Tag: AvCraft

Rice’s Failure to Deliver for his 7th Congressional District Constituents

It has been six months since the day Tom Rice’s political career changed.
The January 6th disturbance at the U. S. Capitol building led to Rice’s ‘vote of conscience’ one week later to impeach former President Donald Trump.
Rice’s vote to impeach changed the political landscape in his South Carolina 7th Congressional District as Rice was immediately attacked by a large majority of his former supporters for casting that vote.
At the time, Rice’s campaign consultant Walter Whetsell downplayed the outcry against his five-time candidate as something that would fade in a couple of weeks. However, rather than fading in the six-month interim, the opposition to Rice has only grown.
At least 10 Republican challengers to Rice’s nomination for a sixth term as the Congressman from the South Carolina Seventh have already registered with the Federal Election Commission. In the eyes of most Republicans, the 7th Congressional District is being treated as an open seat rather than one with a five term Congressman in place with all the advantages of incumbency.
But, it is not only Rice’s vote to impeach Trump that will cause him trouble in the June 2022 Republican Primary, should he choose to run. He has no record of producing results for the citizens of the 7th Congressional District despite being in his fifth term as their representative.
When Rice first campaigned for the new 7th Congressional District seat in 2012, his two main issues were “Jobs, Jobs, Jobs” and “Interstate 73”. He has failed on both issues.
Horry County, Rice’s home county and the location of a full 50% of the Republican voters throughout the district, has experienced no job growth attributable to Rice’s efforts in his four plus terms in Congress.
This comes as no real surprise. In his two years as chairman of Horry County Council before being elected to the 7th Congressional District seat, Rice promoted jobs as a major issue. Working with the Myrtle Beach Regional Economic Development Corporation, Rice’s two prime efforts for creating new jobs during those two years were “Avcraft” and “Project Blue”.
Avcraft was an aircraft completion and services company that had relocated to Horry County in 2004 with promises of 400-600 new jobs. After six years of failure to produce any new jobs in Horry County, Avcraft received one more stimulus package from the county with Rice leading and promoting the effort. Not only were no new jobs forthcoming, Avcraft finally bowed to the inevitable and filed for bankruptcy in 2014.
(Click on Headline above to read more)

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Council to Hear SkyDive Myrtle Beach Officials

SkyDive Myrtle Beach officials will address Horry County Council next week in an attempt to make members aware of the many inconsistencies in Horry County Department of Airports claims that were used as an excuse to close down that business at Grand Strand Airport.

The case for closure of SkyDive Myrtle Beach by Horry County is built around 112 alleged safety violations by the business, none of which are safety violations or violations of any other kind, according to FAA regulations.

Nevertheless, Horry County officials made what appear to be false claims to the FAA and the FAA, relying on the integrity of Horry County officials went along with the farce.

A preview of the address was sent to members of council and other Horry County officials by SkyDive Myrtle Beach last week.

Two statements at the beginning of the address tell the story:

“The County has attempted to style complaints in email only to the FAA, in order to have the FAA believe that something very dangerous is occurring at CRE.” (CRE is the FAA designation for Grand Strand Airport.)

And

“Not one FAA official has actually examined this process and the Director’s Decision was erroneously written, relying on the fact that the County was acting in good faith and being truthful, which they have never done in this case. You continually deny my due process with the Department of Airports, by denying my hearing before the Department, which is mandated in the County’s illegal Minimum Standards.”

In other words, the county is up to its old tricks of assuming ‘the law doesn’t apply in Horry County or, if it does, interpreting the law any way the county desires to justify its actions.’

The county depends on its deep pool of taxpayer dollars as a reserve to defend lawsuits brought by those same taxpayers attempting to seek justice.

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Final AvCraft Chapter?

The Horry County Transportation Committee voted earlier this week to write off $113,687 in unpaid rent from AvCraft Technical Services that the county will never collect anyway.

AvCraft filed for bankruptcy in March 2015 after an 11 year history of failing to make good on its promises to Horry County.

This should be the final chapter in the saga of local and state politicians, especially Horry County Council, looking at AvCraft through rose colored glasses in the name of economic development.

Since arriving to much hoopla in 2004, AvCraft was consistent in only two areas – it consistently failed to meet job goal promises and it consistently requested and received rent reductions on the three hangars at Myrtle Beach International it rented from the Horry County Department of Airports.

After eight years of failing to meet goals, Horry County Council tried one last time in January 2012 to help AvCraft save itself with the recommendation of the Myrtle Beach Regional Economic Development Corporation.

