CRESWELL – A year-long legal battle over hangar leases at Hobby Field Airport is nearing its conclusion after the City of Creswell and two commercial tenants reached a settlement resolving a $600,000 lawsuit.
In the lawsuit filed on Dec. 27, 2024 – Meadowbrook Investments, LLC, and F-03, LLC v. City of Creswell – the plaintiffs, who are commercial tenants managed by Jeffrey Hendrickson, alleged breach of contract stemming from disputes over two commercial hangar leases at the municipal airport.
F-03 lease dispute
Court documents reveal that F-03, LLC signed a 20-year ground lease in October 2022 for the construction of an aircraft hangar. Hendrickson mentioned that before signing, the City’s finance director verbally assured them that the construction deadlines would be adaptable due to market conditions.
F-03 alleges that neighboring airport construction subsequently flooded the lot, rendering building impossible, and that the City ignored the issue.
Additionally, safety hazards on airport taxiways led F-03 to file complaints with the Federal Aviation Administration (FAA), which issued a notice of noncompliance to the City in March 2023.
In November 2023, the City issued a Notice of Default citing unpaid rent, non-construction, lack of insurance, and abandonment.
F-03 claims it cured the defaults by paying overdue and advance rent and taking steps toward permitting.
The City of Creswell terminated the lease in early 2024.
Meadowbrook lease dispute
Originally executed in 2003 with a previous tenant, the Meadowbrook lease granted an initial 20-year term through Feb. 1, 2025, with two 10-year extension options, according to court documents.
In September 2021, Meadowbrook acquired the lease via an Assignment of Lease with the City’s written consent, which explicitly stated that the 2003 lease remained unchanged.
When Meadowbrook provided notice to exercise its 10-year renewal option, the City refused, claiming a 2004 addendum signed with the original lessee eliminated the renewal right, according to the court documents.
Meadowbrook contends the unreferenced 2004 addendum is legally invalid against them.
Relief requested; settlement status
The plaintiffs requested that the court order the City to reinstate the F-03 Lease and enforce the 10-year renewal of the Meadowbrook Lease through Feb. 1, 2035.
Alternatively, they sought monetary damages of $300,000 for each lease breach (totaling $600,000), plus 9% interest, attorney fees, and court costs.
The City retained outside counsel, Montoya Law, to defend against the lawsuit, and on June 26, 2026, attorneys for both sides filed a Stipulated Notice Regarding Settlement, thereby canceling the planned July 1 trial.
In a July 13 memo to the city council, City Manager Vincent Martorello confirmed the progress, stating: “The City of Creswell and Meadowbrook, LLC are negotiating a settlement for litigation in which the City was the defendant. The City and Meadowbrook, LLC discussed the terms during a mediation on May 20, 2026, and with a follow-up phone call between the parties’ attorneys. The settlement meets the objective set forth by the Council, and staff recommends the Council authorize the mayor to sign the settlement agreement to bring conclusion to the negotiation between the parties.”
Specific financial terms or lease compromises have not yet been disclosed in court filings.
The court has scheduled a “Judgment Status Check” hearing for this Friday, July 31, at 9:30 a.m. to confirm that the final dismissal paperwork has been executed.
