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Paulding airport developer pulls out of bond payments, cites dispute with county

The bitter dispute over a plan to attract commercial airline flights to Paulding County's tiny airport has encountered even more turbulence -- and is now affecting payments on the county's airport bonds.

The company that struck a deal to attract commercial airline flights to the Paulding County airport says it will stop making payments on the airport bonds, citing heated opposition from county commissioners to the airport commercialization plan.

That leaves it to the county to make the $401,140 bond payment due Feb. 1. Payments are due twice a year.

The company, Silver Comet Terminal Partners, run by Propeller Investments CEO Brett Smith, said it will not help with bond payments "until the County ceases its blatant interference," but that Silver Comet remains committed to fully developing the airport.

"To be clear, when the three commissioners stop interfering, Propeller will continue as intended," Smith said.

Silver Comet Terminal Partners letter

It's the latest political grenade to be thrown in a county where the plan announced in 2013 to attract airline flights has led to lawsuits, political infighting and discord among residents.

Through it all, the airport authority has soldiered forward on the airport commercialization plan, though it is now in limbo pending an environmental assessment that sits in the hands of the Federal Aviation Administration.

Meanwhile, the airport commercialization plan has lost the support of a majority of county commissioners following a 2014 election that added opponents of the airport commercialization to the commission.

With a majority of commissioners now opposing the airport commercialization, the county has sued the airport authority, attempted to withdraw its application for commercial certification of the airport and voted out some members of the airport authority board.

Smith sent a letter to the Paulding airport director and chairman on Thursday saying the commissioners are interfering with the airport authority's contractual obligation to seek commercial certification.

When the airport authority first issued the $3.6 million in bonds back in 2013 for taxiway work, some raised questions about the possibility of the expense coming back to taxpayers.

The 10-year bonds are backed by the county, but the airport authority struck a deal with Silver Comet Terminal Partners for Silver Comet to make the payments on the bonds.

Taxpayers are "probably not going to be real happy to know that the company the airport authority went into business with is not going to keep their commitments," said commissioner Todd Pownall, who opposes the airport commercialization. "Maybe it's because their investors are wanting them to back out."

Paulding County commission chairman David Austin, who supports the airport commercialization, said the county has reserve funds to make the bond payment.

"I never dreamed it would come to this," Austin said. "I'm just sort of tired of all this negativity."

When asked whether paying the bonds from county funds might affect tax rates, he said, "It's hard for me to say right now.... My recommendation would be that we back off all the negative that's going towards the commercialization of the airport and let it take its normal course."

Smith told the county that Silver Comet Terminal Partners has spent more than $1 million for the previous two bond payments, engineering work at the airport, terminal renovations and marketing.

Austin said he believes Silver Comet is within its rights to stop making the bond payments. "You know, two years of no income from that is much longer than I think I could have done if I'd been on the [Silver Comet Terminal Partners] team," Austin said.

Paulding airport director Blake Swafford, who helped engineer the airport commercialization plan, said Thursday: "I certainly understand why the folks from Silver Comet don't want to make any more bond payments when the county continues to throw up every roadblock it possibly can."

But Pownall said Silver Comet's contract is not with the board of commissioners, but with the airport authority.

The airport authority does not have the means to pay the bonds, because it does not have revenue from commercial operations, Swafford said.

"At the end of the day, who's losing out is the taxpayer in Paulding County, because not only are they not getting the jobs and convenient air fare, but ultimately they're having to pay the bills for not only the bond, but also all the attorneys for the airport authority and the county," Swafford said.

When asked whether the airport authority might legally challenge Silver Comet's non-payment, Swafford said: "I think it would be a very, very difficult case for the airport authority to try to sue them... I'm not even sure if the airport authority would pursue it," he added.

When the bonds were issued in 2013, four out of the five commissioners at the time supported the airport commercialization.

"Now, of course, the situation has changed 180 degrees," with three commissioners fighting the commercialization, Swafford said. "I certainly couldn't have foreseen that drastic of a change. Certainly I don't think Silver Comet could foresee that drastic of a change. The situation we're in now is absolutely the worst-case scenario."

Swafford said the airport authority still supports commercialization.

"We still think that it's viable. We still think it's going to be economically a good thing for us," Swafford said.

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About the Author

Business reporter Kelly Yamanouchi covers airlines and the airport.