Board votes to build new fuel farm at Ocala airport

March 02--The city of Ocala's Airport Advisory Board on Thursday voted to use state grant dollars to build new fuel tanks at Ocala International Airport.

In the meantime, the board will meet with the airport's fixed-base operator, Landmark Aviation, to determine how the two entities can work together to, perhaps, bring down aviation fuel prices.

The City Council will make the final determination about the grant dollars.

"I think the most important thing that came out of the meeting is sitting down and really partnering with the fixed-base operator and getting on the same plane with them, so to speak, and really going forward to help with economic development for the city," said Terry Crawford, the former Airport Board chairman, adding that the airport is an economic tool.

The city has a contract with Landmark to sell fuel and provide other services at the airport. There are still about five years left on that contract. When the city proposed creating its own "fuel farm," Landmark expressed concern that the city would be competing with Landmark for fuel sales.

It is no secret that the relationship between Landmark and the city, which owns the airport, has not always flown smoothly. While the city applauds Landmark's service and staff, it historically has been at odds with the company about its high prices for aviation fuel. The city receives $0.035 for every gallon of fuel Landmark sells. The high prices, the city says, result in the loss of business when pilots fly to other airports to refuel at lower prices.

Tracine Anderson, Landmark's general manager, contends that the company has expenses that other airports that provide only self-serve fuel or are run by municipalities do not have, such as providing trucks and training and paying staff. She said she has stakeholders for whom she must turn a profit. She also said that most customers do not pay the listed price but get discounts based on usage. She said only 10-11 percent of her sales are retail.

But in comparing Landmark's prices with similar facilities, city Airport Director Matthew Grow says Landmark's prices are still too high. Jet A fuel in Ocala is $6.96 a gallon, compared with Page Field in Fort Myers, where it is $5.51 a gallon. Ocala's AV gas is $7.37 a gallon, compared with $5.25 at Page Field

When Landmark's contract expires, the city plans to put out a request for proposals to get the best deal for the city. Those negotiations could possibly include building a new terminal building. A new terminal, the city says, would enhance its economic development efforts by providing a good first impression of the city for business people who fly into town.

What was pushing Tuesday's discussion is that the Environmental Protection Agency wants Landmark to repair or replace three fuel tanks.

It would cost Landmark $51,308 to repair them and $230,000 to replace them.

Landmark proposed installing new tanks if the city would extend its lease for five years.

The city, which has an opportunity to get a $320,000 grant from the Florida Department of Transportation and which views Landmark's lease as an impediment to its plans to improve the airport, countered with an offer to build a new, state-of-the-art fuel farm. The city would allow Landmark to use the new tanks, saving the company the repair costs, if Landmark would cut its lease by two years. The FDOT grant would require an $80,000 match.

Rather than cut its lease, Landmark said it would just repair the current tanks.

On Tuesday, Landmark said it may also pay the grant match if the city used the grant dollars for the fuel farm. It said the EPA would extend the amount of time to fix the tank problem if the city expresses definite plans to build new tanks.

"We have developed a relationship that's not very healthy," Landmark's Anderson told the board.

Crawford suggested the city conduct discussions with Landmark, which was purchased by the Carlyle Group at the end of 2012.

"They are a different company," Crawford said.