Tri-City port districts consider rent breaks amid pandemic
Tri-City ports are contemplating rent relief policies for tenants as the coronavirus pandemic takes its economic toll.
The Ports of Pasco and Kennewick authorized three-month rent deferral program for tenants whose business is disrupted by Gov. Jay Inslee’s Stay Home, Stay Safe order, which sidelines all nonessential activity through at least May 4.
The Port of Benton Commission will take it up in May, and the Port of Walla Walla previously agreed to defer rent.
Pasco, which operates the Tri-Cities Airport, citied the devastating impact the pandemic has taken on aviation for the move.
Randy Hayden, the Pasco port’s director, said tenants at the airport and elsewhere have requested assistance. Some did not pay April rent.
Bergstrom Aircraft, the fixed-based operator on the airport’s east side, asked for free rent after it was forced to lay off a third of its idled employees, he said.
While it isn’t considering free rent, Hayden said the port has an interest in ensuring Bergstrom and its other tenants stay viable. Bergstrom supplies valuable services to the aviation community, and there is no other business lined up to replace it, he noted.
“We want to try to help our businesses to stay in business. It’s good for them but it’s also good for us,” he said.
Bergstrom isn’t alone. Buck Taft, the airport’s director, said every airport tenant has requested relief following a staggering 96 percent drop in passenger traffic.
“This isn’t just a Pasco problem. This is a national problem,” Taft said. The four airlines – Allegiant, Delta, United and Alaska – all requested deferrals or relief. Car rental agencies have sought breaks as well.
The Port of Kennewick approved a rent deferral program for hospitality-focused tenants when it met April 14.
Tim Arntzen, the port’s executive director, said the governor’s stay-home order is falling hardest on public-facing businesses.
Amber Hanchette, real estate director, said tenants tell her they’re barely hanging on.
“Each of them has had to make drastic changes,” she said. Cedars Restaurant, Ice Harbor at the Marina and Cave B Winery have closed. Many have laid off employees.
Arntzen left the door open to extending breaks to non-hospitality businesses, but called it a good industry to focus on first.
The rent relief programs defer rent but do not forgive it. Free rent could run afoul of a state law that prohibits “gifts of public funds.”
In Pasco, deferrals are open to tenants who are current on rent and who can prove they have sought relief through other COVID-19 emergency funding programs.
The CARES Act Paycheck Protection Program authorizes $349 billion in forgivable loans with more money expected to be injected into the popular program.
“If they haven’t applied for the Payroll Protection Program, encourage them to because it’s a whole lot easier than this,” said Vicki Gordon, a Pasco port commissioner.
Rent for April, May and June would be deferred to Dec. 31, 2020. Any past due balances on Jan. 1 would begin accumulating interest and late fees.
Hayden said the port could revisit terms of the deferral program later as the pandemic evolves.
In Kennewick, rent deferrals will be handled on a case-by-case basis.
Ports are public taxing entities that often lease facilities in marine, industrial, office and other locations to support economic development. The Washington Public Ports Association is providing guidance to members faced with requests from tenants desperate for rent relief.
Tenants are still responsible for paying leasehold taxes to the state, but they too can be deferred.
The Port of Seattle announced that it will not evict tenants from its facilities if they are unable to pay rent through June 30. It authorized its director to provide added immediate relief to port tenants such as maritime and real estate tenants.
The Ports of Everett and of Camas-Washougal have enacted rent relief policies, according to the Washington Public Ports Association.