Manager Larry Dalrymple said deals the Eastern Oregon Regional Airport recently struck with two tenants were necessary to keep money at the airport. But Airport Commission member Mike Thorne said more can be done to make sure the city is getting its moneys worth on airport property.
Dalrymple and former Pendleton City Manager Larry Lehman at the end of 2011 negotiated a deal with Ron Lemar, who had owed the airport $25,000 in rent payments hed accumulated over about two years. Lemar, husband of Elviss Bar and Grill owner Elvis Lemar, said family health issues prevented him from making payments. Dalrymple said he and Lehman tried to negotiate with Lemar off-and-on, and they couldnt get him to make regular payments until he agreed to paint the exterior airport terminal for $25 an hour.
We did not have the money to pay to have the terminal painted, Dalrymple said. So our option would have been to kick him out and get nothing, take him to court and get nothing, or strike an agreement.
Thorne, who also used to direct the Port of Portland and Washington ferry system, questioned why something wasnt done right away when Lemar wasnt making rent payments. He said its not acceptable for the airport to tolerate missed payments, especially with its fiscal issues.
Dalrymple told the East Oregonian Monday the airport needs about $175,000 to balance its budget, and renting all its properties could generate $172,000. But even if it broke even, the airport would still owe money an excess of $2 million to other city funds. The airport this year has a $3.4 million budget, and in 2013 will have a $3.6 million budget.
Dalrymple said he and Lehman didnt evict Lemar because Elvis Lemars restaurant has been the first in a few tenants which has run a successful business at the location, which is connected to the airport terminal. Elvis has operating for 11 or 12 years, and before that the space was occupied by a series of three restaurants that were in business about a year each.
Dalrymple said Lemar started painting in the spring, and has since worked his debt down to $7,717.
Patti Johlke, Dalrymples assistant, said Lemar plans to paint other buildings around the airport when hes finished with the terminal, which hasnt been painted for about 18 years; Lemar is also fixing other aesthetic issues such as loose brick. The building was last painted by state community service workers. Randy Sharp, owner of A Sharp Painter, LLC, said hiring Lemar burdens the airport with significant liability.
If youre going to employe somebody, whos going to pay for their workers compensation, and injuries, whos going to pay that?, Thomas said. Theres reasons why you have people that are licensed, bonded and insured.
City Council at its August 7 meeting approved a negotiation with Round-Up Radio to lower its airport property lease by $9,000 a year. Dalrymple and Thorne agreed that the airport had no other choice but to negotiate the radio stations lease because it would be difficult to find another business to rent 3,200 square-foot building because its designed specifically for a radio station. Remodeling the building to make it more attractive to other businesses is too costly.
If there were other options out there that made any sense, we would have gone that way, Dalrymple said.
But Thorne questioned the lease Lehman and Dalrymple had initially negotiated with the radio station; the airport in 1999 constructed the building for the radio station, and they elected a five-year renewal in 2009. Thorne said in the future the airport should propose at least 20-to-30 year lease agreements to tenants who want to build narrowly purposed buildings. This would provide the airport with time to accumulate enough money from rent payments to remodel the building to be useful to other businesses. The lease agreement will be final after Randy Capps, owner of Capps Broadcast Group, signs the agreement. Starting in 2014, pending the signing of a lease contract, the radio station will pay the airport $2,400 a month, and provide the airport with $300 worth of advertising city departments can purchase from the airport; the radio station until then will pay its lease of $3,500 a month.
The radio station will have three five-year lease renewal options. Dalrymple initially started negotiating the building lease with Randy McKone, former Round-Up Radio President who recently purchased two La Grande Radio stations.
In my mind its already done, Dalrymple said. Its just a matter of putting it on paper and making sure everybody signs.
Contact Chris Rizer at email@example.com or 541-966-0836.