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 reasonable rates.

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 reverted facilities.

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.

FMI: http://nlrairport.blogspot.com/