Nantucket Memorial Airport Manager Noah Karberg has been fined $4,000 for violating the state conflict-of-interest law after state officials investigated the leasing of airport land to Nantucket Marine, a business where he was a private customer.
“This was an important and expensive lesson in transparency, and I plan to move forward and learn from my mistake,” Karberg said in a brief statement to the Current.
The fine stems from Karberg's time as assistant airport manager when he came up with the idea to lease out a parcel of undeveloped airport land bordering Nantucket Marine, which is a boat sales, service, and storage business that he had in mind as the lessee.
The violation, according to the state Ethics Commission, stems from Karberg’s prior consumer relationship with Nantucket Marine and an undisclosed friendship he has with one of the owners.
“As a public employee required to know his obligations under the conflict-of-interest law, Karberg should have known to disclose the facts of his private relationship with Nantucket Marine and its owners prior to engaging in official Airport business with respect to the lease of the Parcel in which they had a foreseeable interest,” the commission stated in the disposition agreement.
Karberg purchased a used boat from the company in July 2019 and paid over $40,000 to the company over the next three years to do work on it. He received almost $8,000 from a local boater discount, which other year-round residents have also been provided. However, this was not disclosed to the airport. He is also “friends” with one of the two owners, the commission stated in the disposition agreement.
Karberg later took the lead in drafting the technical language for the parcel lease request for proposals (RFP) at the request of former airport manager Tom Rafter and was designated as the sole bid reviewer for the parcel RFP by Nantucket’s chief procurement officer.
From August 2019 through December 2022, Karberg emailed and/or texted the Nantucket Marine owner periodically about repairs and other services they were performing on his boat, according to the commission. He also would text updates and advice as the potential lease progressed through regulatory and permitting processes, and later the RFP process, while occasionally serving as Nantucket Marine’s liaison to airport staff.
In November of 2021, Karberg recommended to Rafter that they use an income-based methodology to set the RFP's minimum price and was later directed to do so by Rafter. While applying that methodology, Karberg rejected two professional appraisals received by the airport as too high – but later used them as a starting point to set the range for, and then specify the minimum qualifying bid.
An error was made by Karberg in the calculation of the minimum qualifying bid of $0.84 per square foot, which the state ethics commission said came to light during a preliminary inquiry conducted by them. This number was significantly lower than the value the methodology would have produced without the error. They said the number should have been closer to $1.77 per square foot for the parcel after correcting the error found by the commission.
When correcting for all errors, Karberg said in the disposition agreement he believes the methodology would have resulted in a range of $0.72 to $1.40 per square foot – leading him to suggest he would have recommended $1.03 per square foot for the parcel, which would have netted the airport an additional $39,200 in the first five years of the lease.
Karberg showed his steps in performing the calculation, including the step that led to the error, to Rafter, the airport’s office manager, and a compliance and land use specialist at the FAA charged with approving the parcel for non-aeronautical use. No one identified the mistake and Rafter accepted Karberg’s recommended minimum qualifying bid.
Nantucket Marine was the sole bidder in the response to the RFP and Karberg awarded the parcel RFP to them at a rate of $0.85 per square foot on August 17, 2022. A 30-year lease was signed on September 7, 2022, and it began on October 1, 2022.
“Karberg did not make a disclosure of the relevant facts to his airport appointing authority prior to acting on the Parcel RFP,” the state Ethics Commission stated. “Had Karberg disclosed the relevant details of his private relationship with Nantucket Marine and the company's owners, to his appointing authority, the Airport manager, the Airport manager could have assigned the Parcel RFP to an employee who did not have a conflict of interest, potentially avoiding the costly error Karberg made in calculating the price for the Parcel.”
Karberg was named Nantucket Memorial Airport manager in November 2022.