Pendleton City Council delays decision on airport leases

Published 2:30 pm Thursday, April 9, 2020

PENDLETON — The city of Pendleton’s new airport lease policy is meant to prevent perpetual rent agreements, but ironically, the debate over the rules seems to be extending into perpetuity.

The Pendleton City Council voted on Tuesday to table the issue for a period not to exceed 60 days, giving the city extra time to assemble a working group to quell further conflict between airport staff and airport business owners.

By the time the council approved the policy last summer, the concerns of the business community were already well known. The plan to include a piece of contract language called a “reversionary clause” in all future contracts would allow the city to take back leased land at the end of the lease, and stifle business at the airport along with it, argued the business owners.

The policy the council passed was meant as a compromise, offering some business owners a chance at avoiding reversion as long as they paid a higher lease rate.

But a contingent of business owners returned to council chambers in February, saying that city staff wasn’t offering tenants the non-reversion clause in lease negotiation and asking for further clarification on the policy.

The airport commission reviewed the policy and recommended offering the non-reversionary option to all tenants, but the council took a different tack at a recent workshop, agreeing informally to offer non-reversion contracts only to new tenants.

With official council action on the agenda, Jeff Guenther and Brad Wahl, acting as spokesmen for airport businesses, made a last-minute argument against the policy amendment at the Tuesday meeting.

In an email to councilors, the pair calculated that offering all tenants non-reversion contracts would actually generate 17% more revenue than the standard lease with the clawback provision.

While the city has long maintained that the reversionary clause is needed to comply with Federal Aviation Administration rules that prohibit perpetual leases, Wahl said the FAA’s clock starts over each time a lease is renegotiated.

Councilor Chuck Wood took a conciliatory tone with the business owners, adding that he felt a compromise could still be reached.

“I think we can work this out,” he said. “I think we’re close to doing it.”

Wahl said he was amenable to Wood’s work group idea, and the rest of the council agreed to hold off on amending the policy for two months while the group met.

The council appointed councilors McKennon McDonald and Becky Marks to the group, although Marks voted against tabling the issue.

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