At Wichita we annually approve (by policy board) schedules for both land rental rates, and facility rental rates for our two airports. We have not historically waived, skipped, forgiven, deferred or otherwise adjusted these schedules due to a weak economic period if these were previously agreed to in a binding use and lease agreement. Nor, when the economy is strong, we don’t ask tenants to pay more; this goes both ways.
Our facility (buildings) rental rates are established by property lease appraisals agreed to by both parties; these range from $5 - $10/s.f./year. Our current land rental rates for ICT are:
· Premium land (AOA access, etc.) 0.3388/s.f. (1/1/2011 – 12/31/2011) and escalate at 5% per year.
· Non-premium land 0.1982/s.f. (1/1/2009 – 12/31/2012) and escalate 5% every five years.
For leases that have expired or the option term has come due within the past 2 years we have had a number of tenants that have requested reduced facility and/or land rental rates. Most of these have been accommodated. For obvious purposes, our appraiser has recommended that we do not agree to significantly reduced rental rates beyond 2 to 3 years without an opportunity for another review and possible adjustment.
Your inquiry was timely, and I would like to add a couple of other questions to anyone who may care to respond. A local appraisal firm is currently evaluated our leasing policies, lease rate schedules, and escalations. I would like to know the following if anyone is inclined to offer information:
§ What are others currently getting for annual land rental rates?
§ Do others have various land rental rates for different types of properties such as improved, unimproved, AOA access, other?
§ What method of escalation are they using, and how often, i.e. CPI, FMV, fixed percentage, adjusted every year, five years, ten years, etc.?
Brad Christopher, A.A.E.
Assistant Director of Airports
Wichita Airport Authority
We are conducting a survey of airports regarding the impact of the economy on lease rates. The question is as follows: If you had a scheduled lease rate adjustment in either 2009 or 2010 within an existing lease at your airport, did you follow through on the adjustment? If not, was the scheduled adjustment deferred for a period of time, or just skipped until the next scheduled adjustment?
Thanks for your assistance.