the "proposition" before the Council. HAECO is not a "proposition."

Mr. Kennon explained what should have been on the agenda: "The first order of business would be to have someone consider a motion to rescind the action of December 28. If that motion is seconded and passes, then we can go into discussion and possible action of the HAECO lease as presented and amended by HAECO."

Councilman Hill made a motion to rescind the action of December 28. It passed 4-1, with Councilman Sampson voting in opposition.

After the vote, to keep the public informed, the City Clerk explained what was rescinded, “Mr. Hill [previously] made a motion to extend the lease agreement for one year and to seek an appraisal for fair market value."

Ms. Barbara Lemley was recognized by the Mayor to speak and asked if the appraisal would be presented.

Mayor Witt said he did not know.

City Attorney Kennon weighed in, “I don't know what you mean by appraisal. I don't have any appraisal other than a 2017.”

Mr. Kennon never provided the 2017 appraisal to the City Council. It is not clear if the City’s self-anointed negotiator, City Manager Paul Dyal, had seen a copy.

Lake City resident and the Town Manager of White Springs, Vanessa George, addressed the Council. She said you can't worry about the appraised value. “We have to think about the people that work at HAECO."

link to the HAECO-LC leaseMr. Kennon explained HAECO’s lease changes. He did not get them all. The lease was missing exhibit “A.” Mr. Kennon did not pick that up or just decided not to mention it.

The lease did not include a site plan that showed what HAECO was leasing. That appeared not to be accidental, as the HAECO footprint included 134 acres of property to which the City had no access.


Part II: The lease presentations

Mr. Kennon introduced attorney/lobbyist Allison Squiccimarro who presented her slides which supported the HAECO position that a rent increase approaching fair market value, or something close, was not such a good idea and could put federal funding at the airport at risk.

Councilman Jernigan asked Ms. Squiccimarro, “What would be reasonable to you for us to have HAECO bank every year? What would be reasonable to you?"

Alison Squiccimarro
Attorney/lobbyist Alison Squiccimarro answering questions.

Ms. Squiccimarro answered, “That’s part of the ongoing discussion.” (she stammers) "As an attorney, you never want to see your client bid against themselves… I think they put forth a very reasonable proposal that is something that they can do to keep them here… it will add some additional income to your airport... You can't risk accumulating too much surplus because then, if you start a cumulative surplus, the FAA looks and says, 'Hey, wait a minute. Are you charging fair and reasonable rates?’”

Councilman Sampson weighed in, "A lot of expenses in this lease proposal by HAECO [has] stuff that should have already been done in our current lease.”

Mr. Sampson pointed out that in N. Carolina, HAECO is paying $.50 a foot for similar hangar space. (The HAECO lease proposal is eight cents a foot).

Mr. Sampson continued, "I believe there have been seven Airbuses land since our December 28 meeting -- which is a lot of revenue. HAECO is not a not-for-profit.”

“All I want is for HAECO to pay a fair amount. I have spoken to Ryan Peeters at FAA. (Mr. Sampson said he had a “little bit different take” on the fair market value component of the FAA rules.)

Mr. Sampson asked Ms. Squiccimarro why it wouldn't be fair for HAECO to pay the same amount in Lake City as it is paying for similar hangar space in North Carolina.

Ms. Squiccimarro said, "It goes back to – for all of the reasons where – I mean we took -- because I watch the meetings where there is a lot of focus on Cecil [Field], so I did pull those details. But every airport is different, and what the FAA wants you to consider is not what's happening at other airports. They want you to look at your airport and charge fair and reasonable rates for your airport, such that you can be as self-sustaining as possible without accumulating an excessive surplus."

Mr. Sampson replied, “If we got a proper rent, we could expand services which would keep us self-sustaining, because we are not self-sustaining.”

Ms. Squiccimarro said, "Again, you have to charge what makes you as self-sustaining as possible. It's a combination of what are your expenses; what is reasonable; what is reasonable to the City and what is reasonable to the tenant, and what keeps the businesses here."

The FAA does not say that.

Ms. Squiccimarro continued, “Certainly, the FAA would be interested if all of a sudden you need more funding because they were losing tenants. It's a fine balance that you need to walk on. You have to focus on what’s here in Lake City and apply these standards to your airport.”

