The Daniel DePonti Airport runway is paved, but some members of the Forest Lake Airport Commission, as well other lessees of hangar space, are at odds over a new lease that’s been under discussion for months – including a provision for paying for the commission’s share of the runway cost.
The previous version of the airport hangar lease was approved in 2008, and a new version was written this year. According to City Administrator Aaron Parrish, the city felt that the 2008 lease needed to have some language modified to keep it current and to address a few flaws in its makeup, like a provision that made it difficult to raise rents in accordance with market factors. One sticking point that some commission members had with the new lease was a section that dictated that the hangars “may only” be used for “Aeronautical Activity,” with all other “incidental” uses requiring approval from the Airport Commission. Many commissioners and hangar occupants did not like this requirement, which was worded more strictly than the previous lease’s requirement that hangars be used “primarily” for aeronautic activity – a distaste partially due to the fact that while all of the hangar users utilize their hangars for aeronautic activity at present, a number of them also store equipment in their hangars that is not plane-related.
“Most of us would be in violation of this right now,” Commissioner Donald Shipp said at a Nov. 21 joint work session with the Forest Lake City Council.
He was joined by fellow Commission Member (and Councilman-elect) Sam Husnik is stating that the old rent’s language was sufficient and did not need to be changed.
The other, larger issue is a matter of rent. When the Forest Lake City Council approved the runway paving project in 2015, it did so on the condition that the Airport Commission find a way for airport funds to raise half of the local share of the project – at the time, thought to be a maximum of $150,000 of a $300,000 share. While an engineering estimate snafu led to additional project costs, the total cost of which has not yet been determined (see the Nov. 3 story, “Airport paving overrun highlights council meeting” or visit tinyurl.com/jbrmlle), the Airport Commission approved this spring a plan to charge a $280 fee over no longer than 10 years for each of the 30 hangar properties, with the fee on a given property starting when one of the spots is leased. With about $84,000 left of its share of the project cost to pay for, the commission believed this solution would make up the difference, perhaps even ending the fees sooner if the commission realizes additional revenue or finds other fundraising sources.
The council voted to approve the $280 per year cost, but, since the lease did not provide for the establishment of a fee, the charge was added to the rents of the properties instead. This raised the ire of some hangar lessees, who argued that the move was improper and who were unsure if the city would really sunset the increase after 10 years.
Hangar property leases are currently charged on a per square foot basis, with prices ranging from about $800 to $1,000. Before 2016, rent prices hadn’t been raised in eight years. Some hangar lessees are upset because unlike the rest of their rent, the $280 is a static number not based on square footage. They’re also upset because the $280 represents as much as a 35 percent increase from their current rents, which they believe is out of line with the lease’s requirement that rent increases be “reasonable.”
Perhaps the most vociferous of those opposed to the rent increases has been Donald E. Shipp, son of Commission Member Donald L. Shipp. In an email to Councilman Richard Weber that he shared with The Forest Lake Times, the younger Shipp, who is not a commission member, said that the city has no legal basis to demand $280 a year more from him.
“There is nowhere in my contract that allows the city of Forest Lake to charge me to pave a runway,” he wrote in part.
His letter also accused Parrish and multiple airport commissioners of either using or approving of questionable legal methods to add the rent increase to the hangar leases, alleging that they knew there was no legal justification for their actions and yet did those actions anyway.
Discussions about the new lease have been going on for months, and City Council members expressed weariness over the repetitiveness of some of the talking points during a joint work session with the Airport Commission on Nov. 21.
“This is one of those things that we continue to (discuss), over and over,” Councilman Michael Freer said of the rent increase.
Though both Shipps argued during the work session that the rent increase was improper, council members pointed out that it was originally a vote by the commission, not the council, that established an annual cost of $280 to pay for the runway paving.
“I voted on the basis of that (plan) at the time,” said Councilman Ed Eigner, who is also on the Airport Commission. He and other council members pointed out that for lessees who are still unhappy, the lease allows them an attempt to seek a lower rent increase via the legal system. The council showed little appetite for modifying the rent provisions.
“Your lease has a clause in it that says you can go to arbitration, so go to arbitration,” Eigner added.
At the Dec. 7 Airport Commission meeting, Parrish presented a new draft of the lease that restores some of the old lease’s flexibility regarding incidental use (while still requiring some oversight on said uses from the commission). The $280 additional rent remains in the lease. The commission voted to table the edited lease for further research and discussion at its January meeting.