"Proposed rental rate at new Massena, N.Y., airport terminal seen as too high"

Friday, October 29, 2004

Proposed rental rate at new Massena, N.Y., airport terminal seen as too high
The Watertown (NY) Daily Times


MASSENA, N.Y. -- The Town Council is proposing that tenants in the new
airport terminal pay rent of around $5 per square foot a month, which could
mean $118,029 in additional annual revenue and a 10 percent decrease in the
property tax rate.

But local brokers say the rental rate the council is proposing is too high.

The Town Council plans to increase rental rates once airport terminal
tenants switch from the 50-year-old terminal into the new terminal, which
should take place in mid-November, town Supervisor Sanford T. Cook said at
Wednesday's town budget workshop.

"As far as I'm concerned, it's our building and we set the rate," Mr. Cook
said. He added that he wants a figure set before the renters make the
transition to the new terminal and said they'll have to do that soon because
the old facility will not be maintained or heated.

Mr. Cook said he wants to implement a $4-to-$6-per-square-foot rate, on a
monthly basis, for the federal Transportation Security Administration, US
Airways Express, which is a division of Mesa Air Group, and the Federal
Aviation Administration, all current renters.

At present, the monthly terminal rent collection is $1,699.23 -- FAA with
$708.33 and US Airways with $990.90 -- excluding TSA, which hasn't paid its
rent in more than a year. Mr. Cook said TSA hasn't paid because it
"maintains that the terminal isn't up to its standards," citing lack of
handicapped-accessible restrooms.

But Mr. Cook will be soliciting back rental fees in negotiations with the
agency.

The TSA is designated 1,439 square feet, US Airways 674 square feet, and the
FAA 194 square feet in the new 7,300-square-foot terminal, said Donald A.
LaBaff, airport manager.

If the town charges $5 per square foot per month, that would mean $11,535 a
month in rents, which would be $138,420 annually. The current rent
collection brings the town $20,390.76 annually.

If that goal is attained, it could decrease the property tax burden by 10
percent, or the money could go toward repaying the terminal's $171,000 bond,
said Councilman John F. Macaulay.

The going rate for commercial office space is $3 to $7 per square foot
annually, not monthly as the town is proposing, but it would be reasonable
for airport space to go into a $10 to $15 range per year, according to
Timothy P. Post, associate broker for Paul Post Realty, Massena, who cited
the $13-per-square-foot-per-year rate the St. Lawrence Centre mall is
paying.

Another broker thinks the town's proposed figure is high.

"That's an outrageous amount; the building would have to be made of gold,"
said Keitha Lee Lauson, owner of Grey Stone Realty, Ogdensburg. But she,
too, added that a double-digit rate per year would be rational for airport
space.

Town Attorney Joseph T. Welch will be sending letters requesting that the
renters state the amount of space they will need and when they plan to move
into the new terminal. It will also request that the agencies schedule a
time to negotiate the proposed rent increase.

"There's no question they'll want to negotiate," said Councilman Charles A.
Raiti.

The negotiations will likely start at $6 per square foot per month,
according to Mr. Cook.

"TSA's position is that there is no problem paying for space they occupy at
a fair-market value," said Lauren G. Stover, eastern field director for TSA
affairs. "We will negotiate the price, and go by the amount worked out,
whether it's $7,000 a month or not."

The FAA said it would not comment on the issue without knowing all the
particulars, and US Airways Express could not be reached for comment.

If the negotiations are complete before the 2005 town budget is adopted, the
increased revenue will lighten the load of taxpayers. If not this budget,
then the next, Mr. Cook said.

Construction on the terminal should be complete by Nov. 15, and the final
town budget is due Nov. 20.


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