Guam News - Guam News
Guam - One of the Airport Authorities key long term strategic goals has been slowly taking shape on Central Avenue in Tiyan, along the southern part of the runway. A number of warehouses, catering mostly to air cargo and airport related businesses are taking root.
Its by design, according to GIAA Board Chairman Mike Ysrael who says the aim has been to turn Guam into a clearing house for air cargo shipments from Asia destined for points on the U.S. mainland.
The airport authority provides the land, developers build the warehouses and find tenants to occupy them.
But Ysrael has some reservations about the terms of at least one lease agreement, approved by the prior GIAA Board, which gives PacAir Properties 5 years of rent free use of a plot of land owned by the airport.
Not true, says PacAir's attorney Randy Cunliffe. The rent has been deferred, and will be paid, as required, after the 5 year grace period has expired.
Vice Speaker B.J. Cruz has also raised questions about the PacAir lease.
His interest was perked when he heard that Guam Customs was planing on raising the fees it charges, fees which eventually get passed on to the visitors who come to Guam, hurting the primary driver of the island's economy. Soon after, he learned that GovGuam has to pay $80,000 a month to PacAir for Guam Custom's office space. In addition, Cruz says it appears PacAir has been exempted from paying property taxes.
Here too, Cunliffe disagrees saying that PacAir does pay taxes on improvements they have made to the property. And while PacAir may not be subject to property taxes, neither is the Airport Authority. And, Cunliffe says, the lease stipulates that if property taxes are imposed on GIAA, the responsibility to pay falls on PacAir.
Beyond the questions about rent and taxes, both Cruz and Ysrael point to restrictions within PacAir's lease agreement with the airport which require that the tenants PacAir subleases to, must be engaged in a business that is somehow related to air transport or airport related businesses.
Cunliffe disputes that assertion also saying that the lease does provide for subleasing to non-airport related businesses, if more suitable air service businesses can not be found. And, all the subleases, he emphasizes, have been approved and signed off on by the Airport Authority.
However, Ysrael makes the point that the rent "deferral" and the tax breaks are perks meant to promote the airport's vision "turning Guam into a clearing house for air cargo shipments from Asia to the U.S." and should only be granted to business who serve that vision.
Case in point, says Ysrael is the U.S. Government's General Services Administration [GSA] which, Cunliffe confirms, has signed an agreement to sublease space in PacAir's warehouse. The plan is to move the Social Security office out of Sirena Plaza in Hagatna, into to the Tiyan facility, and possible other Federal agencies as well, all in an effort by the Federal Governmnet to save money.
Again Cunliffe counters that the lower rents PacAir can offer are mostly due to the difference in the rental market in Tiyan compared to places like Tumon or Hagatna, where rents are naturally higher.
And Ysrael of course acknowledges his own personnel interest because his family profits from the lease payments they earn from rents paid by the Federal Government agencies and others. But his point remains the same.
For GIAA to offer incentives and benefits to businesses un-related to the airports vision, not only runs counter to GIAA's goal for the property but presents an unfair competitive advantage to all the private sector businesses, like his own, which have to pay all of the taxes on the properties they occupy in the more competitive atmosphere outside the Airport Authority.
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