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Rule change would leave hangar owners out in the cold

Give the airport the hangar you built and rent it for a higher rate, or move it at your own expense: That’s the choice leaseholders at the North Little Rock Municipal Airport could be faced with as their leases expire if an airport commission proposal goes forward.

The airport commission has proposed changing the rules for long-term leaseholders by reverting ownership of hangars to the airport at the end of their lease term. Under new lease terms, tenants who built (and currently own) hangars on leased land could either turn ownership of the structures over to the airport and renew the lease—at a much higher rental rate—or tear down the hangar at their own expense. AOPA wrote to the commission June 7 to oppose the proposal.

“While many general aviation airports across the United States do have reversionary provisions in their land leases, it is extraordinary for an airport to modify their lease terms to add a reversionary provision at renewal after the lessee has invested in developing the leasehold,” wrote AOPA Vice President of Airport Advocacy Bill Dunn. “The lessee who entered into the original lease with the airport entered into that agreement and made his investment under one set of rules, which justified the expenditure. Adding reversion provisions ‘after the fact’ that changes the rules to the detriment of the lessee simply isn’t reasonable and could not have been foreseen as the investment was being made.”

When tenants signed their initial leases, they had no indication that they could be sent away empty-handed at the end of the lease. AOPA told the commission it should consider alternatives to springing this sudden change on leaseholders who have made significant investments in the property. If the commission pushes forward in adding reversionary provisions to leases, it should only consider them for new leases, not renewal of existing leases, Dunn said.

Topics: Advocacy

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