Ms. Squiccimarro bent the rules, but to some, that sounded good.

Community activist Sylvester Warren, who had promised the Mayor that he would not speak out from the audience, liked Ms. Squiccimarro’s remarks so much he couldn’t contain himself.

“AMEN,” Mr. Warren spoke out from the audience.

Mr. Sampson followed up, “Are you HAECO's lead attorney in negotiating this lease?”

Ms. Squiccimarro answered, “I am supporting HAECO's general counsel.”

Mr. Sampson asked about the mostly invisible Vernon Douglas, who recently showed up in the email trying to jam HAECO’s proposed lease on the January 3 agenda. Mr. Sampson asked, “Where was Vernon Douglas? I've spoken to HAECO several times. I see an email on the 28th that came from Mr. Douglas and to our attorney -- within 20 minutes, it was turned around and put on the agenda. But when I talk to HAECO people, Mr. Douglas isn't even retained by HAECO. So, is he a lobbyist for HAECO? Do you know the standing for that?”

Ms. Squiccimarro answered, “I don't know the specifics of that.”

Councilman Hill entered the discussion, “I'm not a great fan of HAECO. I don't agree with HAECO have done to this City for the last thirty years – twenty years – however long they've been out there."

Mr. Hill said he bumped into somebody at the grocery store who had three children and worked at HAECO. Mr. Hill said he doesn't want to see anybody lose their jobs, so he would support the contract. Mr. Hill concluded, remarking about HAECO, "They will be put on notice."

Mr. Jernigan wondered out loud how the contract figures were arrived at. He asked Ms. Squiccimarro if she had "anything to do with the figuring - what's reasonable - anything like that?"

Ms. Squiccimarro said, “I did not. I encourage my clients not to bid against themselves.”

The Mayor thanked Ms. Squiccimarro for her appearance and then said something completely unintelligible.

The Mayor did not invite the City's aviation attorney, its hired expert, to the microphone. Neither did the Mayor invite Mr. Booth to the meeting. It was clear that the Mayor did not want him there.

Councilman Hill, Chairman of the Airport Committee, had invited Mr. Ed Booth to the meeting. He asked Mr. Booth, "Do you have anything to add to that?"

Mr. Booth replied, “Yes, sir, I appreciate the opportunity.

The City’s Hired Aviation Expert Addresses the Council

Mr. Booth told the Council:

What you do today, if it's not enough, is going to condemn generations not yet born here in Lake City to a substandard airport that cannot live up to its potential.

We have heard the numbers; the numbers proposed are still not enough. Why should Lake City accept a 20% of what they're paying in Greensboro, North Carolina, for the same type of facility? There’s no rational explanation for that.

The 2017 appraisal would require them to pay about 2.2 million. Anybody would be thrilled, as Councilman Sampson mentioned, to go into a grocery store today and pay 2017 prices. But as I mentioned at the last meeting, the most telling number is the $4.71 a square foot HAECO charged a subtenant back in 2016-2017. So, by their own action, they have told us what is reasonable. And as I've said, you're going to condemn a generation not yet born to an airport that is not developable.

Ed Booth, avaition specialist and attorneyI disagree with HAECO's Council that the FAA is going to come in here and take names if we accumulate too much money. That money would be reinvested into the growth of the airport.

There's an industrial park adjacent to the airport that is begging for development in conjunction with the airport.

Their [the airports] runway lights that have been burned out that they can't afford to replace -- they live within their means. But the 1.6 million does not mean it is self-sustaining. So, you are foregoing any chance of this airport being an economic engine that can then bring prosperity to this community.

I was on the board of directors of the Jacksonville Aviation Authority. I was its secretary, and Cecil Field is an economic engine that is contributing to the revitalization of the west side of Jacksonville.

One thing I’ve cautioned you about is Grant Assurance 22, which is titled Economic Non-Discrimination. If you give HAECO a deal at seven cents, or 10 cents, or 12 cents, another company can come along next week, next year, two years from now, and demand the same deal.

I was retained as your aviation counsel to advise you on this, and I see no reason that your civic pride would cause you to do something that's clearly not in your best interest. And I also see no reason that HAECO would not be willing to pay your community what they're paying Greensboro, North Carolina.