One of the main items in that agreement was a $1.25 million reduction in rent on the county hangars over a five year period. This came after three earlier rent reductions, agreed to by the county, failed to make AvCraft profitable.

The following four comments made after the 2012 incentive package was approved demonstrate how far from reality politicians and their economic development arms exist from reality:

“I am thankful for the company’s commitment to Horry County and proud of our economic development team for this terrific announcement.” – Rep. Tom Rice.

“It’s another great day in South Carolina, and we are going to celebrate AvCraft’s decision to expand and create 150 new jobs in Horry County.” – Gov. Nikki Haley.

“AvCraft is a tremendous asset to our community, and this project is just the beginning for aviation-related businesses locating and expanding in the Myrtle Beach region.” – Doug Wendel, MBREDC board chairman at the time.

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Horry County Department of Airports Inconsistencies

Looking at the Horry County Department of Airports through the years, a conclusion can be drawn that businesses operating at the various airports are treated differently.

It’s almost as if winners and losers are chosen by airport officials based on no apparent criteria.

Such an attitude is contradictory to instructions from the Federal Aviation Administration.

Accepting FAA grant money (of which Horry County receives millions every year) and free land conveyance of former Air Force property brings with it certain requirements of and assurances from the county. The most important of these is that the airports and their facilities must be available for public use in a non-discriminatory manner.

However, after discouraging Hooters Air from renting hangar space at Myrtle Beach International Airport by insisting on rental of $5 per sq. ft., the Horry County Department of Airports rented the same hangars to AvCraft for $2 per sq. ft.

That was only the beginning rent. Over a 10 year period the airport department kept reducing rent , in an attempt to keep AvCraft in business, until the company finally went belly up.

The Conway airport was home to the North American Institute of Aviation. The school did well until the late 1990’s when enrollment started to decline.

Local businessman Benjamin Creel bought the school at that point, but its losses continued to mount.

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Skydive Myrtle Beach v Horry County

Horry County’s ongoing litigation with Skydive Myrtle Beach isn’t as clear cut as county staffers would have you believe.

In fact, the matter is so conflicted that Aero News Network, an online aviation industry publication, did a rather extensive investigation of the ‘so-called’ facts of the case.

Their conclusion: “The matter is convoluted, contains a number of questionable statements (including charges of hazards and safety issues by county officials that appear to be highly suspect and based on less than expert knowledge of skydiving operations/hazards)…”

ANN editor in chief Jim Campbell, a veteran skydiver with USPA jumpmaster and instructor ratings, conducted a series of telephone interviews with Skydive Myrtle Beach staff and customers as well as Horry County officials.

Campbell’s conclusions from those interviews: “So far; no major safety issues have been corroborated and a number of respondents with significant skydiving credentials report few credible safety issues of any note — and nothing of significant import. However; the alleged safety issues noted by Horry County staffers, as well as some FAA bureaucrats (but not reported to SDMB staff or management until long after the alleged incidents occurred), seem questionable in both credibility as well as context…”

Campbell was so moved by his findings that he filed requests for investigation of the entire issue with the SC Attorney General, US Department of Transportation Inspector General and US Justice Department.

Horry County Department of Airports has a history of contradictory treatment of airport, especially general aviation, businesses. It put up with over 10 years of unfulfilled promises by AvCraft, reducing the rent on the hangars AvCraft leased at least three times, before deciding enough is enough.

In a letter dated February 19, 2014, Horry County attorney H. Randolph Haldi accused an attorney representing Skydive Myrtle Beach with either a “misunderstanding or misuse of criminal law.”

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Complaints Filed in AvCraft Bankruptcy

Bankruptcy trustee Michelle Vieira filed adversary proceeding complaints against directors of AvCraft Technical Services recently in bankruptcy court.

Vieira, the Plaintiff, is the court appointed bankruptcy trustee for KNH Aviation Services Inc. d/b/a AvCraft Technical Services in the matter of the Chapter 7 bankruptcy filing of the company, Case #15-01641-dd in U.S. Bankruptcy Court District of South Carolina.

The causes of action include breach of fiduciary duties by the defendants for capitalization of the debtor, sale and lease agreements with Sun Air, removal of equipment and self dealing.

The defendants are former owners and directors of KNH Aviation Services Inc. d/b/a AvCraft Technical Services, Mike Hill, Donald Kamenz, Derek Nice and Carol Drew along with the owner of Sun Air and former AvCraft director Jesper Lundberg and Sun Air of Scandinavia A/S.

