Up to 70% Hike in Rents Considered at Airports

Seeking to raise an extra $1 million in annual revenues to pay for major airport improvements, Ventura County officials are considering a proposal that could increase rental fees for some tenants at the county’s two commercial airports as much as 70%.

“It’s been 12 years since we’ve had a significant rent increase,” said Rod Murphy, the county’s director of airports. “We wouldn’t do this if we didn’t have to. . . . It’s time to make sure we are covering all of our operating expenses.”

The additional money is needed to replace worn-out roofs, overhaul an outdated firefighting system, install new heating and air-conditioning equipment, and pay for other projects, officials said.

The combined annual budget of Oxnard and Camarillo airports is $3 million.

Although a partial rent increase was approved last month for airport tenants, many of the increases have yet to take effect. More importantly, officials said, the adjustments didn’t go far enough.

Before implementing any new increases, however, airport officials said they plan to conduct a survey of 13 other comparably sized facilities, such as those in Palm Springs, Van Nuys, Santa Barbara and Hawthorne. The survey will help establish the fair market value of rental space.

The six-page survey, which should be completed and compiled by the end of January, will ask questions about tenant’s maintenance responsibilities, the vacancy rate and the age of the facilities, along with questions concerning finances.

After the data have been collected, airport administrators will meet with users to go over the information and options for rental increases.

“We will only raise rates as much as we need to in order to cover our costs,” Murphy said.

Officials also noted that the two airports are designed to be self-sufficient, funded through so-called “enterprise funds,” which require all profits generated by operation to be reinvested in the airports, not poured into the county’s general fund.

*

Several airport tenants said they are concerned that the rent increases could hurt their businesses.

Channel Islands Aviation, the largest tenant at Camarillo Airport, could see its rent jump from $117,624 to $199,960 a year beginning in April 2001. An official said the company would be forced to pass along rent increases to subtenants who may not be able to shoulder the costs.

“An appropriate increase would be fair,” said Mark Oberman, president of Channel Islands Aviation. “But I think if they increased rent 10% across the board and cut expenditures by 10%, that would handle any shortfall.”

He also thought it unfair to increase rates disproportionately, saying all tenants should shoulder the same percentage increase.

Some complained that the proposed increases seemed exorbitant.

“What we are concerned with is how they came up with the [70%] figure before the survey is complete,” said Ed Saenz, a pilot for Aspen Helicopter, the largest tenant at Oxnard Airport.

Still others worried that comparisons with newer airports or facilities that charge higher rents would skew the survey. Oxnard and Camarillo airports don’t pay rent to the county.

“[These increases] are totally out of line,” said Richard Fleck, owner of Camarillo Aircraft Service, a two-employee operation that repairs planes.

“No. 1, the county does not do any maintenance [on hangars] at all,” he said. “One of the reasons our rent has been low is because the tenant is fixing the buildings up. I agree that rent hasn’t gone up since I’ve been here and maybe it should a little. But if my rent went from $5,000 up to $8,000 a month, that would be all my profit.”

*

Alex Fisher, spokesman for Sun Air, said he is concerned about keeping increases to a minimum.

“We want to be assured that the county isn’t trying to earn unnecessary revenue off the tenants,” he said. “You look at the infrastructure and see what is required and then raise the funds that will accomplish that and no more. We don’t want to feed a bureaucracy.”

Murphy said the increases are long overdue, but have not been possible until now.

“It really wasn’t practical because of the economy and we had a large vacancy rate. Now the economy is better and we can do this,” he said.

The vacancy rate at the airports is about 3%.

He said that while large commercial businesses could see rents go up a total of 70%, smaller tenants would see about a 30% increase. The cheapest rental space for planes could go from $52 to $60, while a private hangar could go from $159 to $190.

Murphy said that after the increases, which could begin in July, a comparative survey to determine market rates will be done every five years, with minor adjustments for inflation in the interim. He said some tenants won’t feel the jump in fees for several years because of long-term leases.

Meanwhile, Scott Smith, deputy director of county airports, said the airports take care of major repairs on the hangars and maintain taxiways, ramps, pavement striping and sewer systems.

Because of the cost, some of these projects have been deferred, while others have been funded out of the $4.5-million reserve fund that is supposed to be available for large projects and emergencies, not operating expenses.

“You don’t wait for everything to break before you fix it,” Smith said. “We are starting to see the deterioration already. Within the next two years, we are going to see things that need to be replaced. This is not a matter of being five or six years out.”

At least one airport tenant thought that the increases were only fair.

Chuck Smith, co-owner of C & J Sales at Camarillo Airport, said he thinks that a rental agreement that only goes up every five years is a great deal.

“If you rent an office, it goes up every year. I think the airport has been below market forever,” he said. “Everyone moans when rent goes up; that is the nature of the beast. But what other business anywhere hasn’t raised rents for 15 years?”