Another contract controversy in Albuquerque

Albuquerque Mayor Martin Chavez has said publicly that no one gets a no-bid, long-term contract under his administration.

But as the mayor aspires to win a third consecutive term as the city’s chief executive in October’s municipal election, the mayor and city staff find themselves arguing with a city contractor over whether the mayor violated his rule against no-bid, long-term contracts with a firm at the city-owned Double Eagle II Airport.

The contractor, John H. Bode of Bode Aero Services, which operates Double Eagle II, in a deposition taken earlier this year suggested that the city violated the mayor’s absolutism with a no-bid, long-term contract with Tri-Motor LLC.

Documents show that in May 2007 Tri-Motor LLC, secured a 30-year contract to lease land at city-owned Double Eagle II Airport to build a hangar. Click here to see the lease agreement.

Over the next year, the city amended the contract three times, giving Tri Motor LLC the option to renew the lease an additional 20 years, to 50 years, and the option of leasing more land from the city to construct two additional hangars. Tri-Motor also was able to defer for one year the rent and fee payments it was required to pay the city and to extend a period of time a charter school could operate on the land leased by the firm thanks to the changes, documents show. Click on 1^st, 2^nd and 3^rd amendments.

John Casburn, Tri-Motor’s managing member, signed each of the documents.

Bode testified in a deposition that the city’s treatment of Tri-Motor LLC stands in direct contrast to the way Chavez and the city has treated his firm, and that Tri-Motor’s presence has hurt his business.

Bode has sued the mayor and the city in state and federal courts, accusing the mayor of purposely scuttling a 20-year extension of his firm’s term as the airport’s operator as retaliation for Bode’s refusal to provide Chavez and his staff with reduced or free air travel. Bode also attributes his lease troubles to concerns he and others raised about safety at Double Eagle II and how federal money was spent there, as well as to related complaints he and others filed with the Federal Aviation Administration.

But Ed Adams, the city of Albuquerque’s chief administrative officer, said Bode is mixing apples and oranges when he describes the Tri-Motor agreement as a no-bid contract. It was a simple land lease, which doesn’t require the city to go out for competitive bids, Adams said. A multiple-service agreement, such as the contract Bode has as Double Eagle’s Fixed Base Operator, involves sending out a request for bids, analyzing the bids received and negotiating an agreement with the winner, Adams said.

Also Tri-Motor LLC approached the city, not the other way around, about building a hangar at Double Eagle, a version Casburn confirmed during an interview.

Bode should welcome more airport development, Casburn added.

“In my opinion, it makes no sense why you don’t want as many people out there as you can get,” Casburn said. “One hangar brings in more business, it brings in more gas. I don’t understand it.”

Bode would like “to make the comparison” between the Tri-Motor land lease and a no-bid contract, but it’s wrong, Adams said. “This is not a service contract. This company is not providing a service to the city. They are not entering into a service contract,” he said.

Adams added, “Just because you read it in a deposition does not mean it is true.”

The competing interpretations of what the Tri-Motor contract means — evidence of the city cozying up to a developer at the expense of another or a case of a simple land lease — offer a window into a pitched battle between Bode and the city that currently is in federal and state courts, with Bode alleging that he was shaken down by staff in the Chavez administration while city representatives rebut the attacks by calling Bode mistaken or worse.

The Independent reported July 24 that Bode had alleged that the state’s economic development secretary, Fred Mondragon, repeatedly pressured Bode to provide free or reduced-price air travel for  Chavez. Bode said in his deposition that Mondragon did that when he worked as the city’s economic development director, a post he had before going to work for Gov. Bill Richardson.

Mondragon has denied the allegations.

Bode also has testified in his deposition that he captured two city officials on videotape telling him that the mayor was responsible for holding up the leases.

City officials have hit back hard, with Chavez calling the lawsuit “absolute garbage” and adding that “For $150 and a lawyer, you can say anything you want. That’s all that has happened here.”

The mayor also has accused Bode of wanting a no-bid, long-term contract to keep the Fixed Based Operator contract at Double Eagle II. The mayor has indicated that he wants to open up the contract and take bids on it, an action currently on hold as Bode’s lawsuits make their way through the courts.

