Having spent $500,000 to convert part of an existing Toledo Express Airport building into a refrigerated processing facility, the Toledo-Lucas County Port Authority now is poised to lease the building to a company that would use it to handle cut flowers imported from South America.
A proposed option with Global Perishables Exchange and Express to lease up to 20 acres on the airport's south side will not be as lucrative for the port authority as suggested in October when the agency's board of directors approved funding for the cargo-building improvements.
That's because an investor group headed by developer Tom Schlachter, a former port authority director, has backed out of the project, leaving a man previously identified as a company consultant, Brian G. Friedman, to become its source of capital too.
Airport Director Paul Toth said Mr. Friedman, who did not attend a meeting yesterday of the port authority board's airport committee, had been satisfied to supply industry knowledge to the investor group when it was interested and believes strongly enough in the project's potential to risk $300,000 of his own capital now that the investor group has withdrawn.
Under terms approved yesterday by the airport committee and up for full review next week by the agency's board, Glopexx will lease half of the Air Cargo Building, on the north side of the airport just west of the passenger terminal, for five years for $8,000 a month.
The first six months' rent would be waived to help the firm get started, as would landing fees for aircraft delivering flowers to it.
There is widespread belief within the flower wholesaling and air cargo business that Toledo could become a major regional distribution center for flower imports that now land in Miami and are trucked north, a route that lengthens retail delivery time by several days and exposes the shipments to Florida heat, Mr. Toth told the committee.
Toledo's problem, Mr. Toth and port authority President James Hartung said, is that it has no track record handling the perishables business, and no one wants to take the risk of being the first to encounter unexpected problems.
"Everybody's waiting for somebody else to make the move," said Mr. Hartung, who called the airport's 4,400-square-foot processing center "the most entrepreneurial thing the port authority has ever done."
In a telephone interview later yesterday, Mr. Friedman said $300,000 is the bare minimum with which he would start the venture, but he hopes to raise more.
Chartering one flight from South America would cost more than $120,000, he said, so the project would have "a very short fuse" without greater capitalization.
"This is a very difficult thing to do, and there's a lot of moving parts to it that we have no control over and the airport has no control over," Mr. Friedman said.
The land option, if exercised, would allow Glopexx to build its own, larger perishables processing complex with access to the air-cargo apron on the airport's south side, near BAX Global facilities.
The Air Cargo Building was used by passenger airlines to handle freight and mail shipped via their planes.
Instead of a 10-year option with a $1.5 million up-front payment to the port authority, the current proposal grants Glopexx a five-year option on the land at no cost, with the option period beginning when perishables flights to Toledo Express begin and expiring if 12 months go by with no regular flights.
When several airport committee members questioned the port authority's potential benefit from the project, Mr. Toth said that beyond the initial rentals, the perishables business would generate landing fees and, if business grows, apron-access and property lease revenue.
Waiving rent and landing fees for the first six months, the airport director said, will give Glopexx a chance to absorb any initial losses it incurs from early flights having empty space on them.
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