City negotiating lease for 911 center with airport after discovering ownership issues

For years the City of Great Falls thought it had full ownership of the facility that is now the joint 911 dispatch center across the street from the Montana Air National Guard base and the Great Falls International Airport, but it turns out that’s not the case.

Early last year, Airport Director John Faulkner and his staff were attempting to aggregate all of the airport property into one legal description and discovered that the title to the property was in the city’s name at the Cascade County Clerk and Recorder’s office though it was still included in the airport’s master plan map.

After unsuccessfully attempting to negotiate with the Federal Aviation Administration to release the property from FAA requirements, the city is now negotiating a lease agreement for the property with the airport to allow the 911 dispatch and emergency operations center to remain in the facility while also protecting the city’s substantial investment in the property over the last 30 years.

“We were really upset, we were really frustrated,” when city found out about the issue said City Manager Greg Doyon during the Aug. 1 work session.

Faulkner attended the meeting and said, “I’m sorry this happened to all of us.”

The proposed lease agreement will run through Aug. 30, 2047 with two additional five-year renewal options by the city. The rent would be an estimated $104,400 over the term of the least to construct a new entry road along the southwest border, relieving congestion on the intersection with the entry to the Montana Air National Guard if and when the old Skyline bar property is redeveloped. Faulkner said those property owners were planning to redevelop in the near future.

Should the road construction cost more than $104,400, the airport will cover those costs.

During the first five years, the only termination option is for default of the agreement. After the first five years, if either party desires termination, 48 months notice is required and if the airport terminates, it retains all site improvements and will pay the city any unamortized portion remaining of the verified costs of the road construction, and a $2,000,000 termination payment if termination occurs within first 15 years of initial 30 year lease term, or $1,000,000 if termination occurs in the second 15 years of the initial 30 year lease term.

If the city terminates the agreement during the first 15 years, it has 60 months to remove and salvage 911 center building and site improvements and sell them, retaining all proceeds.

The agreement will also require the city to execute a Quit Claim deed to the property to clear the title of a 1997 Quit Claim deed putting the property in the city’s name.

To understand how we got here, we’ll walk back through those 30 years, but this is a very brief summary of a complicated series of events based on city records and discussion during the Aug. 1 work session.

The Regional Airport Authority was created in 1980 by the city and the county, and the Great Falls municipal airport authority was abolished.

In 1985, the community began work to make a competitive proposal to the FAA for an Automated Flight Service Station, or FSS. That included approval to spend $868,780 with $210,044 coming from what was then the Economic Growth Council and $175,000 annually for three years from city funds. It also required identifying land to be annexed into the city for the facility.

The community was successful in their bid for the FSS and in 1986 submitted an application for a federal assistance grant signed by both the city and the county.

A provision of the grant was that the city-county “will not sell, lease, encumber or otherwise transfer or dispose of any part of its title or other interests in the property shown on Exhibit A (the airport master plan map) to this application…for the duration of the terms, conditions and assurances in the grant agreement without approval by the Secretary [of Transportation].”

In 1986 the city-county received $52,940 for land acquisition and two months later the amount was increased to $180,000. Both the city and county signed off on the grant, agreeing to the provisions.

Different federal programs were used to acquire the land than those used to construct the facility, causing a number of issues throughout the next 30 years.

In a 1988, the community development director wrote in a staff report that Great Falls had won a statewide competitive bid for the FSS and that the facility needed to be built and ready for occupancy by 1989. But the city also received a letter from the FAA stating that automation equipment wouldn’t be delivered until 1993 and that the FAA wouldn’t close other FSS facilities around the state until 1993. The FAA letter indicated it wanted the Great Falls facility open in late 1989 with 20-25 jobs with the final staffing at 45-50.

The community task force that worked to get the facility based in Great Falls met with FAA representatives in 1988 asking for guarantees of staffing because it was uncomfortable recommending to proceed with construction of an 8,000 square foot building in 1998 if employees wouldn’t be in place until 1992-93.

In 1987, the airport director told city officials that the FAA had called and said the automated equipment would be delivered in 1990, but the community task force still wanted something official before recommending that the project move forward.

By 1989, the city was ready to award a bid to construct the facility, but the airport director had concerns about the future of the facility in Great Falls since Casper, Wyoming had built a similar facility in 1986 and still didn’t have the promised jobs and other cities were not closed as planned.

Over the next few years, the city constructed the facility but the full staff level never materialized and the matter escalated to the congressional level and in 1991, Congress would not allow consolidation without reassurance that service wouldn’t be affected. The city manager wrote to the FAA requesting to amend the lease agreement and months later the FAA responded that, “Although it might appear that the FAA may have taken advantage of a good thing, nonetheless, the lease ties our hands in renegotiating a lease once it has been consummated.”

In late 1991, President George H.W. Bush signed a law prohibiting the FAA from closing any FSS facilities for nine months.

A 1995 annexation agreement transferred most property on Gore Hill to the airport except the water tank, easements, public roadways and the FSS facility. In 1997, a Quit Claim deed transferred the FSS property to the city’s name, but no request was made to the FAA to release the city from the grant requirements and the airport map was never updated.

Letters continue back and forth between the FAA and the city until 2007, including letters in which the city says the facility will discontinue services and demanding cancellation of the lease.

Communication ceases in 2007 and Doyon is appointed as city manager in 2008. The city was under the impression it owned the property free and clear and felt it had made a good use of the property in moving the 911 dispatch and emergency operations center to the hill a few years ago. Since the 1980s, the city has spent more than $1 million on the facility, with federal assistance in the 1980s for the FSS and again in recent years for the EOC, with grant funding from the Department of Homeland Security.

Once Faulkner discovered the issue, he alerted the city and discussions began again.

In May 2016, the FAA office in Helena told the city that the office had no record of the land being released from federal obligations for city use but did have documentation that showed the property was airport owned.

The city spent most of 2016 trying to get out of the FAA grant requirements to no avail and the airport could not in good faith say the property would never be needed for airport uses. Even if the FAA was willing to release the property, they would require the city to pay fair market value to purchase the property.

Doyon asked Faulkner to keep the city and the security needs for the 911 center in mind as the airport updates their master plan.

“I believe the 911 center is an asset to the airport,” Doyon said during the Aug. 1 work session.

City Attorney Sara Sexe said she’s hoping to have the lease agreement on the Aug. 15 agenda for the City Commission but that it might take more time to prepare.

City Commissioner Fred Burow said it was frustrating to have spent more than a million dollars on the property only to be in this position. Sexe agreed that in hindsight, it would have been best to have dealt with the issue in the 1990s.