Significant hikes proposed for Yakima Air Terminal leasing rates
(The Center Square) – The Yakima Air Terminal is seeking significant increases to its rates and charges in what officials call an effort to catch up with the market rate.
The current rate for aviation land estate is set at 19 cents per square foot, whereas the proposed increase would set the rate to 28 cents per square foot.
Commercial land estate is set at 21 cents per square foot but is proposed to go to 32 cents in 2024.
Inside-the-terminal building leasing on the first floor would increase from $27.26 per square foot per year to between $50-$80. The second floor rate would go from $8.50 per square foot per year to $10, and the third floor rate would jump from $5 per square foot per year to $10.
In the past, the Yakima Air Terminal has relied on the Seattle consumer price index to adjust rates. However, Yakima Air Terminal Director Robert Hodgman – who is and former Washington Department of Transportation senior aviation planner – pointed out that the cost difference between Yakima and Seattle makes it inaccurate.
Notably, during the COVID-19 pandemic, rates and charges remained unchanged, which caused a negative economic impact on the Yakima Air Terminal.
The airport has been locked in on the same rates for three years, which are well below market rate.
The biggest proposed increase in rates by the Yakima airport is the set rate per lease of the sole airport restaurant, Reno’s, which is just outside the terminal. The current rate for Reno’s is 86 cents per square foot a year. However, the proposed increase would skyrocket to $15 per square foot a year.
“I actually went online to a commercial real estate app and looked at other restaurants within the region and that $15 is right in the price range of what you would be paying anywhere else throughout Yakima Valley,” Hodgman said at Tuesday’s Yakima City Council study session.
Reno’s has about 18 months left on its lease, according to Hodgman.
The Yakima Air Terminal’s strategy is to increase rates by 3 cents through 2027 in order to catch up with the market.
“We recommend increasing rents gradually, and tracking the annual 5% rate increase, to be implemented once rates have reached market value,” a presentation on the rate proposal stated. “Gradual rate increases may also align with continued economic recovery and ease the impact on tenants.
Community stakeholders have not been briefed on the potential rate increases as of Tuesday.
