Alkan Air is calling on the City of Whitehorse to alter a proposed lease for its float plane base on Schwatka Lake so that it would pay a seasonal rate rather than a yearly rate for the use of the land.
The request comes as the company faces a new lease agreement that would be $9,050 — thousands more than the approximately $900 it has been paying annually for years.
In a presentation to Whitehorse city council at its Feb. 21 meeting, Alkan president Wendy Tayler explained the city’s move to calculate lease rates based on market value of the land means a steep rise in the new lease, after the previous agreement ended in the fall of 2021.
Alkan was the only company to submit an expression of interest for the site after the previous lease ended.
Under the city’s policy, land is to be leased in an amount based on 10 per cent of the assessed market value, resulting in the significant increase.
“So we approached the city and, I have to say, they were great at working with us to try to find the lease parameters in a way that would work better for us,” Tayler said.
With a portion of the area not needed by Alkan Air, the lease area was decreased to help bring the price down to $9,050 per year.
“That’s still a 1,000 per cent increase,” she said, inviting council to imagine renting a home and having the rent increase by as much.
The $9,050 amount was as much as city staff could do to help get the price down, Tayler said as she explained she is now bringing it to council to look for other possibilities, including the seasonal rate she is proposing.
She noted the previous lease Alkan had with the city included a clause requiring Alkan to provide space and fuel services to itinerant float plane traffic. That’s something Alkan will keep doing, she said, regardless of whether it’s in the lease.
She noted the leased area is only used between May 1 and Oct. 31 and requested the seasonal rate be put in place, though she noted two structures on the property would remain in place during the off season as they’re difficult to move.
In answering questions from council members, interim city manager Jeff O’Farrell said for the lease rate to change from a market value approach, the policy would need to be changed. If council wants changes to the policy, he said, amendments could be considered. Outside of that, he said he was unsure how the rate could be reduced.
It was noted the previous lease Alkan took over from Black Sheep Aviation reflected a rate that had been developed when the city had initially taken over operation of the dock space from the federal government. It was based on a nominal fee with the leaseholder to provide services to itinerant pilots coming through the area.
Tayler and city officials noted those services are not in high demand; though Tayler emphasized Alkan will continue to provide services when needed.
Questioned about the possibility of a seasonal lease, land and building services manager Pat Ross explained the only time the city typically considers such arrangements is if the land can be used for something else in the off season. In this case, the site would continue to have structures in place.
“It’s not in our best interest to move towards leases, rates, being determined based on use versus the actual occupation of the land,” Ross said.
Throughout the discussion, council members appeared to want to find a way to address the issue, continuing to ask staff what could be done.
It was Mayor Laura Cabott who highlighted the policy’s objective for basing lease rates on market value is “to ensure that the city is fairly and appropriately compensated for disposal of its real property assets.”
She said the significant rise in the lease rate makes her question “whether that really meets the objective of the policy and, you know, if this is fair.
“So I’m not making a judgment call on that, but that just jumps up at me.”
Given the two options of moving forward with the bylaw for the lease or referring it back to administration for further review, council members indicated they may send it back to administration to be looked at further.
Council will vote on that Feb. 28.
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