Payson hangar lease changes draw complaints from tenants; town attorney defends contract
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Summary
Several airport tenants told the council the new Hangar 1 lease is inequitable and restricts customary aircraft maintenance; town legal counsel and airport staff said the lease tracks the International Fire Code, FAA guidance and Arizona law and that rates reflect fair-market value.
A prolonged public discussion at the Nov. 12 Payson Common Council meeting focused on new lease terms for Hangar 1 at the Payson Airport. Multiple tenants said the town’s new lease is more restrictive than prior arrangements, charging higher rents by square footage, applying a $15 monthly electricity fee and limiting maintenance that tenants said they historically performed.
Thomas West, a long-term tenant, said the town “forced us to sign a very restrictive lease” that differs from other hangar leases and limits routine practices such as storing five‑gallon fuel containers and performing owner-performed maintenance. Tom Thompson, president of the Payson Aero Club, and Mike White raised similar concerns about equity in rates and the town’s earlier representations that utilities would be covered; White warned that differential fees could jeopardize FAA grant assurances.
Town legal counsel (Pierce Coleman) and airport staff responded at length. The attorney said the lease conforms to applicable codes and statutes, disputed claims that the contract contains illegal provisions, and explained that the lease requires compliance with the International Fire Code (IFC) but allows limited amounts of fuels and authorized maintenance under FAA guidance. The attorney also said rents were set following the airport commission’s fair-market-value recommendation and cautioned that Arizona’s constitutional “gift clause” limits subsidizing utilities for specific lessees.
Council members and staff discussed whether rates should be reexamined during the next budget cycle and noted the airport operates as an enterprise fund that should be as self-sustaining as feasible. No formal council action was taken on the lease terms at the Nov. 12 meeting; staff said hangar leases and rates will be reviewed through established processes, and that lease provisions can be changed with notice.
Key quotes: “We were forced to sign a very restrictive lease,” said Thomas West. Town counsel said, “I do not believe there are any illegal, unlawful, or terms in the contract that are inconsistent with Arizona law.”
What’s next: Airport staff and the airport commission will continue their annual review of rates and lease terms; council indicated hangar rents and lease language can be revisited during budgeting and through the airport commission process.
