Cost of Castle business may go up

Private firm is developing former military base


CASTLE -- The private company set to revitalize Castle Airport Aviation and Development Center announced and then retracted a plan to charge maintenance fees to its businesses, as the proposal still needs county approval.

Federal Development Inc. sent a letter last week to Castle's 60 tenants telling them about a plan to charge 8 cents for every square foot they lease, which equates to thousands of dollars every month for some businesses.

The county was aware of a plan to eventually impose maintenance taxes, but didn't know a letter was sent to tenants, Merced County spokesman Mark Hendrickson said.

"It's premature at best to discuss what the fees would be," he said. "The Board (of Supervisors) does not have the proposal in front of them."

Federal's President John Infantino said a retraction letter will be sent to all the businesses explaining that the company sent the notice too soon and that the fees won't start being collected in June.

"We thought things would be closer in the county negotiations," he said. "Everyone's anxious for things to happen."

The county is hammering out a long-term contract with Federal Development to revamp and revitalize the 1,900 acres once home to Castle Air Force Base, which closed in 1995.

The Washington, D.C.-based company will manage and invest in the center, while the county retains ownership of the land. The deal is expected to be before county officials next month.

If the taxes are approved as proposed, the money collected by the developer would total $744,365 annually and be used for Castle's common areas, which could include landscaping maintenance, lighting, general repairs and trash collection.

Infantino said his company and Merced County will take another look at the rates to make sure they are applied fairly to all the businesses.

"We are going to work with (the tenants). They are our biggest asset," he said. "But on the same token, you can't please all the people all the time."

Gemini Flight Support is one of Castle's businesses that's unhappy with the proposal.

Besides selling jet fuel, the company rents hangar space to pilots, and the tax could more than double what they pay the developer for the 33,000 square feet. In maintenance costs, they'd pay $2,700 a month and $32,000 annually.

"That puts us out of business," Vice President Jim Price said. "Everyone is going to feel a real hard pinch."

The 12 pilots would likely look for other airports to store their planes if the cost was passed along. Price said Federal shouldn't push away businesses as it tries to revamp the decommissioned base.

"This is basic economics 101," he said.

Federal's proposal was never brought to Castle's businesses for a discussion, and Gemini President Stan Thurston said it needs to be rethought.

"This is unprecedented," he said. "They're picking our pocket."

Almut von Biederman, Federal Development's managing director, said employees found support for the plan when they surveyed Castle businesses.

"Our vision is to create something that's appreciated by the community," von Biederman said.

Of the 60 tenants, she said she's only heard from four businesses upset about the proposed fees.

Mark Canlas, flight operations manager for Castle's American School of Aviation, said he was unaware of the proposal, but feels like it's being done last-minute.

"Where is our rent going in the first place?" he said. "The way we see it is that we pay rent but nothing is happening to our buildings or parking spaces."

The school leases a 10,000-square-foot office building and some dorm rooms, which means the tax would be more than $800 a month.

Infantino, the president, said his company is gearing up to start improving the former base, which is key to attract new business.

"In the next three to five years you won't recognize the center because of all the improvements that have been made," he said. "We want to create a first-class commercial environment."

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