Rents reductions coming at Bend Municipal Airport (KBDN) after tenant outcry

Ryan Neil, co-owner of Specialized Aero Works, moves an airplane from a hangar his company rents at the Bend Airport on July 29th, 2020.

Some tenants at Bend Municipal Airport will likely pay lower rents after pilots protested rent hikes that were implemented this summer.

The Bend City Council will decide whether to adopt new, lower rates for T-Hangar tenants at its next meeting December 16th, though the council showed support for the new rates at its meeting last December 2nd.

If the council approves, rents will be $10 to $30 less per month for most T-Hangar tenants, depending on the type of hangar, according to city documents. The reduction means the city can expect to receive $220,000 less over five years in rental revenue, said Carolyn Eagan, the city’s economic development director.

In August, the city increased rents at the airport by 21% to 41% for most businesses and private pilots who rent hangars at the airport. But several tenants soon afterward said they were left out of the discussion and that rates were artificially high because they were based on an appraisal  they believe was done incorrectly this spring.

After the outcry, the appraiser, David Chudzik, revised the appraisal, which looks at rents at other airports around the state to help create an estimate for Bend. He adjusted the rates down.

“After much input from users, we requested that the appraiser review the comparables and methodology used and report back to us, as some of the increases were fairly significant,” Tracy Williams, the city’s airport manager, said in an email sent to airport tenants.

Some of the changes in the new appraisal include correcting an error in the reported T-Hangar rent for Corvallis Municipal Airport,  according to a letter to the city from Chudzik dated September 30th. The original report listed high rental rates per square foot. More rental data of publicly-owned hangars at the Bend airport were also added in the revised appraisal.

The revisions ultimately led Chudzik to lower market-rate rents in the appraisal, but pointed out that rates at Bend Municipal Airport are higher than other airports in Eastern Oregon because median net income of the surrounding area is considered when setting rents.

“In the original appraisal, in setting market rent rates, emphasis was placed on relatively high rent rates typically charged by profit-oriented private developers like SGS Development, an owner and developer of hangars at Bend Municipal Airport,” Chudzik wrote in the letter. “In the revised report, more consideration is given to existing rent rates at City-owned hangars and well as at other airports including Redmond Municipal Airport, where airport administrators have not conducted a formal process to re-set rents to a market level for many years.”

While the reduction in rent is a good place to start, Kim Muinch, the director of the Oregon Pilots Association Central and Eastern district, said just approving the new rates is not enough.

Muinch said he and other tenants feel as though they are getting charged “top sirloin prices for hamburger-level services.” Basically, he believe tenants are getting charged more than they should for an airport that doesn’t have all the amenities others may have, like taxiway lighting or a control tower.

“We're all for improving, but there's nothing on the table saying ‘We are making it better,’” he said.

Williams, the city's airport manager, said the increase in rates do go toward funding five year's worth of improvements at the airport, including an air traffic control tower. 

"It's not being used to fund the general fund," Williams said, referring to a city fund made up of mostly general property tax revenue. "In fact, the general fund subsidizes the airport."

Muinch also wants the city to refund tenants who have been paying the higher rents since August. Currently, the new rates, if adopted, are set to start February 1st, according to city documents.

"OK you guys have owned up that this was a faulty appraisal...now go ahead and make good on it," he said.

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