A superior court judge has ruled in favor of the Martha’s Vineyard Airport Commission in a dispute over the commission’s decision last month not to renew the lease for the Airport Mobil station.
On Wednesday, the Hon. Mitchell H. Kaplan denied a preliminary injunction to block the award of a lease for lot 33 at the airport business park to Depot Corner Inc. Airport Mobil owner Michael Rotondo, who held a 20-year lease on the property that expired March 9, had contested the commission’s decision to award the lease to the other business, claiming that the bidding process was misleading and unfair.
Arguments were heard in Dukes County superior court last week. The preliminary injunction request was filed against the airport commission and the winning bidder, Louis Paciello, the owner of two gas stations in downtown Edgartown.
In a 14-page decision, Judge Kaplan noted that while some aspects of the commission’s request for proposals for the property were confusing, in general the commission acted properly in awarding the lease to a new tenant. The judge found Mr. Rotondo is not likely to succeed in proving that the airport commission acted “arbitrarily, capriciously or illegally” in awarding the bid to Depot Corner.
Mr. Rotondo’s lawyer, Michael L. Mahoney, said this week that he and his client have yet to make any decisions about whether to go forward with the lawsuit.
“My client’s very disappointed and we’re considering our options,” Mr. Mahoney said.
Airport commission attorney David S. Mackey praised the decision. “The airport commission was gratified by the judge’s preliminary ruling and looks forward to defending the case on the merits,” he said.
A request for proposals issued by the airport commission in December called for a minimum rental price of $1.55 per square foot for an initial rent of more than $56,000. Airport Mobil bid $3.01 per square foot for the property. “Its narrative description of its business and future plans relied heavily on its assertion that it had successfully run the gas station, car wash, and convenience store on the property for the previous 20 years, its operation was well known to the commission, and service disruption would be eliminated if it was awarded the new lease,” Judge Kaplan said in his ruling. The judge noted that the commission evaluation included concern that Airport Mobil relied too heavily on already holding the lease and lacked a business plan for the future.
Mr. Paciello’s company, Depot Corner Inc., bid $3.49 per square foot and received high marks for business experience and submission completeness.
“The commission did not exhibit either irrationality or bias in selecting Depot’s bid over that submitted by AFS,” Judge Kaplan wrote, adding that the court has a limited role in reviewing an agency’s decision to award a lease. “The court . . . may not substitute its judgment for that of the agency officials to whom this decision has been delegated,” he said.
Two other bidders were also in the mix: G.J. Smith, Inc., which bid $2.21 a square foot, the lowest amount, and MVYABPT Lot 34, which bid $5 per foot. The judge noted that due to various aspects of the proposals, both those bidders were poorly rated.
The case also included arguments about the fate of Mr. Rotondo’s station. According to court documents, Mr. Rotondo could be required to return the property without buildings or improvements at the end of his lease. After the lease was awarded to Mr. Paciello, the commission left the start date of the new lease open and required Mr. Paciello to notify the commission if he would be negotiating with Mr. Rotondo to acquire the buildings on the property.
Mr. Paciello offered $250,000 for improvements on the property, which Mr. Rotondo rejected as too low, noting that the buildings had been appraised at $1 million.
The judge noted that the lease explicitly states that in the end the commission could require Airport Fuel Services to surrender property without improvements like buildings on it, and the lease did not include a provision requiring the new lease holder to pay a fair market value for the buildings and improvements. “This court . . . has no authority to relieve a party from contract obligations that, in retrospect, now appear to it to have been a bad deal,” the judge wrote.
Judged Kaplan also noted, as he stated during arguments last week, that if the bid process was flawed, the appropriate step would be order a new request for proposals. A new lease will bring revenue to the commission and serve the public interest, the judge found, and leaving the existing leaseholder in place while the process is rebid would not be in the public interest.