Crowd Rallies Against Short Leases And Facility Seizures
The North Little Rock Airport Commission may have been
surprised when their meeting last week was attended by about 40
owners, operators, and aviation supporters. The crowd was
gathered to speak out about planned changes to the lease structure
at KORK that inserted a reversion clause.
As ANN reported earlier, rumors had been spreading that the
Commission was planning to structure leases so that the airport
could seize private hangars and other facilities built on airport
property. Tenants were outraged that the terms of their
leases would be changed so drastically after many years (and much
money spent) at the airport.
The Commission's lease committee presented a draft least for 5
years plus a renewal of 5 years at a cost of $0.40/sqft for the
first half of the lease and $1/sqft for remainder. After the
maximum of 10 years, the facilities must be removed or they will
revert to airport ownership.
A rival offer was placed by Virgil Young, a North Little Rock
attorney and hangar owner at KORK. His offer left the
reversion clause in place, but extended the lease time to 15 years
at $1/sqft (inflated annually). "It gets you what you need,
which is some more revenue, and lets everybody know what the rules
are going forward," Young stated during the meeting.
Previous leases at KORK had been signed for up to 30 years and
for as little as $0.10/sqft. Tenants expected similar renewal
terms. 28-year tenant Jerry Homsley was applauded when he suggested
the proposed changes defied FAA regulations requiring fair and
Mark Halter, the lease committee chairman, tried to appease the
crowd by saying "We're not kicking you out."
Homsley retorted "You're making it awful expensive for us to
stay." He said $15,000 in investments made to his hangar recently
could not be recovered in only 5-10 years. "If you're going to take
the hangar, give us a term. Ten years is not long enough. We're
giving you a large concession with reversion. You're offering us
something that's going to drive us away."
The Commission's claims that their lease revisions were only
intended to decrease the burden on the local government budget drew
heavy skepticism from the crowd. The 41 existing leases at
KORK bring in about $97,000 each year. Commission members
suggested more revenue could come from renting to tenants in
Some attendees asked why the airport wasn't looking at state
grants or other ways to acquire hangar space to rent on their 700
acres. Even their draft lease means waiting up to 10 years
for the possibility of getting an old facility handed over before
renters might be able to move in.
Commission chairman Rick Ashley's response was to remind
everyone "...there's only a limited amount of ramp space."
Both proposals will be discussed at the next Commission meeting
this Thursday, January 21.