JOHNSTOWN – Fulton County officials are keeping a close eye on the long-term lease deals with four businesses at the Fulton County Airport after the town began assessing property taxes on two of its tenants.
The town assessor’s office in 2011 informed the owners of two hangars, R&R Aviation Supply and HangAir, they each be subject to property-tax assessments under state real property tax law, even though their buildings are on county-owned land.
Each company ultimately responded by suing the town, the Board of Assessment Review and town Assessor Katherine Hillock.
R&R Aviation Supply, which filed its suit in July 2011 over a $279,000 assessment, argued the site should remain tax-exempt because it’s on public land and serves the public.
But owner Ron Rios and the town settled in December in exchange for a reduced assessment of $115,000, according to a stipulation of discontinuance signed Dec. 20 by state Supreme Court Justice Richard T. Aulisi.
HangAir filed its lawsuit in July, saying the assessment ultimately should be reduced from $270,000 to $35,000, while maintaining the property should still be considered tax-exempt.
That case remains active and has not been settled, according to court records.
HangAir has not asked the county to modify its lease agreement to account for the potential tax expense, but R&R Aviation Supply, which in 2010 signed a 30-year lease to build a second hangar, put its building plans on hold and is now seeking to renegotiate the second lease.
Construction never began, and the company has not made any of its $1,100-per-month rent payments on the proposed second building, Mraz told the Fulton County Board of Supervisors’ Buildings & Grounds Committee last week.
“He signed that lease on the assumption he wasn’t paying property taxes,” Mraz said. “So he came back and said he still wants to proceed, but he wants to talk about modifying the lease because he’s got to pay taxes on this building.”
The committee was considering a resolution that would revise the lease, but after an executive session to discuss the proposed deal, Mraz was asked to continue negotiations.
Mraz said the negotiations are friendly, and he expects to have a proposed lease agreement for the committee to consider at its meeting later this month.
Town Supervisor Nancy MacVean, a member of the Buildings & Grounds Committee, said she was glad the R&R Aviation Supply lawsuit was settled. She was not able to pinpoint how much the legal challenges have cost the town.
“We have to pick our battles a little more carefully,” she said.
Another airport tenant, Grandma Millie’s Bakery, which operates out of the county-owned restaurant space, is now working under terms of a six-month lease, paying $175 per month, while both parties wait to see if they’ll be taxed in 2013, Mraz said.
The county’s fourth airport tenant, The 195 Factory, an airplane repair and restoration shop, has not been taxed, Mraz said. But the company is seeking to renew its lease with the county, which brings in $12,000 in annual revenue. The Buildings & Grounds Committee discussed the proposed terms of the extension in the executive session last week before asking Mraz to continue negotiations.