Airport lease imperiled, but tenant will resolve
From our weekly issue dated March 25, 2009
A tenant at the Josephine County-owned Illinois Valley Airport is preparing to pay more than $1,700 in retroactive rent to settle a dispute regarding building improvements that could result in eviction if he doesn’t pay.
Jack McCornack has been running his company, McSquared Design, out of the airport’s historic parachute loft building since 2001. His current lease was signed on May 9, 2007, and is to expire after midnight on Oct. 31, 2011. Under terms of the nine-page lease, McCornack pays $235 per month in rent, and is given a $50 monthly discount in exchange for repairs, renovations and maintenance to the building.
However, in a letter dated Feb. 26, county legal counsel Steve Rich informed McCornack that he has “failed to perform” those obligations.
“The default is in your failure to comply with the terms and provisions of the lease agreement,” Rich wrote. “That failure automatically eliminates the conditional reduction in the lease payment you owe to the county.”
The letter goes on to state that McCornack, involved in entrepreneurial work including producing a car that runs on alternative energy, now owes the county approximately $1,786.34 in retroactive rent. A provision allowing for such collection is included in page two of the lease agreement.
“In the event lessee does not perform those obligations to the satisfaction of lessor, the monthly rental payment for the first year of this lease shall be increased retroactive to the initial date of this lease, and lessee shall pay to lessor the retroactive amount within thirty days of receiving written notice from lessor that the rental payment has been increased,” the lease states.
Rich reminded McCornack of the retroactive provision in the Feb. 26 letter.
“This is a demand for immediate payment of the total amount of the arrearage,” Rich wrote. “If you fail to pay this amount within 30 days, the county will immediately terminate your lease and, if necessary, begin legal proceedings to remove you from the premises.”
McCornack went before the county board of commissioners to plead his case during its Thursday, March 19 legal update meeting in Grants Pass. County Property Manager Phil Killian, who had visited the airport the previous day, made a PowerPoint presentation to the board regarding the building condition.
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After the presentation, Airports Manager Alex Grossi said that the work McCornack did on the building “fell way short” of the county’s expectations. Rich took it one step further.
“I think it’s self-evident from the photos that there’s been woefully little done to restore that building,” he said. He added that he considered McCornack in “ongoing breach” of the lease agreement.
Commissioner Sandi Cassanelli questioned why county officials waited so long to inform McCornack he was in default.
“To me, that is really like a slap in the face,” Cassanelli said. “I can’t justify that.”
In response, Rich said that it is McCornack’s obligation to prove where he has complied with the agreement. Page five of the lease states that “lessee shall keep accurate records of all repairs, maintenance, renovations, additions and other work and shall provide copies of such records to lessor at lessor’s request.”
McCornack said that he “would be delighted” to have the county take over the building maintenance. He added that the facility is in better shape than it was in 2007, and that he has cleaned its gutters and stopped leaks, among other improvements.
During a Friday, March 20 interview, McCornack said that he plans to pay the retroactive rent.
“I may just send them a check for the full amount they demanded,” he said. “It’s obvious the county needs the money.”
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