Thursday, May 19, 2016

Hangar leases a hang-up for Cottonwood Council

COTTONWOOD -- The Cottonwood Council Chamber was packed Tuesday night with pilots, hangar owners and others associated with the Cottonwood airport. 

The issue that gathered them centers on Cottonwood's long-term lease rates for the city land on which the hangars sit. This matter has been simmering since 2008. At the end of a two-hour discussion, the council called for a special committee of stakeholders and decision makers to settle the matter.

The agenda item has been repeatedly pushed by hangar owner Lawrence Minch, who felt that he among others were wronged because of two standards used by the city to lease hangar space.

Almost every hangar at the airport is privately-owned on land leased to owners by the city. Most have 25-year leases on their land, but expect to use their hangar for much longer.

The issue centers on a lot of money and that fact that the leases provide that the hangars become the property of the city at the end of the lease. But some owners negotiated a 25-year lease and the opportunity to negotiate based on a new valuation. Others got a 25-year lease with the option for a 15-year extension. The difference apparently is the way the leases are worded and whether owners can expect a 25-year lease, or essentially, a 40-year lease.

A couple of owners who signed only the original lease without the extension option, said if the terms were not the same as the Larry Green lease, they would move their hangar off the ground after 25 years and leave only the bare ground. 

Councilman Tim Elinski, said "25 years is too short a term. It is important to have a written policy. It's our job to provide certainty. We want a level rate across the board with a trend over a five- to 10-year period."

A big stumbling block is the fact that the airport has no written policy, and in fact, Airport Manager Morgan Scott could find no written policy when surveying 11 Arizona airports he researched.

Mayor Diane Joens insisted that, "We are always supportive of pilots and what they bring to the community in terms of economic development. But the airport belongs to its citizens." 

"We need to have transparency and equity. I am an advocate for changing the leases," said Councilman Randy Garrison.

"This is a critical issue," said Councilman Terence Pratt, "We are not utilizing the airport as an economic center."

Alan Paxhia, president of the Cottonwood Hangar Association, told the council his hanger is worth $270,000 and that "40 years allows for amortization of the building, but the city wants to rent the hangar back to us after 25 years."

"You have no right to our building until after 40 years," Paxhia insisted. "The owners are being stonewalled and you are not going to negotiate until the lease expires."

Janet Thompson is another hangar owner. Since her husband died, she wants to sell her hangar. She says that it is now "worth $220,000, but if had a 15-year extension, it would be worth $305,000."

Much of the debate revolves around specifics of the law including "gifting public property", "constrained by the Arizona constitution," "fee-title must remain in hands of city, because of millions in grant funding to maintain the airport," "adequate consideration," "duty on part of city to negotiate."

Hangar owners simply want a fair deal and many on the Cottonwood council agreed with them.

Lawrence Minch, hangar owner who has pushed the issue, said he believes the FAA will have the upper hand, "I would be more worried about losing your airport than changing a line in my lease."

Former Cottonwood Airport Chairman John Altizer asked the council, "How much is it going to cost you. You are not going to get a millions of dollars' worth of hangars without a fight."

Attorney Steve Horton admitted, "I have become a bit of an issue." He suggested the city find an alternative attorney to assist with the negotiation. 

In the end, the council approved forming a committee to work on a land and hangar lease policy (for the Cottonwood Airport) composed of an airport consultant, an attorney, an airport commissioner, council member, citizen, an airport manager, representative from the FAA, and a hangar owner.

Original article can be found here:

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