Hangar Rate Increased Based On CPI

[MooneyMitch]

We hangar tenants received a 1.9 % monthly rate increase notification via email this AM, from our local airport board folks. 

The letter states their increase is based on the 2020 Consumer Price Index.

Given the March and April serious CPI decline, we are somewhat confused!

Those of us suffering from a lack of understanding, this is quite interesting how and increase can be derived from a decline.

Open to some education from anyone that could possible shed some insight on helping us understand this.

Thank you in advance.

[ArtVandelay]

That’s the correct number if using year end 2019 number. Which is what they probably meant. Jan 2020 number.

[MooneyMitch]

2 minutes ago, ArtVandelay said:

That’s the correct number if using year end 2019 number. Which is what they probably meant. Jan 2020 number.

I did certainly suspect that.  We'll query the board folks further.  Thank you.

[David Lloyd]

If the hangar rent went up 1.9% because the 2019 CPI went up 1.9%, ask if the hangar rent will decline next year on the same basis.  Or will there be some other bs reason?

[Browncbr1]

I’d be happy with 2% increase.  Last year I got 5% 8 months into the term and year before that about 25%, against lease terms.  No reason given other than the option to move out.   

Edited May 30, 2020 by Browncbr1

[MooneyMitch]

The rate increase is not about the monetary aspect.  It's about the action in the face of current economic times.

[MooneyMitch]

Tactful, yet firm letter off to airport board expressing dissatisfaction with concept of rate increase during these difficult economic times.  Let’s see.

[GeeBee]

Up north of you in SJC, the land lease terms for tenants of the airport besides only being a 30 year term is a 5 year reassessment of the rate based upon, "highest and best use of the land", not "highest and best use of airport land" which means they value the land as if it were any plot in Silicon Valley. Guess what that does for your rent.

 

[MooneyMitch]

8 minutes ago, GeeBee said:

Up north of you in SJC, the land lease terms for tenants of the airport besides only being a 30 year term is a 5 year reassessment of the rate based upon, "highest and best use of the land", not "highest and best use of airport land" which means they value the land as if it were any plot in Silicon Valley. Guess what that does for your rent.

 

Got it.

[donkaye]

17 minutes ago, GeeBee said:

Up north of you in SJC, the land lease terms for tenants of the airport besides only being a 30 year term is a 5 year reassessment of the rate based upon, "highest and best use of the land", not "highest and best use of airport land" which means they value the land as if it were any plot in Silicon Valley. Guess what that does for your rent.

 

KSJC is having its first rate increase in about 3 years starting in July based on a 2.5% CPI.  That amounts to $14/mo to me.  I don't need to tell you what that means in terms of the overall cost of aircraft ownership.

[MooneyMitch]

1 hour ago, donkaye said:

KSJC is having its first rate increase in about 3 years starting in July based on a 2.5% CPI.  That amounts to $14/mo to me.  I don't need to tell you what that means in terms of the overall cost of aircraft ownership.

Sad in these times.