Friday, April 01, 2016

Rent hike could close restaurant: Unalaska Airport (PADU), Alaska

An attempt to find money to fix up the municipal airport terminal in Unalaska threatens the existence of a local business, but now city officials expect to fund repairs and allow the Airport Restaurant to stay open.

The restaurant now pays $2.60 per square foot, plus 15 percent of sales, running between $8,000 and $11,000 per month. Then the city sent a letter saying the rent would rise to $25,000 per month.

"It's a drastic increase from what we were paying," said Assistant Manager Lisa Tran. "There's no doubt we'd go under if we had to pay that much rent in a month."

"It will put them out of business. I don't like it," said Mayor Shirley Marquardt. She suggested a head tax of $1 or $2 per airline flight as an alternative funding source.

At Monday's city council special meeting on budgets, Ports Director Peggy McGlaughlin said the city was looking for ways to finance repairs, but believes something will be worked out to save the restaurant.

The terminal operates at a loss, McGlaughlin said, losing about $500,000 per year. Only once did it come close to making money, breaking even in the 1990s when four airlines were in business, Peninsula Airways, Mark Air, Alaska Airlines, and Reeve Aleutian Airways, she said.

City Councilor Frank Kelty suggested privatizing the terminal, by selling it to an airline, but Marquardt said that could lead to a monopoly and reduce competition.

What Tran found especially galling was that they had pay higher rent than Peninsula Airways. While the airline occupies less space in the terminal, it makes way more money selling plane tickets, around $800 per transaction, while the restaurant averages about $15 per sale of food, she said.

"We don't feel it's fair for them to balance their budget on our backs," Tran said. The rent hike was slated to take effect this month, but has been put on hold while talks continue with the city, she said.

"We've had a rough year. Our family's house burned down, and now this. Now our livelihood is at stake," she said. Their home on Chernofsky Drive was destroyed in a propane fire in December.

Short of going out of business, the Tran family considered another alternative - reducing the area rented by about 1,000 square feet. That would eliminate the restaurant's seating area, which is often packed with customers, especially when flights are canceled because of stormy weather, a not infrequent occurrence.

The idea of a huge rent hike in a leaky building didn't sit well either, Tran said, especially with customers grossed out by the condition of a toilet stall in the men's bathroom in the airport terminal, which Marquardt said "looks like a murder scene with all the yellow tape around it." The mayor said she can't go to the airport without hearing about the foul bathroom, and was escorted into the men's room on several occasions to see the mess.

McGlaughin said the city finally removed the toilet, because it continued to be used by people who ignored the out-of-service sign.

The restaurant serves Vietnamese and American food, and is a popular and economical spot for birthday parties, because customers don't need to rent a conference room elsewhere, Tran said. And the restaurant hosts holiday parties with Asian food served to customers at no cost, in addition to donating food to the senior center, and gift certificates for fundraisers for local non-profit organizations, including the Ice Cream Social benefiting the preschool program, and the Soup-Off for Unalaskans Against Sexual Assault and Family Violence.

"We try to be generous and give back as much as we can," Tran said, of the business her family has operated for the past 15 years. "We see ourselves as part of the community." Before her family's ownership, the restaurant was operated by Sonny Nguyen, and earlier by Unisea.

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