Lawsuits question Paulding airport commercialization plan

A recent flurry of lawsuits is raising questions about the effort to commercialize Paulding County's Silver Comet Field as the second commercial airport in metro Atlanta.

Three separate lawsuits -- filed by Paulding County, a group of residents and the airport authority's development partner -- each ask whether the Paulding County Airport Authority had the legal right to apply for commercial certification from the Federal Aviation Administration.

Another skirmish influencing one of the lawsuits is a decision by the airport authority's development partner Silver Comet Terminal Partners to pull out of airport bond payments in January, citing a dispute with the county. That left it to the county to make the $401,140 bond payment due Feb. 1, and led to a letter last week from an attorney representing the county, alleging that Silver Comet's move was a breach of contract.

This week, Silver Comet Terminal Partners filed its first federal lawsuit, seeking a declaratory judgment on the airport authority's legal authority to apply for the commercial airport certificate known as a "Part 139" certificate, as well as its authority to strike agreements with Silver Comet Terminal Partners that required bond payments.

Serving as a backdrop for the lawsuits is a political turnabout in Paulding County centered on the airport commercialization issue.

When the Paulding County Airport Authority announced its plan to commercialize its tiny general aviation airport nearly three years ago, all but one of the Paulding County Board of Commissioners' five members were in favor of the plan.

But with three new commissioners elected since then, four of the five members now oppose airport commercialization. Only the commission chairman, David Austin, supports the commercialization plan.

The lawsuits come as the airport authority remains supportive of the airport commercialization, while a majority of county commissioners are now against it and are seeking to overturn the airport authority's plans.

The lawsuits question whether the airport authority was authorized to apply to commercialize the airport, or whether the county as the owner of the airport holds the right to make such a decision.

Silver Comet Terminal Partners, a subsidiary of Propeller Airports LLC, argues that if the county is not authorized to apply for commercial certification, it didn't have the authority to strike its 2013 agreement with Silver Comet Terminal Partners requiring bond payments. "How can the county ask us in good faith to make a bond payment, at the same time they're saying the agreement wasn't even valid?" Propeller Airports CEO Brett Smith said.

Propeller says it acted on the belief that the airport authority was authorized to do so. But if a judge were to rule the airport authority was not authorized to apply for commercialization, the company says that could spell an end to the plan.

"This entire plan to develop commercial passenger service was based on a Part 139 certificate -- without that Certificate, the essential foundation for the entire plan is gone," Smith said in a written statement. "We would certainly seek to be compensated based on the representation that the Airport Authority had legal power it didn't have."

Charles McKnight, an attorney representing Paulding residents who oppose the airport commercialization, said Silver Comet "has a contractual commitment to pay for the bonds, which is not conditioned on the 139 application."

"I would expect the taxpayers of Paulding County to have Silver Comet honor the contract," McKnight said.

Since 2013, there have been about nine lawsuits filed in connection with the Paulding airport commercialization so far -- not counting a complaint filed by the City of Atlanta to the FAA challenging the Paulding airport commercialization. Five of the lawsuits have been filed in the last five months.

Of the lawsuits filed, one was settled, triggering a requirement for an environmental assessment. The environmental assessment is still underway. Another legal challenge over the bonds for a taxiway expansion was won by the county.

Amid all of the legal challenges, Paulding County Airport Authority director Blake Swafford said: "We still think we have the ability to do the 139 [commercial certification]."

But, Swafford noted, "Unfortunately the entirety of what's going on with the airport and the county and Silver Comet has gotten increasingly complicated."

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About the Author

Kelly Yamanouchi
Kelly Yamanouchi
Business reporter Kelly Yamanouchi covers airlines and the airport.