BOCC extends construction project lease

SANDPOINT — A lease extension for a construction project at the Sandpoint Airport was approved Tuesday by Bonner County commissioners following lengthy discussion on how long the extension should be.

Kodiak Aircraft Company senior advisor Dave Schuck spoke with commissioners about the potential lease extension, which would provide MacGyver Aviation with roughly three more months to complete construction on Lot 32 at the airport.

Under the original agreement, the county leased the lot to the lessee in exchange that they would “develop by new construction at its own expense new facilities to meet the needs of airport users … The county believes it is in the best interest of the people of this county and the traveling public that additional facilities be available at the airport at the lowest investment cost possible to the taxpayers.”

The initial lease — which was approved in 2018 and already extended from July 2022 to July 2024 by the previous board — is costing the lessee roughly $2,000 in rent annually in exchange for the upgrades to the lot. The main upgrades include a multi-functional aircraft hangar.

“Article 5, section 5.1 of the lease requires the lessee to complete construction of any improvements no later than 48 months [after] lease execution,” he said.

The requested extension date would be for Oct. 1 — six years after the lease was approved.

Commissioner Luke Omodt asked Schuck if he recommends the extension, to which the senior advisor said he had mixed feelings.

“I’m torn, not because of the lack of passion and dedication on the part of the lessee,” he said.

Schuck said that even with the extension, the company would still be working on an extremely tight construction deadline. If the project was not finished by that date, the commissioners would have the option to enact the county’s abandonment clause, which could have a significant financial impact on the lessee.

The abandonment clause in the agreement states that should the lessee fail to complete construction and present the county with a city of Sandpoint certificate of occupancy within 24 months of the permit issuance — or approved extension — it will constitute abandonment of the project. 

“Lessee relinquishes all rights under this lease agreement unless the board of Bonner County commissioners approves a different time frame in writing,” the lease said.

In conversations with the lessee about the project over the past six years, Schuck said they are very dedicated to completing the project as fast as they are able to.

“I’m just concerned about the logistical ability to accomplish the construction requirements and a certificate of occupancy by Oct. 1 this year,” he said.

The senior advisor said any potential problems such as supply chain issues or poor weather could easily cause the lessee to miss their deadline.

Ron Faull, a representative from MacGyver Aviation, said he has full confidence that his organization will be able to meet its Oct. 1 deadline even if things have been difficult thus far. 

Additionally, Schuck said it could look bad for the county to enact the abandonment clause especially when the lessee has put so much money into the project. However, it could also look bad if the county continuously allows companies not to meet construction deadlines and continues to approve numerous extensions.

Commissioner Steve Bradshaw moved to extend the deadline to Dec. 31 of this year. However, Commissioner Asia Williams said she would rather approve the original request, then if extra time is needed, require the lessee to return and request another extension.

After some discussion regarding the best possible options, especially considering the possibility of the use of the abandonment clause, Williams moved to table the motion until a special meeting could be scheduled with Schuck and the lessee so specific questions could be answered for the board.

That motion failed in a 1-2 vote.

After a few more minutes of back-and-forth, a third motion was made by Omodt to approve the original deadline extension date of Oct. 1. Despite protests from Williams that more answers were needed to make a well-rounded decision on the matter, the motion passed in a 2-1 vote.