Hangar owners at North Little Rock Municipal Airport (ORK) in Arkansas are crying foul over what they see as an attempt by the airport commission to take ownership of their hangars.
“The way it worked in the past is that you leased the land from the airport but you were responsible for building your own hangar,” said Jerry Homsley, EAA Chapter 165 president and a hangar owner. “We all built our hangars in good faith, with long-term leases of 20 years. Now the commission is coming along and changing the rules in mid-stream. Instead of 20 years, we have the land for five. After that, the hangar becomes the property of the airport.
“Instead of that hangar you built for $50,000 being amortized over a long-term lease, you’re going to have a hangar costing you $10,000 for the next five years,” he continued.
Airport Manager Skipper Polk has a different view of the situation, noting that the leases involved are the ones that are expired.
“The idea that we are changing terms in mid-lease is wrong,” he said. “The current plan is to have the hangars revert immediately and give the owners a new lease for five years.”
Lease rates, which are now 26 cents a square foot, will be increased to 40 cents for the first 30 months of the new lease, then jump to $1 for the second 30 months. At the end of the five years, the leases could be renegotiated, Polk said.
“There is not — and never has been — a plan to get hangars torn down to attract better tenants,” Polk said, referring to speculation among pilots that this is the motivation behind the change. “With that said, there are some hangars coming due in such poor condition they are an eyesore and need to be refurbished or demolished.”
While the commission feels the rates and terms “are fair to all concerned,” according to Polk, Homsley, speaking on behalf of the hangar tenants, disagrees. The pilots attempted to negotiate with the airport lease committee at a Jan. 7 meeting, but their requests were ignored, he said.
“The lease committee is going to recommend to the airport commission that the new lease structure be adopted,” he said. “They refused to take reversion off the table and continued to talk about short-term leases. They are still talking about exorbitantly high prices for a square foot.”
It is Homsley’s understanding that a survey of surrounding airports determined market value was 30 cents a square foot.
“Yet they are planning to charge us 40 cents, and then it will go up,” he said.
According to Homsley, the lease changes seem to be out of line with FAA guidelines on fair lease rates, adding the hangar owners are exploring the idea of filing a grievance with the FAA.
Polk counters that the rent increases are necessary to comply with an FAA mandate that publicly-owned airports become self-sufficient.
“FAA grant assurances require GA airports to be self-sufficient, or attempting to become so, and at the current level of city support, we cannot reasonably claim that we are moving towards self-sufficiency,” he said, noting the airport receives $200,000 annually from the city’ general fund. “This could, at some point, hamper our ability to receive grants, which are currently the primary source of funds used to ensure the airport is safe and operational.”
A reliever airport for Little Rock National Airport (LIT), ORK has a 5,000 foot runway and a 3,000-foot crosswind runway. There are approximately 165 aircraft based at the airport. Operations range from corporate jet traffic to recreational aviation.
According to published reports in the local newspaper, the airport collects about $97,000 annually on 41 leases, or an average of $2,300 each a year from each hangar tenant.
If the airport commission does not change the terms of the lease negotiations, they are likely to lose several tenants, warned Homsley.
“The hangar owners — to the last man — say they will leave when the leases are up and tear down their hangars,” he said.
For more information: NLRAirport.blogspot.com.