Million Air Operating Without License At SBD

Jan. 26--SAN BERNARDINO -- Million Air, the upscale jet refueling facility at San Bernardino International Airport, has been operating without a business license since April, city officials said Thursday.

The facility, which caters to private and corporate aircraft, has been the most high profile business drawn to the airport and has been touted by airport officials as an example of the airport's potential prosperity. It began operations in 2010.

Franchisee Scot Spencer, who is the focus of a federal corruption investigation into allegations of criminal conspiracy, bribery, money laundering and wire and mail fraud at the airport, has not renewed his business license, said Vanessa Barajas, business registration inspector for the city of San Bernardino.

Spencer also has failed to provide the city with Million Air's annual gross receipts, which are used to determine the business license renewal fee, Barajas said.

Spencer did not respond to a request for an interview Thursday. He entered into a 10-year franchise agreement with Million Air, a Houston-based corporation with 30 franchises across the continental U.S., Alaska and Canada, in 2007.

Board of Supervisors Chairwoman Josie Gonzales on Thursday called the situation at the airport "a mess."

"It's a whole back-and-forthing, contracting under different names, using one (company) to pay the other . . . it is a mess," Gonzales said.

She said she wasn't surprised Million Air had been operating without a license, or that any of the other business entities Spencer is tied to were registered with the city.

"When it comes to businesses opening up, that department waits for people to come in," Gonzales said of the city's business licensing department, which is overseen by the City Clerk's office.

When asked what it would take to turn things around, Gonzales was quick to say city officials need to stop fighting among themselves and agree on a common vision.

"They need to put their differences aside for the best interest of their residents, and they need to turn that fighting around and start fighting everything that's wrong," Gonzales said.

Sandy Nelson, business development officer at Million Air's Houston-based headquarters, couldn't be reached for comment Thursday.

The county held its annual State of the County Address at Million Air last year to much success, and plans to hold the event there again in February.

"This is the continuing saga of the failure to properly manage this airport and the ability of the agencies . . . to move forward with credible and honest investors," said San Bernardino County Supervisor Neil Derry, who also serves on the board of the Inland Valley Development Agency, or IVDA, which oversees the airport's development and funding.

Spencer came to San Bernardino to develop the airport in 2005, bringing with him a checkered past that included more than four years in federal prison for bankruptcy fraud in connection with another soured airport deal. Still, San Bernardino Mayor Pat Morris and other officials supported Spencer, acknowledging they were aware of Spencer's background but touted him as the best man willing to do the job.

Derry, a former San Bernardino city councilman, said business license fees are a major revenue stream for the city, and wonders if the city has filed a claim against Million Air, or if the business is getting preferential treatment.

"It also begs the question of whether the city is doing a good job of following up with businesses doing business in the city," Derry said. "I find it hard to believe the city didn't know about this."

San Bernardino Mayor Pat Morris couldn't be reached for comment Thursday, but his son and chief of staff Jim Morris said the situation will certainly prompt city officials to take a closer look at how business licenses are processed.

Roughly 80 FBI agents swarmed the airport in September, serving warrants at several administrative buildings and hangars, including Million Air, where Spencer's office is located.

The FBI is trying to establish the relationships between Spencer and several other airport officials and Morris. Among others implicated in the investigation are former airport directors Donald Rogers and T. Milford Harrison, Spencer's father George Spencer, assistant airport director Mike Burrows and aviation director Bill Ingraham.

In December, Spencer and T. Milford Harrison, both managers of San Bernardino Airport Management, LLC., the parent company of Norton Property Management Services, LLC., filed for Chapter 11 bankruptcy protection on behalf of Norton Property Management Services, LLC., one of 16 corporations and limited liability companies under investigation by the FBI.

Neither Norton Property Management Services nor any of the other 15 companies tied to Spencer and identified in the FBI search warrant, including Million Air, are registered with the city's business licensing department, a search of the city's website revealed.

Heather Gray, spokeswoman for San Bernardino, didn't respond to multiple e-mails and telephone calls Thursday seeking comment.

San Bernardino City Councilwoman Wendy McCammack said airport officials should be verifying and monitoring all entities with whom they do business with regarding licensing and compliance with all city, county, state and federal laws.

"Without a city of San Bernardino business registration certificate, any companies funded with taxpayer money are in breach of their contracts with the airport," McCammack said.

In other airport news, the IVDA, at the request of the airport's interim director A.J. Wilson, approved $9 million for the completion of a customs building at the airport, Gonzales said, adding that she requested that Wilson provide an itemized list of what the money will be used for at the next IVDA meeting.

Reach Joe via email, call him at 909-386-3874, or find him on Twitter @SBCountyNow.

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