In that context it is possible to view Bode Aero Services as wary of Tri-Motor as eventual competition for future fixed base operator contract, who sells fuels and maintains aircrafts at the city-owned airport, among other services.

Tri-Motor isn’t trying to edge out Bode Aero Services, Casburn said, although he added that there are people he knows who might be interested in running a general aviation airport like Double Eagle II.

“They’re some people I am involved with in other things who are interested,” Casburn said. “Bode has expressed an interest through a pipeline of possibly selling their FBO. There are people I know who might be interested in possibly buying.”

The city’s treatment of Bode and his firm have led one high-profile observer to pointedly criticize the city’s actions, particularly the city’s demand that Bode sign two non-negotiable items months after he thought negotiations on a contract extension were complete — provisions he felt would fatally damage his business.

“I am appalled that the City would have so little regard for the people that they do business with, that they entrust the public funds to that they would not evenly include them in any kind of after-the-fact discussions that amount to behind the scenes, ‘Let’s see if we undo this contract that is otherwise a good contract,’ ” State District Judge Geraldine Rivera is quoted as saying during a Aug. 19, 2008, court hearing.

Bode had asked the judge to require the city to recognize the firm’s lease extension with the city.

“There is an elephant in the room, folks,” Rivera is quoted as saying. “Nobody’s bringing it up, but we all have an idea of what it is. The day that government exists just for politics and how it can benefit the principals of our municipalities is the day we’re all in trouble. And thank God we have three branches of government.”

Rivera ruled for Bode last year and required the city to recognize the agreement extending Bode Aero Service as airport operator, a ruling that is stayed while the city appeals it.

Bode made clear in his deposition that the favorable terms the city gave Tri-Motor aren’t just a future worry, but may eat into his current business.

In one case, Tri Motor’s 50-year lease hurt negotiations Bode was having with a company wanting to put up a cell tower at Double Eagle II, Bode is quoted as saying in his 391-page deposition.

“It was a lease that we were working with Crown Castle until we — until the other developer on the airport was given additional years, and — and we can’t match that,” Bode testified.

Instead of agreeing to a 20-year extension Bode thought he had negotiated with the city aviation department, the city has demanded that Bode agree to a 18-year lease extension, calling it non-negotiable. It is a timeline that Bode has contended in a federal lawsuit would impair his company’s ability to borrow money.

Bode also testified that the city’s contract with Tri-Motor appeared to be an attempt to piecemeal some of the services that Bode Aero Services is resonsible for.

“I think they have now with the — with the  Tri-Motor hanger that’s built,” Bode is quoted as saying. “The hangering is — the real estate development is — is one side of our business.”

Casburn doesn’t go out of his way to criticize Bode Aero Services, but he made no attempt during an interview with NMI to hide the tension that he says exists between Tri-Motor and Bode Aero Services.

“They don’t even talk to me,” he said. “They’re very difficult to deal with. They kind of control it more than an FBO should.”

Casburn said he had hoped to house a charter school in the hangar but that Bode Aero Services had opposed it, making it all but impossible to put out there.

“The school said forget it, there are too many hassles,” Casburn said.

He added that because of the economy Tri-Motor had yet to land a leasee for its hangar and it had not optioned more land at Double Eagle II to build additional hangars

Rivera, the state court judge, however, took time to note the discrepancy in how Tri-Motor and Bode Aero Services were treated by the city, especially the length of agreements before she ruled in Bode’s favor.

“To shorten it by two years, I don’t understand what they’re thinking,” Rivera is quoted as saying in the court transcript from last year, referring to the 18 years, instead of 20, that the city wanted for the Bode extension. “This is almost silly that we have had to be here to do this, and I’m embarrassed for the City for this. The fact that the Casburn Lease, which is on airport property, is 30 years with two ten-year renewal options, 50 years, and you know darn well that if they’re making money they’re going to exercise their options, unless the City goes in to renegotiate and gives them something else to make it worth their while.”