NEWPORT NEWS — A judge has rejected a petition by a Hampton businessman to order the Newport News/Williamsburg International Airport to sharply cut the estimated cost of fulfilling an open-records request — but not before that request led to the disclosure of a multi-million dollar payout by the airport commission nearly two years ago.
Newport News Circuit Court Judge Bryant L. Sugg told attorneys on the case by way of an email early Friday that he had denied Thomas G. McDermott’s request that the judge cut the airport’s $3,370 cost estimate for fulfilling a Virginia Freedom of Information Act to a tenth of that, or $300.
But McDermott’s open-records request — particularly the part asking for numerous documents about a $5 million airport-backed loan to a start-up airline — is what first began to tear at the veil of secrecy that had previously surrounded the June 2014 loan guarantee to People Express Airlines.
It’s what led the Daily Press to first begin asking questions about the loan on Tuesday.
After learning of the loan guarantee, the Daily Press reported on Wednesday that the Peninsula Airport Commission had used $4.5 million in taxpayer money in April 2015 to pay off the airline’s loan from TowneBank, following the airline’s collapse.
On Friday, Virginia Secretary of Transportation Aubrey Lane said the Newport News airport improperly used state airport construction grants to pay the bill, adding that he had no choice but to cut off future state funding to the airport.
The yanking of state funds is sure to lead to increased scrutiny into how the airport is being managed, and questions about the level of oversight provided by commission members.
McDermott has been in the restaurant business for more than 20 years. In 2003, his Hampton-based company, New Dominion Clubs, was granted the exclusive right to provide the food and drink at the airport terminal. He took over the space previously leased to a Burger King and called his new restaurant the “Blue Sky Cafe.”
But that all changed in October.
That’s when the Peninsula Airport Commission suddenly voted to rescind the restaurant owner’s 25-year lease, saying it needed to take over his space “for airport use.”
That led to an ensuing court battle over the lease, which is now under way in Newport News Circuit Court. It’s also what prompted McDermott to file two open-records requests on Airport Executive Director Ken Spirito.
During his time running the Blue Sky Cafe, McDermott had apparently picked up enough information about the existence of a loan to People Express to be able to ask about it.
On Dec. 6, McDermott filed a FOIA request for a host of documents pertaining to the 2014 loan agreement, to include collateral, payments and amount owed when the airline ceased operations, among other documents.
He also asked for the minutes for commission meetings at which the loan was discussed, and “all written communications” between Spirito and Michael Morisi, the former president of People Express.
Also on Dec. 6, McDermott filed a second FOIA request for the commission’s plan to “demolish New Dominion’s location in Concourse B,” and “those portions of the security checkpoint consolidation plans that show New Dominion’s location in Concourse B is intended for demolition.”
The Peninsula Airport Commission’s lawyer, Herbert V. Kelly Jr., wrote back on Dec. 13, saying that the estimated cost for fulfilling the first records request was $2,287, and $1,083 for the second. “The requested documents will not be identified or produced until the advanced deposit has been paid,” Kelly added.
But McDermott, represented by attorney Kevin J. Cosgrove from the Norfolk firm of Hunton & Williams, pressed for details of how Kelly came up with those cost estimates.
Eventually, Kelly estimated that Spirito would spend 11.5 hours gathering the records. At an hourly rate of $151 — based on Spirito’s annual compensation package — that amounts to $1,737.
Kelly estimated that he would spend two hours reviewing the documents, at $400 an hour, in part to review confidentiality clauses in the loan documents. And the finance director and assistant executive director would also spend another nine hours on the requests, Kelly estimated.
It was revealed through witness testimony at a court hearing on the FOIA issue on Tuesday that airport officials calculated Spirito’s $151 hourly rate not merely on his salary alone, but on his broader compensation package — to include his base salary, retirement pay, Social Security payments, vacation time, car allowance, and medical, dental and vision care.
Cosgrove called those costs exorbitant. “If this is how they operate, the overwhelming majority of people in the commonwealth aren’t going to be able to take advantage of the Freedom of Information Act and the access it provides,” he told the judge at the hearing.
In response, Kelly, of the Jones Blechman law firm, disputed that there was anything unreasonable about the $3,370 estimate. He said all the costs — to include charges for searching for documents and reviewing them for possible redaction — are authorized to be passed to the requestor under state open-records law.
The lawyers got word Friday morning, in an email from Sugg’s secretary, that the judge sided with the airport and denied the petition.
Kelly could not immediately be reached late Friday.
“We’re disappointed,” Cosgrove said. “I really haven’t had a chance to talk with my clients as of yet. We will evaluate it and see where it goes from here.”
Still, the issue of the People Express loan, and the Peninsula Airport Commission’s decision to spend $4.5 million in taxpayer money to satisfy it, might have only just begun.
Dujardin can be reached at 757-247-4749
