CRESWELL — Area pilots and aviation enthusiasts in recent weeks have been airing out concerns with the Creswell City Council about the City’s operation of the airport. The main concerns? Updating lease agreements and ensuring they are equitable.
Bjorn Dahlen, pilot and owner of Pacific Aviation, initiated complaints at the Nov. 14 council meeting in an effort to have leases corrected. The City conducted an investigation with Jim Piper, finance manager and Shelley Humble, airport manager who prepared a memo addressing Dahlen’s concerns. They presented their findings at the Nov. 28 work session.
Hobby Field has 11 aviation businesses running out of the airport including aircraft maintenance shops, one flight school, one aerobatic company and a skydiving company, among others.
In the last fiscal year, Hobby Field generated over $207,194 in revenue from gas sales. Since its inception in 1962, all revenue has been allocated into an enterprise fund, meaning funds must be recycled back into the airport.
In order for a business to operate out of Hobby Field, they must have a lease. Hobby Field leases function in two ways:
One in which the person who built the hangar privately leases the city-owned land it is built on from the city in order to operate the hangar.
The other in which an aviation business owner rents a hangar that the city now owns.
In the last four years, the city has purchased five hangers due to tenants wishing to no longer run theri aviation business, which is what the latter lease agreement outlined pertains to.
Hobby Field was purchased by the the City of Creswell in 2000 from Creswell Airport Inc.
Prior to the ownership transfer, the Creswell Airport sought a full-service Fixed Base Operator (FBO), which generally provides aeronautical services such as fueling, airport maintenance, landscape maintenance etc.
In 1997, Viper Aviation, owned by Darren Humble, was brought on under a temporary lease agreement stating that Viper Aviation is allowed to operate until a full-time FBO is established.
This agreement had become void when the City of Creswell purchased the airport in 2000 and took over a full-time FBO role.
Still, the Viper Aviation lease is listed as “temporary,” which is something the City is now in the process of changing.
In the memo curated by Piper, it is stated that “the city has no intent of bringing in another fixed base operator.”
During the Nov. 28 work session, city attorney Ross Williamson made his recommendations to have language corrected.
“It would be my recommendation to correct these problems … I would prefer we just do away with the word temporary altogether,” he said.
In an email written to concerned Dahlen, Piper states “A new lease for Viper Aviation is being drafted by the City Attorney to supersede the lease that was inherited from the Airport’s previous owner, Creswell Airport Inc. The terms of a new lease will be negotiated at arm’s length, which will likely be between the City Attorney and legal representation for Viper Aviation.”
Dahlen also raised concerns relating to equitable lease costs at Hobby Field.
Moving forward, the City plans to increase rental prices based on customer price index (CPI), which last year was 7.1% for the land leases that are under a 40-year-contract.
In the same email from Piper to Dahlen, Piper states that, “new leases are being drafted for these five city owned hangars to include a year-over-year rent increase that is based on the CPI. This is how other leases at the Creswell Airport are increased.”
Since 2000, the five hangers purchased by the city have been leased to businesses. However, these leases were not updated to reflect the changes in ownership and value.
According to airport manager Shellley Humble, at the time the city “did not want to allocate any money to renewing the leases … they wanted to leave the leases as they were.”
The cost associated with renewing leases included assessing property value and administrative fees. The city would have had to pay $15,000 to have the leases changed, which is why the changes did not occur, according to Humble.
“I’m completely shocked that we would take over these leases from Creswell Inc. and not review them,” Councilor Tammy Sue Schuck said at the work session.
Following Dahlen’s complaints, the City launched an investigation and found cause to “follow up on renewing contracts,” including:
Making month-to-month leases longer term. Many leases originally were made for one year and then made month to month. “The FAA will not allow a full service flight school to operate on a field with only a month-to-month agreement. Not only that, but most businesses are not going to relocate and get their shops set up and start getting customers in if they’re only on a month to month,” said Humble
Implementing a system to make sure that all certificates of insurance are in the lease file.
Implementing a system of identifying leases that are near expiration and insurance that is near expiration on a monthly basis.
According to Piper, “…the City of Creswell is taking steps to review the current leases and will renew leases upon termination of those leases. This will be done on an annual basis to ensure that all leases are current and that the terms are equitable.”
