Spencer Being Shown Door At San Bernardino International Airport

(October19)  Scot Spencer, who once ruled the roost at San Bernardino International Airport, is on the brink of being evicted from that facility. This morning, October 19, it is anticipated that Federal Bankruptcy Judge Deborah Saltzman will confirm her tentative ruling handed down on October 15 to force Spencer and his companies that remain at the airport to depart in the face of revelations that two Spencer-owned and managed companies are no longer insuring their operations and indemnifying the joint powers authority that has jurisdiction over the airport.
Spencer, who at one time had control of nearly every aspect at the airport, including developing and managing it, was forced into having his companies operating out of the airport  file for bankruptcy in December 2011 and March 2012. He is contesting the vacation order.
The San Bernardino International Airport Authority, known by its acronym SBIAA, is a joint powers authority consisting of the county of San Bernardino and the cities of San Bernardino, Highland, Loma Linda and Colton dedicated to transforming the grounds of Norton Air Force Base, which was shuttered by the Department of Defense in 1994, into a viable civilian aerodrome.
Spencer, who has extensive contacts throughout the aircraft industry, was brought in by the San Bernardino International Airport Authority in 2007 under a no-bid arrangement and entrusted with converting the facility into a true international airport. Spencer was given that assignment despite his 1994 conviction for fraud that ensued after he and financier Jeffrey Chodorow sought to utilize the remaining assets from Braniff International Airways, which went bankrupt in 1982, to create Dallas-based Braniff International Airlines, Inc. Spencer and Chodorow were both convicted of fraud for absconding with $14 million of the company’s funds and Spencer served a four-year prison term from 1995 until 1999 as a result of that conviction.
Spencer leased from the San Bernardino International Airport Authority the lion’s share of property at the airport, where several companies he was an owner or investor in set up shop. Upon his 2007 hiring  to direct what was supposed to be a $38 million renovation of the airport’s passenger terminal and a $7 million development of its concourse, Spencer confidently predicted that upon completion of those projects the airport would attract at least one passenger carrier and as many as a half dozen airlines. The cost of the passenger terminal and the concourse escalated to $142 million and the airport has yet to host any commercial airlines. Spencer was granted the franchise for the corporate jet-hosting Million Air aviation facility at the airport.
The cost overruns for the terminal project, the failure of San Bernardino Airport to attract commercial airlines and Spencer’s relationship with former San Bernardino International Airport Authority and Inland Valley Development Authority executive directors Don Rogers and T. Milford Harrison as well as with Timothy Sabo, the legal counsel for the authority, invited the critical scrutiny of the San Bernardino County 2010-11 Grand Jury. The grand jury  questioned several elements of Spencer’s performance and that of Rogers, calling into question what was characterized as lax oversight of the airport’s operations and favorable treatment accorded Spencer.
From his position of control, Spencer pursued his own corporate aims to the detriment of blimp builder Aeros Aeronautical Systems Corp. and aircraft maintenance specialist BaySys West, both of which were operating at San Bernardino International Airport but elected to leave because of Spencer’s interference.
Spencer utilized Rogers and Sabo to evict Aeros in 2008, despite the consideration that business was booming for Aeros and that company was making its lease payments for Hangar 695 to the airport authority on time and in full. In July 2008, before Aeros vacated the hangar, Spencer and SBIAA signed a lease for Hangar 695 at a rate less than half of what Aeros was paying for the space, even though  Aeros had yet to vacate it. When Aeros did not leave quickly enough to satisfy Spencer, who wanted the space to have one of his companies complete $750,000 worth of repairs on a 727 his company was refurbishing, he threatened SBIAA with legal action.
Aeros, which had offered the promise of remaining as a longtime paying tenant, left in a huff, never to return.
The authority kowtowed to Spencer even further by providing him over $1 million worth of concessions, including the forgiving of a $155,000 balance on a previous loan, the extension of another $550,000 loan at 5 percent interest, and an ongoing $315,000 hangar rental subsidy.
Also in 2008, Spencer forced the exodus of Virginia-based BaySys West, which was employing 300, from San Bernardino International Airport because Spencer apparently felt that company  was in competition with Norton Aircraft Maintenance Systems, a company he owned. BaySys left in December 2008 under pressure from Spencer.
Spencer involved himself in a questionable relationship with T. Milford Harrison, a one-time Loma Linda city councilman who served for a time as the executive director of the Inland Valley Development Authority (IVDA), which is devoted to developing and improving property surrounding the airport property. Harrison was given several lucrative positions with companies involved at the airport which Spencer owns or controls. With Spencer, Harrison is a manager of KCP Leasing and Services. Harrison and Spencer were also listed as officers with Million Air Development Company, LLC, as well as Million Air San Bernardino LLC. Harrison further has an unknown relationship with SBD Aircraft Services. That company had issued to Harrison an American Express Business Platinum card, against which Harrison charged $63,043.45 in expenses and a second Starwood Preferred Guest Business credit card, which Harrison used for $4,642.86 in purchases. None of those charges were related to airport business, resulting in  American Express suing Harrison for payment.
On September 21, 2011 federal and state authorities descended upon San Bernardino International Airport, serving search warrants at five offices, businesses or facilities there as part of a comprehensive investigation into allegations that millions of taxpayer dollars were illegally diverted, mismanaged, laundered, misappropriated or siphoned off by officials or individuals affiliated with the airport’s development.  Targeted in the raid led by the FBI were SBIAA and IVDA headquarters, the San Bernardino Million Air Franchise; three hangars, including Hangar 763, where two Spencer-affiliated companies, Norton Aircraft Maintenance Services and SBAM Technics, are located; a storage facility at the airport, and Spencer’s Riverside residence. According to the search warrants, the authorities were seeking information regarding suspected misuse of federal funds, bribery, mail fraud, wire fraud and conspiracy.
On September 28, Rogers resigned as SBIAA and IVDA executive director. On November 9, the SBIAA board hired A.J. Wilson, a municipal manager with an extensive list of top administrative assignments inside and outside of California, to the position of executive director of San Bernardino International Airport. In November 2011, the SBIAA and IVDA boards removed Spencer as the contract developer of San Bernardino International Airport. Spencer legally challenged that move, but on February 17, Superior Court Judge Brian McCarville ruled that the airport authority was legally entitled to assume from Spencer and his company, SBD Properties, control of the airport’s fuel farm, consisting of tanks from which the private jets that fly out of San Bernardino International Airport are fueled.  Spencer had allowed fuel in the tanks, which have a capacity of 150,000 gallons, to dwindle to 1,100 gallons as of February 1. Under the authority’s contract with SBD, a minimum of 20,000 gallons of aviation fuel must be maintained in the fueling system at all times.  On February 21, Million Air Interlink, the Texas-based provider of landing and take-off services for operators of private and corporate jets that had already sued Spencer for $837,290 in long-past-due franchise fees, revoked Spencer’s franchise.
Spencer sought to use bankruptcy filings to block the actions being taken by SBIAA against him and his corporate entities, San Bernardino Airport Management, SBD Properties LLC, KCP Leasing and Services, SBD Aircraft Services, Norton Aviation Maintenance Services and Unique Aviation. In filings before the bankruptcy court, the various creditors of Spencer’s companies or those in contractual relationships with them asked to be able to liquidate Spencer’s assets. Saltzman in her tentative ruling said the airport authority should be able to reassume control over the hangars Spencer’s companies occupy as well as the Million Air facility.
Spencer did not return phone calls seeking comment.

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