The North Little Rock Airport Commission will consider forgiving $130,000 that a general aviation company owes under an expiring lease, and the panel will look at approving a new lease for the same company.
The North Little Rock Jet Center's lease of the airport's main hangar for storing private and corporate aircraft contained a clause calling for rate increases that corresponded with the Consumer Price Index at different points in the lease term.
The rate increases were never collected.
Calculations suggest that the airport has missed out on payments of $130,000 and possibly more if interest or penalties were applied, according to Clay Rogers, the airport director.
Airport users discovered the lapse in reviewing the lease terms and brought it to Rogers' attention, he said.
A review of airport documents, commission meeting minutes from the time period and interviews with past commission members turned up no official documentation that the commission approved waiving the Consumer Price Index rate increases, he said.
Rogers noted that during a large part of the period in question, the airport had one employee -- the director -- to manage the airport's day-to-day operations, maintain the grounds and keep up with Federal Aviation Administration regulations, as well as track the leases.
The airport now has two full-time employees and one part-time employee, including Rogers.
The airport went through three or four directors during the lease period, which was before Rogers stepped aboard.
"We're not sure why it didn't happen," Rogers said. "It may have just been missed."
A proposed resolution "ratifying a decision" by former staff members to waive the Consumer Price Index increase says the staff granted the waiver to help the company that runs the North Little Rock Jet Center, formally known as Air Charter Express, or ACE, recover from damage that a 2008 tornado inflicted on the hangar.
The company leases the city-owned hangar, and then rents space to private individuals and corporations for their aircraft, sells fuel and performs other services on aircraft.
The storm damage forced aircraft owners to move their planes to other airports until the damage was repaired, leaving the company unable to collect hangar rent and fees for other services.
The Consumer Price Index increase was supposed to be calculated for the first time in 2006, according to the resolution.
Now, there would be potential stumbling blocks in collecting the arrears, Rogers said, notably what statute of limitations might apply.
The proposed resolution that the commission will consider at its meeting today says the commission "believes it to be in the best interest of the airport at this time not to collect payment of any portion of the CPI from ACE due to the length of time that has passed, allowing possible defenses of statute of limitation, laches and waiver."
The commission also will consider a new lease for Air Charter Express today.
The proposed lease figured in North Little Rock Mayor Joe Smith's decision to drop $4.9 million in planned improvements at the airport under a bond issue that also included nearly $10.9 million to build a new police and courts building.
The improvements that were scheduled for the airport at 8200 Remount Road included a general aviation center, a corporate aircraft hangar, expanded parking and a restaurant. The aviation center and the restaurant would both be leased to private businesses to operate.
But the city's bond counsel, the Little Rock law firm of Friday, Eldredge & Clark, had concerns about having long-term leases on buildings constructed with bond money, according to City Attorney Amy Fields.
The lease calls for a 10-year initial lease with a option to renew for an additional 10 years and another option to renew for an additional five years.
Metro on 10/17/2019