Pendleton City Council to clarify contentious lease language

Published 6:17 pm Wednesday, March 25, 2020

PENDLETON — Business owners at the Pendleton airport wanted the city to clarify its new land lease policy, and the Pendleton City Council intends to give them clarity within the next week.

The council met for a workshop Tuesday to discuss the reversionary clause, a contentious part of the policy that allows the city to take control of airport properties after leases end.

The clause was debated for months: Airport entrepreneurs said it would stifle business at the airport, while the city maintained that officials were just trying to follow Federal Aviation Administration guidelines.

Tensions seemed to wane once the city approved the policy in June 2019. Under the new rules, tenants could either sign up to a 50-year contract with a reversionary clause that could be deferred with a fee, or avoid a reversion altogether by paying twice the market rate. The two options are known as Option A and Option B, respectively.

But the issue resurfaced in February when the airport business community attended a city council meeting to ask for clarification on the policy, adding that existing tenants weren’t being offered all the options when the city sat down for negotiations.

The issue was sent to the city’s airport commission for more consideration, but it doesn’t seem like longtime airport business owners will be able to avoid the reversion.

At the workshop, City Manager Robb Corbett said Option B was never meant to be offered to existing tenants, a move that would effectively allow existing tenants to hold leases in perpetuity.

“It was never intended to be something that would allow someone to postpone reversion for 130 years, and I think what’s happened, is that there’s been a tremendous amount of pressure that’s been brought to bear on the airport commissioners by people who have a lot to gain by the decision you’re about to make tonight,” he said.

In an interview after the meeting, Corbett said tenants could still defer reversions and negotiate new leases as long as they paid the fee described in Option A.

Mayor John Turner recommended the council clarify the lease language to make clear that Option B was only open to new tenants, which the rest of the council seemed to agree with.

However, this would run counter to what the airport commission recommended. Airport Manager Steve Chrisman said the commission voted to make Option B available to all tenants.

Chrisman said his task is to make the airport self-sustaining and pay off its debt, which is difficult to do with the current ground leases on the book.

“All I’m trying to do is a figure out a way that allows our business people to continue to thrive, yet gives us a fair amount of revenue back to help run the airport,” he said. “Even the tenants will tell you that they think those numbers are fairly low that they’ve been enjoying for a long time. The question is, what’s fair. That’s subject to interpretation.”

Turner said the council would vote on changing the policy language at its next meeting, which is scheduled for April 7.

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