Stratosphere Development seeks state OK before launching $142 million Republic Airport project

An aviation company planning to develop five parcels at Republic Airport is suing the state Comptroller's Office for denying the company's request to extend a separate lease to operate a critical airport hangar. 

The litigation adds a new wrinkle in the development, which has stalled for eight years since the state first awarded Stratosphere Development Co. a lease to develop five parcels at the East Farmingdale airport.

Stratosphere, which operates as Republic Jet Center, is a fixed-base operator at Republic Airport. In that capacity it provides jet fuel and subleases office, hangar and parking space for planes. The company plans to develop the five parcels for similar uses. The airport is owned by the state Department of Transportation.

The lease for the parcels will last 49 years, starting when the parcels are built, according to Greg Zucker, an attorney for Stratosphere. But the company's existing lease with the state for a hangar adjacent to one of the properties, known as Parcel A, expires in 2038. 

The ramp for that hangar — known as Hangar 7 — is needed for planes to get from Parcel A to the runway, according to the lawsuit. The development would encompass about 54 acres of the airport property, Zucker said.

Stratosphere had asked the state to align the leases and extend the Hangar 7 lease for decades into the future. The comptroller's office denied that request in June, saying the state should follow competitive bidding procedures.

In a "notice of non-approval," the office said Stratosphere provided "insufficient support for how a noncompetitive lease results in the greatest return to the State." 

The comptroller’s office declined to comment on the lawsuit or its lease policies.

"It makes perfect sense" to extend the lease, Zucker said. "You want the same [fixed-base operator] here because it’s operating here and there’s not multiple companies. It’s safe, it’s efficient and it saves the state a lot of money."

If that hangar is leased to another company after 2038 and Stratosphere does not have access to its ramp, a taxiway would have to be extended in order for planes in Parcel A to get to the runway, according to the lawsuit.

Stratosphere expects to spend $142 million on the total project and pay the state $1 million in annual rent, its lawyers wrote in a court filing. The projected cost to build on Parcel A is $14.6 million, according to the lawsuit.

If the state does not extend the hangar lease, the company will not be able to secure financing for Parcel A, lawyers for Stratosphere said in court filings. Financing for the other parcels is not in jeopardy, Zucker said.

None of the parcels have been developed, and Zucker said the company could not provide a timeline for finishing the work.

"We started in 2016, it’s eight years later and we haven’t built," said Zucker. "We have gone through an exhaustive process. We had to get approvals from every single agency and it’s been carefully vetted and analyzed."

But Stephen Canzoneri, a spokesman for the state Department of Transportation, said in an email that "construction is expected to begin this winter with full completion expected in five years."

The five-parcel development will result in 197 temporary construction jobs and 240 permanent jobs, company officials have said. All of the airport parcels are exempt from town property taxes, officials said.

Babylon Town Supervisor Rich Schaffer submitted an affidavit in support of Stratosphere’s lawsuit.

"It’s more bureaucratic nonsense," he said of the comptroller's denial. "If people wanted to really see Republic Airport make a difference in the town they would sit down around a table and get this moving."

The project has drawn criticism from some community members who are worried about the impact of increased air traffic.

Nancy Schliwka, a local civic leader, said she fears the expansion will "increase pollution and activity" in neighborhoods that surround the airport. She also called for a more extensive environmental analysis of Stratosphere's proposal.

Nancy Cypser, president of the Long Island Civic Alliance Inc., which consists of multiple area civic groups, echoed the need for a deeper look at how the development could impact the environment. 

“There is a big pollution issue with this whole thing,” she said. Expansion at the airport will "generate even more pollution in a place where the aquifers are already vulnerable."

By Denise M. Bonilla

denise.bonilla@newsday.comdenisebonilla

Denise Bonilla has worked at Newsday since 2003 and covers the Town of Babylon, including the villages of Lindenhurst and Amityville.