Saturday, August 25, 2012

Triumph disputes developer's description of lease offer - Fort Worth Star Telegram

Triumph Aerostructures and a Dallas real-estate developer continued Friday to negotiate new lease terms that both parties hope will keep 2,400 workers at a west Dallas aviation plant working on military and commercial contracts for the next few years.

Stuart Jones, president of American Brownfields Corp., is scheduled to close on the purchase of 425 acres at the Jefferson Street plant Thursday, ending almost 70 years of Navy ownership of the historic defense plant. The lease between the Navy and Triumph, which bought Vought Aircraft Industries in 2010, expires at that time.Jones, who has completed dozens of economic development projects nationwide since the mid-1990s, said his latest offer to Triumph -- made this week -- is virtually identical to its existing lease. It calls for $8 million a year in rent for three years and "the same long-term capital maintenance terms that Triumph currently has with the Navy." He said the lease contains no cost increases for Triumph over what it currently pays.Triumph, which produces key components for other defense contractors at the facility, said in a statement that it "has never been our intention to conduct lease negotiations in the press, nor do we think it is appropriate to do so."But the company statement said that Jones' descriptions of the offer "are simply inaccurate. That said, we remain committed to reaching agreement on a lease that works for all of the parties involved."The plant, long known as Chance Vought and later the LTV plant, was declared surplus property by the Navy and put up for sale about two years ago. Reportedly only two bids were received last year. One was from Triumph but was ruled noncompliant because the company would not assume cleanup costs.Jones' winning bid for the property was $357,550 in cash, plus all responsibility for capital maintenance and environmental cleanup. Jones will have to spend a minimum of $16.7 million to clean up soil and groundwater contamination from decades of manufacturing and testing, and perhaps a great deal more.Negotiations between Jones and Triumph escalated into a bruising public relations fight this week after the United Auto Workers union alerted the news media to the situation, and Triumph's top local executive, Jeff McRae, said that the company cannot stay at the facility under the proposed lease terms, which he said would double operating costs.Jones said he was blindsided by the company's decision to take negotiations public and said the company is "spreading fear" among political leaders and union workers to scapegoat him for what he contends are the company's long-held plans to move out.He said his first lease offer to Triumph in February "reflected an 8 percent increase over the existing rent." He said the Navy hasn't raised rent on Triumph since 2007 and allowed Triumph to spend up to 75 percent of its $8 million rent on capital maintenance. Subsequent offers were as high as $11 million a year in rent, he said, because of other changes to the lease.Nevertheless, Jones contends, Triumph has been getting a below-market deal for years from the Navy at taxpayer expense."We were negotiating in good faith for a new long-term lease," he said. "There was no indication, no evidence, that there would be such a blowup." Chris Vaughn, 817-390-7547Twitter: @CVaughnFW

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