PORT ANGELES — Port of Port Angeles commissioners will review their lease policy for tenants who build their own structures when they meet Monday.
The High Flyer Hangar Condominium Owners Association, which leases at William R. Fairchild International Airport, has persistently asked for changes in the lease for the past several months.
The request hinges on a section called a “reversion clause,” which requires that at the end of a lease — in this case 50 years for the lease that began six years ago — the structures must either be removed or revert to port ownership.
The meeting will begin at 9:30 a.m. at Port of Port Angeles commissioners’ chambers, 338 W. First St.
FAA rules
Port staff and the port’s legal adviser said state laws and Federal Aviation Administration grant rules require that the clause be in leases.
Representatives of the High Flyer Association said the rules describe only a possibility and are asking the commissioners to reconsider.
Jerry Nichols, who is representing the association, said he believes the clause should be changed for all leases to encourage more business.
“It was something we knew about when we were negotiating our lease and it concerned us, but at that point, we believed it was an FAA requirement,” he said.
“But now we believe that it is not the way that it has to be.”
Grant funding
Port Executive Director Jeff Robb said that while the FAA doesn’t have a specific rule requiring the reversion clauses, omitting it could endanger grant funding.
The port is eligible for up to $1 million in FAA grant funding annually.
“Not only that, but the FAA could— now this would be an unusual move, but they could — come back and require that we pay back that money,” Robb said.
“So, say the port has received something like $13 million over the last 20 years; they could tell us that we would have to pay that back,” he said.
FAA requires that airport land remain “unencumbered,” Robb said.
FAA response
An email from Peter Doyle of Northwest Mountain Region of the FAA to the Port of Port Angeles said, “The FAA does not have a position on reversion clauses.”
But later in the emailed letter, Doyle said that, depending on how a lease was handled, removing the clause could endanger FAA grants.
“I guess you can read different things into the letter,” Nichols said, adding that he and Robb disagree on what Doyle was saying in the email.
Nichols also suggested that the port add a clause committing to purchase the structures at the term of the lease, but Robb said that promising such a purchase, when the future value of structure is unknown, could be considered a gift of public funds.
Doyle also addressed that issue in his email.
“From an airport perspective, it does not sound appropriate to guarantee that the airport purchase the hangars at the end of the lease,” he wrote.
“We have seen several leases that have reversion clauses or provide that the airport may purchase the hangar at the end of the lease or that the lessee needs to dispose of it or find an appropriate purchaser.
“We have not seen any that guarantee the purchase of the hangar at the end of the lease period.”
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Reporter Paige Dickerson can be reached at 360-417-3535 or at paige.dickerson@peninsuladailynews.com.
