NLR airport set to forgive $130K in back lease pay

Commission can’t find waiver

The North Little Rock Airport Commission voted 5-1 Thursday to forgive at least $130,000 that airport officials said a general aviation company didn’t pay under an expiring lease.

The commission also voted 5-1 to grant Air Charter Express a new lease that could keep the company managing an airport-owned hangar for another 25 years.

Air Charter Express has paid about $27,000 annually under its existing lease, which expires in March. But starting back in 2006, airport officials never incorporated the rate increases mandated under the lease terms and tied to the Consumer Price Index.

Clay Rogers, the airport director since 2011, said he was unable to find any documentation that the commission ever approved waiving the lease nor talked to anyone who remembered the commission waiving the price index increases.

Three members of the commission now — Chairman Mark Halter, Jim Julian and Don Blakey — also were on the commission during at least part of the time in question. They said they remembered conversations about the state of the hangar both before and after a tornado heavily damaged the hangar in 2008 and ways to help Air Charter Express but nothing specific about the CPI waiver.

The repairs took most of a year before aircraft could be stored at the hangar, a time period in which Air Charter Express had no income from managing the hangar and other services it offers, including fueling, Blakey said.

Even before the tornado, the hangar suffered from a leaky roof and an office that, according to Air Charter Express owner Tommy Murchinson, was almost uninhabitable.

Julian, a lawyer, and Marie-Bernarde Miller, a deputy city attorney, said demanding that the money be repaid would be difficult from a legal standpoint.

Among other legal hurdles was the statute of limitations, which Miller said would allow the airport to only go back five years.

Julian said the commission never found the lease in default and instead accepted the monthly rental payments by which the airport essentially waived its “legal rights by [its] conduct,” a long-held legal standard.

But Blakey and some airport users insisted that Air Charter Express should pay some of the money it would have paid had the lease terms been honored.

“I’m just going by the doright rule,” he said. “If we go back five years, we can get some money. I just can’t in good conscience leave money on the table.”

Blakey was the only commission member to vote against the resolution that formally forgave any money Air Charter Express owed. Halter and Julian were joined by Brad Hughes, Mark Bentley and Adrienne Smith in supporting the resolution.

The new lease agreement calls for Air Charter Express to pay about $33,000 annually for the life of the lease. A Consumer Price Index escalator is included in the new lease.

The commission rejected a motion by Blakey to increase the annual lease to nearly $35,600. He noted that had the index increases been granted, Air Charter Express would be paying about $40,000 annually.

“We’re talking about a lease that hasn’t had an increase in 20 years,” Blakey said.

But other commissioners thought that was a back-door way to get the unpaid money back.

Bentley said the increase in the lease rate from $27,000 to $33,000 “was a fairly significant increase.”