I see no functional difference between that, and I do not believe it would be in your short-term or long-term best interests to ratify this new contract when we had set upon a plan of action that would have called for this to be done in an orderly fashion to arrive at a fair number.

I was not involved in negotiations. As far as I can tell, the City was not represented by aviation counsel in the face of these assertions by HAECO's counsel.

I'll answer any questions you have. But those are my feelings. I think I've made them well known during this 14-15 month process.

Thank you.

Councilman Jerinigan inquired, “I’ve got a question for you. So what you’re telling me or us is that HAECO counsel and you have not communicated at all?”

Mr. Booth answered, “Absolutely not. I was told in November I would not be participating in the discussions any further, and I have not. I have been here at the behest of certain Councilmen, having been retained by the Council in October and November of 2021, to look into this. So I had not been part of this.”

Mr. Jernigan followed up, “So who’s been negotiating with em’? Anybody, that you know of?”

Mr. Booth answered, “I don't - I don't know.”

Mr. Jernigan addressed City Manager Dyal, “Mr. Dyal, do you have any idea who’s negotiating with em’?”

Mr. Dyal asked, “You mean up to the last Council meeting?”

Mr. Jernigan: “Yes.”

Mr. Dyal answered, “I was.”

Councilman Hill thanked Mr. Booth, “Mr. Booth, again. I thank you for comin’. But I’m tellin’ you, that guy when he spoke with me when I was coming out of the grocery store with those kids, that really tugged at my heart. This guy was so afraid of losing his job -- I don't want that on my conscience.

Mr. Booth replied, “Sir, with all due respect, he's not going to lose his job long-term. You have an 8,000-foot runway, which is an asset that few communities have -- many dream. The world is going to beat a path to your door for similar businesses if this doesn't work out.”

Mr. Booth continued, “All I am recommending is that you insist that HAECO pay, not what they're paying Greensboro, North Carolina, what the 2017 appraisal called for, what they charged one of their subtenants. How can they disagree with that number? They wouldn't admit to taking advantage of someone. [HAECO was charging I** $25,000 a month for one hanger]

Councilman Todd SampsonCouncilman Sampson added, “So, how can we expect a company that takes advantage of the City on the lease is not taking advantage of their employees with substandard pay rates? We can’t.”

Mr. Booth answered, “I can't tell you that.”

Mr. Sampson continued, “It's not to say that HAECO, with their $67 million net profit last year in North America, couldn't pay more on the lease to at least match what they're doing in N. Carolina.”

“It's very disconcerting that we allow the good ole’ boy system here to work against the taxpayers, because every taxpayer in the City, the roughly 12,000 people here --  they're subsidizing this Chinese company. And to me, that's the real issue.”

“Why are we asking Lake City residents to subsidize a company that made $67 million in net profit?”

Mr. Sampson concluded, “It seems like -- take those getting a special deal, through special lobbying, through special interests. And I think that's going to need to be investigated at some level.”

“As far as what they're paying now. I don't see it.”

The Council voted to give HAECO its sweetheart deal 4-1. Mr. Sampson was against.


The discrepancy between the 2017 airport appraisal of $1.50 sq. ft. and the Council-approved lease rate of $.08 sq. ft. defies rational explanation.

Exactly what former Chief Judge Vernon Douglas was doing in the mix is still unknown, as is the reason for the contract lobbying by community activist Sylvester Warren, who appeared to be representing both Vernon Douglas and HAECO’s Mark Easton.

The new City Attorney, Todd Kennon, seemed at times to be working for HAECO rather than the City Council.

The overt rush and conniving to keep the City from getting an up-to-date airport appraisal and the failure of the City Attorney to share the 2017 appraisal do not pass the smell test.

In recent times, Lake City has received over $24 million in federal government airport grants. The feds have a stake in the goings on at Lake City's airport and the cozy relationships between the players involved in the recent sweetest of sweet deals that Hong Kong Aircraft Engineering Company (HAECO) worked out with the City of Lake City. An agreement that, over time, will end up costing Lake City millions and millions to the benefit of HAECO and possibly others. 

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