HARLINGEN — It appears that a tenant of this Valley airport plans to expand there.
The Valley International Airport (VIA) Board held a special meeting Friday to discuss proposed lease agreement changes made by tenant Sun Valley Aviation (SVA).
SVA made four requests regarding its lease agreement that was made with Harlingen back on Aug. 8, 2012.
Based on the requests, VIA staff made recommendations and presented them to the VIA Board.
Requests and recommendations
According to the presentation, VIA staff has no objection in granting SVA’s request to exercise “Option Area A,” which is a 0.688 acre tract, to construct a 12,000-square-foot aircraft storage hangar within confines of Federal Grant Assurances and under terms deemed acceptable by the board.
SVA’s second request was to amortize their investment of approximately $510K over a 40-year term.
According to the presentation, VIA staff feels that a term of 20 to 25 years would be reasonable to amortize the investment of $510K for an aircraft storage hangar and provide a reasonable return on investment.
Additionally, the presentation stated that VIA staff would not recommend a term in excess of the 33 remaining years of the initial term set to expire in 2054.
Based on SVA’s request to extend their initial lease term to 2061, VIA staff recommended the denial of any extension of previously granted term limits given to fully amortize said improvements.
“Those were the initial improvements that were put in, as well as the hanger that was put in a few years ago,” the presentation stated.
The SVA’s last request was to lease land within the acre tract equal to the footprint of the newly constructed hangar, approximately 12,000 square feet at 15 cents per square foot annually.
“Staff believes that we really need to start looking into making sure we have a self-sustained rate structure,” Director of Aviation Marvin “Marv” Esterly said. “Particularly with the recent health crisis that we have, we know that our reserves may need to be more than we anticipated in the past, but we’re recommending that we actually use the current lease rate of 17 cents per square foot for this hangar, and that we also lease the entire Option Area of 0.688 acres as states in the Sun Valley Aviation’s land lease agreement.”
Board members’ input
Some VIA Board members expressed their concern with making negotiations to a lease.
“I’m very uncomfortable with this, doing negotiations through the board. That’s not the board’s role to be involved in negotiations,” board member Robert “Bobby” R. Farris said. “That’s the staff’s role. They bring it back and we will either approve or disapprove.”
According to Esterly, it was SVA that requested to meet directly with the airport board, chairman and himself.
“I don’t believe anybody’s negotiated anything other than staff just consuming the request from Sun Valley Aviation and bringing that to bear in front of the board for input in terms of accepting or denying staff’s recommendations,” chairman Rolando Rubiano said.
Board member Richard Franke said he thinks VIA staff has studied the situation in detail and believes the board should not negotiate, such as Farris suggested, but accept staff’s recommendation.
“I would have to agree with both Ricky and Richard and what they’ve said,” board member Vicki Moore said. “I think we should just go with staff’s recommendations and have them execute a lease on those bases.”
Board members Julie Ezell-Perez and Tito Resensez also agreed with the suggestion.
“I think staff recommendation is incredibly important. I agree with Bobby,” Resensez said. “We’re not going to negotiate certain things, but approve the negotiation that was made and be mindful of what we’re going to be doing going forward.”
Board chairman pro-tem Craig F. Lonon made the motion to approve the VIA staff’s recommendation and Moore seconded the motion.
Board members Farris and Nicholas “Nick” Consiglio chose to abstain from the motion.
