The surprising secret to negotiating a good hangar lease

With the possible exception of that ego-enhanced titan of real estate and self-promotion, Donald Trump, most of us don’t particularly relish the idea of sitting down to hammer out a new contract. We don’t care for the process at the car dealership, we’re skittish in the lawyer’s office where we close on our homes, and we wouldn’t mind skipping the periodic visit to the airport manager’s office where we delve into the myriad unpleasant possibilities that may arise with each new hangar lease.

In short, almost nobody puts contract renegotiation at the top of their list of favorite things to do on a sunny afternoon.

Still, both sides need the protection of a contract. The days of long-term business arrangements that were based on a handshake and a smile are long gone – if they ever existed at all. Both parties need the assurance that they know exactly what they are agreeing to when it comes to negotiations.

The lessor (the airport authority) wants to be sure the lessee (the tenant) isn’t going to be stashing half a dozen pallets of pickled herring in their leased hangar, should they sell their airplane and perceive the hangar as a convenient self-storage unit for the remainder of the lease. The tenant, on the other hand, would like to be assured that the rent won’t rise if the municipality that owns the airport overspends on capital projects that cause red ink to rise to an uncomfortable level at city hall.

Yes, lease negotiations can be complicated and uncomfortable. Sometimes, more is going on under the surface than you may realize, however.

What can complicate the issue, sometimes unnecessarily, but with the potential for tremendous frustration, is the fact that there are the interests of more than just the lessor and the lessee being discussed when contract time comes. Knowing that, and acknowledging that fact, can lessen the stress involved, even if the same hurdles remain. While it is possible that the only two people in the room are the airport manager and the prospective tenant, your state’s Department of Transportation and the FAA may very well have a hand in the negotiations as well. If the airport has accepted federal or state money to enhance the airport or its amenities in some way, you can pretty much count on an invisible party or two at the table.

This is not to say that negotiations will not be fair, or equitable, or that a reasonably acceptable deal cannot be reached. The outcome of negotiations depends in large part on the flexibility and creativity of the two parties in the room. Success in this instance has a very real connection to the capacity and experience of the airport manager.

It may seem counter-intuitive, but perhaps the best protection the state, the feds, and the tenants have against being bamboozled in negotiations all rest with the same person – the lowly, unloved airport manager. Strong, well-informed management can negotiate with confidence, balancing the needs of the municipality with the wishes of the tenants, while protecting the investment of the state and federal government.

So while any one of us may have years left on our lease when it comes time to bring in a new airport manager, it is worth being an active participant in the process when that time comes. The future viability of the airport, and your next contract, just might rest on the outcome of that decision.

Jamie Beckett is a CFI and A&P mechanic who stepped into the political arena in an effort to promote and protect GA at his local airport. You can reach him at Jamie@GeneralAviationNews.com.

Comments

  1. I’ll see your jest and raise you a robust laugh.

    Thanks for making it clear that airport managers are people too – if only in the anthropological sense.

  2. We airport managers don’t mind be lowly and unloved, as long as we can be evil landords ! (submitted in jest)

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