The Grayson County Regional Mobility Authority unanimously approved an increase in rates for five transitional leases at North Texas Regional Airport — Perrin Field. The rates drew some opposition from airport tenants who felt that the increases were too high and would lead some to leave the airport.
“I have a feeling our tenants will not live with that and will find another place to park their airplanes,” Rod Tatchio, representing N.T. Aviation, said Thursday of his tenants that lease space out of a hangar on his leased airport space.
Under the changes approved by the GCRMA board of directors, the airport will now charge $2.70 per square foot, per year. Cassidy Berenato, business development director for Texas Aviation Partners, said the five transitional leases were at different rates previously, but said this increase did represent a noticeable increase in those rates.
Berenato said the five leases affected by this change are at a transitional point in the terms of the lease. For these leases, the first half of the lease is based on ground-lease rates, which typically are lower. However, for the second half of the term, the lease transitions to a facility lease, she said.
Berenato said four of the five leases are for hangars and property used for personal use, with Tatchio and N.T. Aviation as the only commercial use of the five. N.T. Aviation operates a series of T-hangars. Berenato said one of the five leases transitioned into the facility-rate phase in April and has been waiting for new rates since that time.
Thursday’s action follows more than seven months of research and work into updating the lease rates at the airport. These efforts started nearly one year after Texas Aviation Partners started providing operational services to NTRA.
At the time, officials said some ground leases were as low as one cent per square foot per year for remote, undeveloped portions of the airport.
As a part of the research, Berenato said representatives for Texas Aviation Partners surveyed the lease rates of both area airports and smaller airports across the country. Ultimately, representatives decided to focus solely on the NTRA’s market itself when setting the prices due to the unique nature and location of the airport.
Berenato said that it is difficult to compare NTRA to other airports due to its proximity and distance from the Dallas-Fort Worth Metroplex. As an example, it is not fair to compare it to airports in McKinney. At the same time, more rural airports do not have the same proximity to a large urbanized area that NTRA has, she said.
“For every reason you can think that they are comparable, you can think of three reasons why they are not,” she said.
In response to the proposed rates, Tatchio argued that they were far too high and would ultimately cost the airport tenants in the long run. As an example, Tatchio said his rent now was higher than what he collects in rent from his tenants. In order to offset this increase, Tatchio said he would need to raise his rates from the mid $200s per month to close to $400.
As the board was about to vote on a motion to accept the proposed rates, Tatchio interrupted and asked the board to delay its action for one month so that he could conduct his own survey and bring back proposed rates for the board to consider. Additionally, Tatchio requested a copy of all the research done by Texas Aviation Partners and a list of airports used in making the decision.
“Under the terms of our lease, it is supposed to be based on comparable hangars at comp airports and that is what we want to base our rate on,” he said.
Tatchio asked Berenato whether special consideration was given for leases that were used to generate revenue and income. Berenato said Texas Aviation Partners considered a higher rate for similar uses, but ultimately elected to keep rates standard.
In response to the request, board Chairman Robert Brady said he was unsure what would be gained from the additional time. He added that he felt the rates should be based on what the market can ultimately support.
“We are not out to be gouging,” Brady said. “We are here to be fair. It may not seem fair now, but the market says it is.”
Following Tatchio’s request, the board returned to the motion for a vote, which had a second. The motion was passed without any further discussion.
Following the meeting, Berenato said Thursday’s action will have all transitional leases settled for at least the next three years. The next negotiations will likely come in about five years, she said, as some leases come to an end of term and will need to be fully renewed.