The Dallas City Council will consider giving a 39-year real estate contract at the city-owned Dallas Executive Airport to a company operated by a former member of the city’s economic development staff.
The proposed no-bid deal with Rodney Burchfield, managing director of Dallas development firm Burchfield & Partners, is championed by Mark Duebner, director of aviation, who said the long term lease is proper given the amount of time Burchfield will need to recoup his investment.
The two worked closely when Burchfield was with the city and helped examine new opportunities at Love Field, as well as Executive Airport.
The 39-year, 11-month deal, with three automatic 10-year extensions, also includes $3.5 million from the aviation department to help construct a new hangar and space for an aircraft maintenance operation that wants to relocate from Love Field. Burchfield will finance the rest of the project and perform some reimbursable infrastructure work.
The plan, which will go before the council at its April 11 meeting, “undercut” the city’s economic development department, city councilman Scott Griggs said.
“It’s being funded through the aviation department,” said Griggs, who as a member of the economic development committee cast the only ‘no’ vote against the project. “This is a huge entitlement we are giving away at a time we are scrutinizing every deal to see how badly an incentive is needed. They are handing a monopoly to [Burchfield] and it looks very bad.”
The item was initially scheduled for a simple yes/no vote at the regular city council meeting next week. Griggs said he pulled it and there will be a full conversation, with a question and answer session with Duebner and Burchfield, during the meeting.
“It’s essentially a 70-year lease and he gets to charge for maintenance and other fees and he’s going to make millions,” Griggs said. “This should get more attention before we get into it.”
Duebner defended the alliance with Burchfield and contends the private company is putting more on the line than the city.
“The developer is taking the risk here,“ Duebner said. “We could invest $20 million and do this ourselves, then turn around and lease it ourselves. But do we want to tie up airport funds to build hangars that we then lease out, or do we help the private entity bring its money in and help them make this work?”
The long-term lease has a sour precedent. Several council members in 2012 backed a 40-year deal with Dallas County Schools, which provided school bus service to over a dozen districts in the Metroplex. The proposed DCS plan was to put cameras on school busses. The deal was cut to 25 years and DCS imploded amidst debt and corruption last year, when voters elected to do away with the agency and a federal indictment implicated DCS leaders in a widespread bribery and kickback scheme.
The airport system gets less scrutiny, said council member Jennifer Staubach Gates, because its funding doesn’t come out of the general fund. That doesn’t mean airport deals should not be examined.
“The director of aviation has a lot of autonomy because we’re looking at things like streets and other quality of life issues,” Gates said. She noted that the good fortune of Love Field is financing the lesser known Dallas Executive Airport, “which has never made money.”
“The funds [of Love Field and Dallas Executive Airport] are commingled, and we use the economic benefit of Love Field to do these deals at executive airport,” she said. “I would think the FAA and Southwest Airlines and all those who have put money into Love Field should pay attention to that.”
Gates added that the proposed plan to be heard next week involving a former city employee deserves additional attention.
“Ethically, you only have to be gone a year from the city to be able to lobby. But if he’s been gone since 2015, it begs the question, ‘how long has this been in the works and who has he been working with?’”
Duebner said the project was proposed by Burchfield “around eight months ago.”
“Burchfield has been gone over two years, “ he said. “I don’t think there are any ethics code issues to deal with and quite frankly, there are a number of former city employees with city contracts, so it’s not all that uncommon.”
Nor are longer term leases at airports, with some extending to 99 years for real estate.
The city runs two airports, Love Field and Dallas Executive, which are self-funded primarily through gate fees and parking revenue. While Dallas Executive Airport has never made money, the revenue from Love Field increases every year, propping up the smaller airport.
For over a decade, optimists have paraded a series of comeback stories for the small airport in South Dallas, formerly named Redbird Airport.
“We’re excited about its future; we’ve made significant investment in it,” Terry Mitchell, City of Dallas assistant director of aviation operations, told an aviation trade magazine in 2005. “We think the market is there for the airport to really prosper.”
Burchfield was employed by the city from 2009 to 2015, and spent much of his time on aviation-related work after a grounding in the private sector dealing mostly with multi-family real estate. This would be his first airport deal on the private side.
“I did aviation real estate and business retention with the city at the time the Wright Amendment was lifted at Love Field,” Burchfield said. “We had developed this marketing plan so we could handle this expansion for Dallas Executive Airport.
He refers to a federal law that for decades limited long-haul flights out of Love Field, which was fully repealed in 2014 providing a boom to Love Field, where traffic increased 47 percent in the eight months after repeal.
After Burchfield left the city, he started his own company. In November, he leveraged his experience and contacts with the city to wrangle $1.35 million in funding in a version of Shark Tank put on by The Real Estate Council. The money was given specifically for the deal now before the council.
The proposed contract, even though it is perceived as lengthy by critics, is hardly a coveted deal, Burchfield said.
“We are taking a huge risk with our own money. There are no other developers lined up. When I worked for the city, we had events where we would try to market the available land at the airport, we’d invite all the major players in the city and less than five would show up. I see this as an opportunity that the other guys are not willing to look at.”
Steve Miller can be reached at [email protected].