KNH Aviation Services was put together by Mike Hill. He originated the company and got Kamenz, Nice and Drew to come in as investors to buy AvCraft Support Services in a foreclosure sale from AvCraft’s principal debtor, Maple Financial of Toronto.

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County Council Mistake on MBREDC

Horry County Council is about to make another mistake with regard to the MBREDC.

Council will vote Tuesday night on extending its funding contract to the Myrtle Beach Regional Economic Development Corporation for another year. This would commit the county to three more years of funding from the current two.

County council should not have agreed to a new two-year contract when considering its budget for the current fiscal year. It is making a terrible mistake extending the contract.

The excuse is a new executive director for the MBREDC, for which there is a search currently ongoing, will want a three-year contract to agree to a deal.

But, with the history of the MBREDC, not only in its current iteration, but also in all the ones that came before, county council would do better if it burned $1.1 million in the parking lot of the government center as give this agency another dime!

What it is doing here is giving away tax dollars to an agency whose only goal is to give away more tax dollars to bribe companies to relocate to Horry County.

And, it doesn’t do that well!

All we have to do is remember AvCraft, Project Blue, Ithaca Gun Company and PTR Industries to see how woeful has been the performance of MBREDC.

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Thanks for the Memories Marion Foxworth

It was with great sadness that I watched Councilman Marion Foxworth participate in his final Horry County Council meeting Tuesday night.

With all due respect to other present and former council members, no one brought to the council dais the level of knowledge about Horry County history and the way government works as Foxworth has.

Foxworth is a master politician. Staying true to his Democratic Party roots, during a time when Horry County was moving ever more to the Republican column, he was targeted for defeat in every election campaign he ran by a succession of Horry County Republican Party chairmen.

It made no difference. Foxworth was first elected to county council in a special election in 2002 and successively re-elected in 2004, 2008 and 2012.

During his over 13 years of service on council, he proved himself to be more fiscally conservative than his Republican colleagues. I believe the only tax increase he voted for during his entire council service was the six-tenths of one mil for funding Coast RTA, but only after it was approved by voters in an advisory referendum.

When it came to the massive 6 mil fire fund increase in FY 2015 and 7.2 mil general fund increase in FY 2016, Foxworth was firmly in the NO column.

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More Economic Development Exposure

Economic development incentives will be more transparent thanks to a new Governmental Accounting Standards Board disclosure requirement.

The GASB is a private nonprofit agency that provides standards and oversees governmental accounting throughout the nation.

Thanks to this new requirement, government agencies must now tell taxpayers how much tax breaks given under the guise of economic development incentives actually cost.

The new requirements take effect December 15, 2015.

Those incentives often take the form of state income tax credits, property tax reductions through fee-in-lieu agreements, free or reduced rental payments for government structures and cash incentives.

It is past time that taxpayers were told just how much governments are giving away to corporations who promise to create new jobs and sometimes actually do.

In a report that accompanied the new requirements, the GASB said giving up revenue (in the form of incentives) is sometimes a gamble.

I would say it is primarily a gamble.

Corporations play this game well. It’s not about economic development or creating new jobs to them. It is only about where they can get the most for the least cost to them.

Who cares if the taxpayers fill in the rest?

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MBREDC Smart Economic Planning or Insanity

On July 7, 2015, the Horry County Council approved another 2-year $2.6 million contract with the MBREDC (Myrtle Beach Regional Economic Development Corporation.)

This action is probably very confusing for anyone who has followed the progress of the MBREDC over the years.

Have Horry County taxpayers received a proper return on the $1.3 million given annually to the MBRDC during the past 5 years? Certainly any prudent investor would ask about an expected return on investment before committing funds to a corporation, whether a quasi-public/private or solely private one. There is only one measure of success when it comes to investing your (the taxpayers) money and that is the return on investment. In this case the return would be measured in number of residents who got jobs per tax dollars spent.

Unfortunately (for my peace of mind and confidence in our County Council) I did some basic math. The MBREDC receives $1.3 million annually from Horry County taxpayers. The former MBREDC President Brad Lofton had announced 1,500 jobs were created by the MBREDC in Horry County during his 3 years running the agency. Oops – but it appears that half of those jobs have not been filled. Let’s do some easy math; 750 jobs at $1.3M X 3 years of taxpayer money = $5,200 per job. Oops, forgot to subtract the money owed to the county by the current occupant of the Cool Springs Business Park (paid for by taxpayer $). PTR owes $73,000 in back rent as of June. Is it now logical to add $73,000 / 3 = $24,333 to the cost per job? Well probably not, but you get the drift.

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