By MAI HOANG

YAKIMA HERALD-REPUBLIC

The Yakima Air Terminal board approved a lease with All Seasons Associates LLC during its regular meeting Thursday morning.

The two parcels at 3110 W. Washington Ave. have been vacant for nearly a year after its previous tenant, Marquis Development, was evicted for not paying rent.

More than a year of litigation with Marquis Development and M.A. West Rockies, which both had Brad Goodspeed as its principal, led to about $80,000 in legal fees last year, contributing to a budget shortfall of more than $136,000 last year.

All Seasons once owned a hangar that was on the property. It sold it to Marquis Development in 2005 and Marquis assumed the lease with the airport.

In May 2010, the Yakima County Superior Court terminated Marquis Development's lease for not paying rent. The court also granted ownership of the hangar to the airport.

(Marquis Development has no relation with the Marquis family, owners of nearby Wide Hollow Development.)

All Seasons filed a lawsuit against the airport in October 2010, arguing that it should have being notified about Marquis Development's eviction and the airport's takeover of the hangar.

All Seasons was a lien holder on the hangar, as it financed a loan for Marquis Development to buy the building, said Joe Falk Jr., a Yakima attorney who represents All Seasons Associates.

But shortly after All Seasons' lawsuit was filed, the airport agreed to settle.

"It was an effort of trying to be fair and considerate since (All Seasons) was broadsidedby this," said airport chairman Bill Wheeler.

Under the new lease agreement, which begins Sept. 1, All Seasons will retain ownership of the hangar.

The lease rate All Seasons will pay depends on what the property is used for --the monthly rates for commercial and aviation uses are 20 cents and 18 cents per square foot, respectively.With about 80,000-square-feet between the two parcels, the total monthly lease rates for commercial and aviation uses would be about $16,000 and $14,400, respectively.

The airport would also receive 5 percent of rent received by All Seasons if it subleases the property to a nonaviation tenant.

The new lease, however, does not settle an appeal filed by Marquis Development last fall.

Falk said All Seasons will work to get the Marquis' appeal dismissed.

While Goodspeed had intentions to pay off the financing, payments were infrequent, Falk said.

"My goal was to get (All Seasons) in there, so it's gratifying that it's going to happen," he said.

Board addresses reserve funds

Another topic Thursday morning was a new policy for reserve funds, a move prompted in part by a state audit.

The board, with two members absent, unanimously approved a new policy declaring there will now be two reserve accounts -- general reserve and a designated reserve.

The airport previously had only a single reserve fund.

The general reserve will be used for unexpected expenses, while the designated reserve will go for specific projects such as equipment replacement and airport facility rehabilitation. Reserves cannot be used for reoccurring expenses and any funds taken out of from the reserves requires approval of the airport board.

The amount of both funds, which the airport board would establish as part of its annual budgeting process for the following calendar year, would require approval by the city of Yakima and Yakima County, the airport's co-owners.

The airport wanted a policy on file before its next audit with the state Auditor's Office in September, said airport manager Lee Remmel.

In a report released earlier this year, the Auditor's Office said the airport did not effectively control costs, leading to a budget shortfall. The airports reserves were used to cover those shortfalls.

Mai Hoang can be reached at 509-577-7685 or [email protected]