By TOM MCLAUGHLIN / Daily News

Posted Mar 29, 2014 at 12:01 AM

Updated Mar 29, 2014 at 2:32 PM

Late last year, a company associated with Destin Jet owner Jay Odom bought out

the competition at Destin Airport.

The Dec. 31 move quickly caught the attention of the flying public, who noticed

no signs of competition between two companies known as fixed base operators,

Destin Jet and Regal Air Destin.

“It seemed to be collusion between two supposedly competing businesses,” said

Okaloosa County Airports Director Sunil Harman. “Commuters clearly felt there

were anti-trust issues.”

Called out by Harman in early February, Odom reportedly admitted in a Feb. 25

face to face meeting that Sterling Diversified LLC, a company managed by Odom

and two partners, had bought out Regal Air, county documents show.

He contended, according to documents obtained through a public records

request, that Regal Air wasn’t required to notify the county of the transaction.

	
	
			
	




	

	



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Odom’s rationale, according to a document Harman sent to county

commissioners, was that “his equity did not reach the 40 percent or more of the

operators stock as specified.”

Contacted by email Friday, Odom denied holding an ownership interest in Regal

Air.

“I am putting you on official notice that Destin Jet did not buy Regal Air Destin,

nor has any ownership interest in Regal Air Destin, and Jay Odom did not buy

Regal Air Destin, nor has any ownership interest in Regal Air Destin,” Odom

said. “If you run that in a story, your story will be false, and your facts are

wrong.”

But airport officials have thoroughly documented recent activities at Destin

Airport and concluded the “principal of Destin Jet and partners own 100 percent

of the competing FBO,” according to Harman.

Harman and other airport officials have determined Odom’s move resulted in “a

number of possible state and federal anti-trust violations,” documents show.

It also violated two Federal Aviation Administration grant assurances, which

could result in sanctions for the county, including losing as much as $2 million in

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federal airport funding, Harman said.

“Their money comes with strings attached,” he said.

A history of turbulence

Destin Jet opened in 2009 and began competing then with Miracle Strip

Aviation, which for years had been Destin Airport’s sole fixed base operator,

selling fuel and providing other services for incoming and outgoing commuter

aircraft.

Regal Capital bought out a struggling Miracle Strip Aviation in March of 2013

and opened Regal Jet. The purchase agreement included a promise to pay off

$485,000 Miracle Strip Aviation owed the county.

Sterling Diversified LLC was created in 2010. Jay Odom was listed as the limited

liability company’s registered agent and manager on “articles of organization”

filed with the Florida Division of Corporation.

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Chester Kroeger and Tim Edwards, two of the owners of Fudpucker’s

restaurants, are listed in the original documents as Odom’s co-managers.Odom’s

name appears on Sterling Diversified annual reports for every year since 2010

until this year’s report, which was filed in February.

Records show on Dec. 31, 2013, Sterling Diversified LLC, referred to in county

correspondence as Sterling Group, bought out Regal Air Destin LLC.

It was shortly thereafter that “people obtaining services” began complaining

about a lack of competition between Destin Jet and Regal Air, Harman said.

On Feb. 10, Harman sent out letters to Destin Jet and Regal Air pointing out that

the owners of the contracted FBOs could “not hold a direct or indirect interest in

another FBO.”

Odom made no mention of having ownership interest in Regal Air in his written

Feb. 25 response to the county. But county records state he did acknowledge

ownership in a face-to-face meeting he requested the same day.

“At the meeting Mr. Odom also informed the director and deputies, that as of

Dec. 31, 2013, the Sterling Group LLC., of which he was a one-third equity

partner, has acquired ownership of Regal Air Destin LLC., and that Mr. John

Simmons was no longer owner of that FBO,” stated a document Harman

prepared for county commissioners Feb. 26.

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Odom also informed the county at the meeting that he would be overseeing all

communication between Regal Air and the county from that point forward, the

Harman document states.

At the Feb. 25 meeting between Odom and the airport administrators, Odom

reportedly argued that two FBOs could not co-exist at Destin Airport in the

current environment of declining general aviation activity.

Harman does not disagree with him on that point.

“There has been a declining market since 2008,” he said.

The way forward

Despite all that has thus far transpired, Harman foresees a future in which issues

between the county and Odom -- as well as former Regal Air owner John

Simmons, who is considered in violation of his lease agreement -- can be

rectified.

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“The principal owner at Destin Jet has been given a path forward on how to

resolve things,” Harman said.

It might even be possible that Odom can get the go ahead to merge the two FBOs

at Destin Airport under the Destin Jet mantle.

Harman said he is “fairly confident if Destin Jet does the right things the case is

compelling enough to point to a single fixed base operator” at the airport.

To make his argument, Harman said, Odom will be required to show proof of

shrinking fuel revenue and present numbers showing why it makes sense to have

a single FBO.

If the county commission accepts the proposal, it would then take Odom’s case to

the FAA, Harman said.

Harman told county commissioners in his Feb. 26 correspondence regarding his

meeting with Odom that they also hold the option, upon receiving verification

in writing that Odom has ownership interest in Regal Air, to “vacate and nullify

the lease” he holds.

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The county could issue a request for proposals for a second FBO at Destin that

precludes Destin Jet from competing, the memo said “and pursue Regal Air for

outstanding debt.”

To begin making things right, Harman said, he needs the cooperation of both

Odom and Simmons.

The first thing Odom has to do, he said, is step up and clear the air.

“If he has acquired ownership of Regal Air, the first thing he needs to do is admit

that,” Harman said, acknowledging that Odom has yet to formally document a

takeover of Regal Air.

“The second is to obtain retroactive permission from the board of commissioners

and pay requisite assignment fees,” Harman said, adding that Odom has verbally

agreed to go before county leaders.

For his part, Simmons must “respond to the county’s request for information.”

His 30-day window to do so is fast approaching, said Harman.

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RELATED STORY

Helicopter company operating out of Destin Jet in county’s crosshairs

Contact Daily News Staff Writer Tom McLaughlin at 850-315-4435 or

tmclaughlin@nwfdailynews.com. Follow him on Twitter @TomMnwfdn.

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