Outcry after a Whirlybirds Firm Gets Inside Edge for Heliport
Some of the choicest municipal-patronage plums used to be with the city's old Marine and Aviation agency. It controlled leases at the city's docks and terminals, and its jobs always went to clubhouse loyalists who were charged with divvying up the spoils. Unfortunately, this task often led them afoul of the law, the wiseguys, or both. In 1983, city leasing director Rick Mazzeo wound up dead in the trunk of a car in Greenpoint after the Bonanno crime family became disappointed with his attitude about an ongoing investigation.
That kind of nasty affair is thankfully ancient history. We long ago traded political hacks for business-school grads who bring to their jobs, if not exactly a sense of civic duty, at least an intense commitment to being able to brag that they drove the hardest bargain. Above all else, the Bloomberg administration has claimed to stand for business conducted by the book and the bottom line. OK, occasionally a choice perk like a luxury stadium suite gets tucked into the deal for the enjoyment of these hard-driving negotiators.
But the story being told by a frustrated vendor, who says he ran afoul of insider trading and favoritism in his pursuit of a contract to run a city heliport, is a throwback to those bad old days, one that goes strongly counter to the Bloomberg grain as presented by City Hall.
In November 2007, Paul Dudley, a veteran aviation operator who runs Linden Airport in New Jersey, submitted a bid to manage the heliport that sits on Pier 6 in the East River, just south of Wall Street. The heliport's users include financial titans hopping off to Westchester and the Hamptons, tourists seeking a bird's-eye view, and the president when he comes to town. It was long under the control of the Port Authority of New York and New Jersey, but the authority's interest waned at the same time that Bloomberg's team was rethinking the Lower Manhattan waterfront. A transfer was agreed to, and the city set about selecting a private firm to run the facility.
Dudley and other bidders learned a few months later that they didn't make the cut. The contract went to FirstFlight, Inc., an upstate firm that's new to the business, but which includes some powerful city names. William Wachtel, a politically active real estate lawyer who also owns NY Waterways, the city's major ferry service, is chairman of the board; Thomas Iovino, whose Judlau Construction is boring the giant new East Side access tunnel from Queens to midtown, is a director, as is Alvin Trenk, a generous political donor whose family company, Air Pegasus, has long run the West 30th Street heliport on the Hudson River.
Part of what jolted Dudley and other operators was the Trenks' involvement. The little world of city helicopter firms suffers more than its share of feuds, many of them involving the Trenks. Helicopter Flight Services, one of the largest local carriers, complained in early 2007 to state officials that the Trenks had "a documented history of discriminatory pricing" against rivals.
Another operator, Michael Roth, of New York Helicopter, has sued Air Pegasus, complaining that he was wrongly evicted from 30th Street and pointing to Alvin Trenk's large ownership stake in Liberty Helicopters, the area's biggest operator. "What they're after is a monopoly," says Roth. An Air Pegasus spokesman calls Roth "a serial litigator" and says he was booted from the 30th Street heliport for safety violations. The monopoly accusation, says Stefan Friedman, is "the latest in a line of absurd complaints aimed at satisfying personal vendettas on the part of Mr. Roth and Mr. Dudley."
But what might have been chalked up as just an aerial version of the Hatfields and McCoys took on a whole different shade when Dudley heard that a top consultant for FirstFlight had been given a special briefing and tour of the facility in October 2007—one not offered to other bidders.
The consultant in question was Robert Grotell, an ex-city aide who worked as director of the Mayor's Office of Transportation and as the top aviation official at the city's Economic Development Corporation—the agency that oversaw bidding on the heliport. According to an affidavit filed by Dudley's lawyers, Port Authority supervisors said that the city's current official in charge of aviation matters, a woman named Patricia Ornst, had called to ask that Grotell be given a complete review of heliport operations and procedures.
At the time, Port Authority heliport supervisor Paul DelPriore said that he and his boss, Rick Wegel, were under the impression that Grotell worked for the city. But he didn't. Grotell had been hired months earlier by FirstFlight. His job, as company vice president Ron Ricciardi told the Voice, was to "put its proposal together."
According to the affidavit, since Wegel was going to be out of town on the day Grotell visited, he asked DelPriore to handle it, and "provide Mr. Grotell with any information he requested."
DelPriore said that he gave Grotell several years' worth of heliport financial records and filled him in on staffing and overtime needs. He also provided a "detailed security procedure overview" and a fact sheet listing the number of flights to and from the heliport over the past several years. DelPriore added that he "would normally never reveal any of this information to anyone not associated with the Port Authority." He did so for Grotell, he said, only because he thought he was working for the city.
The advantage given to FirstFlight was "huge," says Dudley. "They knew all the financials, and the true number of operations being conducted at the heliport. You make your money from the takeoffs, so you know right there you are going to be able to bid higher."
Insider info or not, the notion that one bidder got an in-depth look-see denied to others would seem to break all the rules. But no one would discuss it. Economic Development Corporation spokesman David Lombino issued a statement that "the selection of FirstFlight to operate the Downtown Heliport obtained the highest value to the city and was based on a thorough and fair process."
The city's law department issued its own boilerplate, saying that pending litigation couldn't be discussed, but that Dudley's allegations "have no merit."
Ricciardi, of FirstFlight, ducked as well. "That would fall under the category of 'I'm not going to comment on ongoing litigation,' " he said. Grotell did say he'd discuss his role—but only off the record. Told that wouldn't really suffice, he begged off altogether. "Given your position, I have no comment," he said.
As for the Port Authority, officials there wouldn't even answer calls on the matter. Other agency employees said that DelPriore and Wegel were both ordered to clam up after the affidavit was filed. The only effort to explain how a top city official might have arranged for a private consultant to get an exclusive review of a lucrative franchise was this: "We think it's a case of mistaken identity," said one city aide. "It wasn't Grotell, it was an environmental consultant."
Was it possible? "The guy left his business card," says Mike Roth, who worked next door to Wegel and DelPriore at the heliport. "Wegel showed it to me." Dudley's lawyer, Robert Hantman, said that he's tried to get the Port Authority to provide the card, plus a memo that Wegel allegedly wrote, without success. Meanwhile, shortly after FirstFlight took over, it named Grotell as interim manager of the facility. "He showed his capability," said Ricciardi, the company vice president.
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