Springfield, MO

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Worldwide Aircraft feels effect of dispute

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by Karen E. Culp

SBJ Staff

Worldwide Aircraft Services' dispute over its lease agreement with the Springfield-Branson Regional Airport and the city is starting to affect its business, company officials said.

Though its customers are not yet shying away, the company has lost seven of its 46 employees, and those seven had been longtime, well-trained workers who will be hard to replace, said company president and co-owner Jim McClean.

The city and airport filed an answer to Worldwide's petition for declaratory judgment. The dispute is essentially over when the lease expires, whether it expires in 2001, as Worldwide has asserted, or whether it expires in December of 1998, the point after which no lease rates were established for the facility.

Worldwide is an aircraft-maintenance and -repair business which has occupied Hangar One since 1991. McClean co-owns the business with David Dunham. Worldwide filed its petition for declaratory judgment with the Greene County Circuit Court July 16. The city filed its answer Aug. 14.

In the answer to Worldwide's petition, the airport and city "affirmatively (state) that the alleged lease expires on Dec. 31, 1998." The city also states that it has had "numerous negotiations for a lease beyond Dec. 31, 1998 ... and have not established any payments or consideration for the leased premises for any time period beyond Dec. 31, 1998."

The city will need the land Hangar One occupies as part of its terminal expansion, which includes an intermodal transportation facility to be constructed where Hangar One is now.

James Briggs, assistant city attorney and airport counsel, said the construction on that facility will take place beginning in July of 1999.

Though Worldwide officials said they knew ever since entering into a lease agreement with the airport that expansion was a possibility, they were not aware that the negotiations would take this turn.

"We knew all along that there would be expansion, yes. But we did not know that we would be placed in this position, where we don't know when our lease ends or what we'll have to do as a result," McClean said.

Though the city has said there is no lease agreement beyond December, Worldwide contends it still has time remaining in its lease, until 2001, or possibly, 2006, with the extension it would have been allowed.

McClean said, however, that if the city would only concede that the company could stay until the end of 1999, it would help considerably.

During its negotiations with the city prior to its filing the petition for declaratory judgment, Worldwide and the airport tried to negotiate another lease option for the company.

David Vorbeck, assistant to the president for Worldwide, said nearly every lease agreement had a termination date of 1999. In its answer to the petition, the city stated that the negotiations had not yielded an agreement.

The city consented to the assignment of the lease of Hangar One from its previous tenant, Trans States Airlines, to Worldwide. That transaction, where Trans States assigned the lease to Worldwide, took place in 1991, and the lease was modified as a result.

The city asks in its answer for the court to find that the lease "terminates on Dec. 31, 1998, and is void and unenforceable beyond Dec. 31, 1998, and that plaintiff has no interest in the leased premises beyond Dec. 31, 1998."

Neither party involved knew when the judge might render a decision in the case, but McClean said at Worldwide "we are being good Boy Scouts." The company is preparing for the prospect of moving into another airport.

"We hate to leave, and we hate what it means for the airport, but the fact is that we may not have a choice," McClean said.

The seven employees the company has lost in the past few months is more than Vorbeck ever remembers losing in a single year, he said.

"The airport may think this is good airport affairs, to handle things in this way, but we think they are going to damage affairs so badly that we'll want to pack our bags and go anyway," McClean said.

One of the company's biggest concerns is with its Repair Station Certificate, issued by the Federal Aviation Administration, which is tied to the facility in which the company does repairs.

Obtaining the initial certificate cost the company $100,000 and once the company is out of its current location, it must surrender the certificate and apply for a new one.

That process of getting re-certified, along with the other concerns that go along with moving an aircraft service and repair business, will result in about a six- to nine-month delay in the company's getting back into business after a move.

McClean said the company is not yet losing customers, but it has had to reassure its bank and the FAA that it plans to remain in business.

"We have no intention of stopping business. We are simply unsure, at this time, of how much longer we have in this facility," McClean said.

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