"Deal to end federal agency's free ride at Ford airport terminal is overdue"

Saturday, February 5, 2005

Deal to end federal agency's free ride at Ford airport terminal is overdue 
The Grand Rapids (MI) Press


Tenants who don't pay their rent usually get eviction notices, not a new
lease on life. The Federal Aviation Administration ought to be grateful that
Gerald R. Ford International Airport is a forgiving landlord. 

The airport is offering to settle its lengthy rent dispute with the FAA by
accepting less than it's owed and allowing the agency to stay until March. 

The two entities have been at odds for more than two years over rental rates
in the airport terminal. The FAA's lease on 3,000 square feet of office
space ran out in September 2002. The agency refused to sign a new lease that
charged $53.57 per square foot, but continued to occupy the office space. 
     
Only last month did the FAA announce that it would vacate the second-floor
office space at the airport in March and offered to pay $207,000 to settle
the matter. That, however, is less than half of the $480,000 in unpaid rent
the airport is owed. Airport officials rightly have rebuffed the offer and
made one of their own. They are willing to settle for less than what is owed
to end the ordeal, but insist on getting more than the $207,000 they've been
offered. 

Airport Director James Koslosky this week made the FAA a offer, but wouldn't
reveal the amount the airport is seeking. The Kent County Aeronautics Board
has given him the go-ahead to sue the federal agency for the full amount, if
the airport's proposal isn't accepted. 

That is not unreasonable. 

Airport officials have spent enough time wrangling over rent. Other paying
tenants can be found for the space. 

The FAA seems to have forgotten that it is the landlord, not the tenant, who
sets rental rates. If the agency didn't want to pay what the airport was
charging -- and what other tenants are paying -- it should have vacated the
premises in 2002 when its old lease expired. 

The FAA paid $22 per square foot for office space under that 10-year deal,
which was signed in 1991. It wants to pay little more than that today,
offering $22.40 per square foot for the space. Not only have inflation and
the cost of doing business gone up over the past decade, but in the past few
years more than $50 million in renovations and upgrades have been made to
the airport terminal. Rental rates reflect all of those changes. 

All of the airport's other tenants -- the airlines, car rental companies,
concessionaires, even the federal Transportation Security Administration --
are paying the $53.57 per square foot rate. They seem to grasp the concept
that capital improvements, inflation and business costs affect rental rates.


It's time to end this bumpy rent ride. The airport has told the FAA how to
do that. It's time the FAA came down to Earth and did so.


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