The Department of Transportation & Public Facilities took money intended to be used for “relief” and responded by threatening a 10.5% interest penalty on late payments from struggling Alaska businesses –on top of already onerous lease increases.
18 months prior to the current public health emergency, Alaska companies asked the administration and DOT&PF to review the steep, and in our review some cases unlawful, rental increases implemented by the Walker administration at the Deadhorse Airport. The request was made in the context of the recession that devastated the industry from 2015-2018, weakened the service industry and changed the economics of lease rates.
The administration and DOT&PF have, to date, ignored the request to address the harmful actions of the previous administration.
When the current public health emergency occurred along with the global crash in oil prices, work stopped for these Alaska companies and the rental payments became a temporary, unbearable burden for struggling businesses.
On May 1st, service companies asked the administration and the DOT&PF for relief in the form of:
a suspension of payments during the current health and economic crisis and
a freeze on lease increases until a fair market value appraisal, acknowledging the new economic environment at the Deadhorse Airport, could be completed.
The Alaska Department of Transportation & Public facilities was recently awarded $49 million under the CARES Act.
The law dictates that funds are to be used at State owned airports to prevent, prepare for, respond to, and reduce the adverse impacts of the current public health emergency”. I.e. accommodating delayed lease payments without charging a punitive interest rate of 10.5%.
The inaction regarding the steep rental increases and the action taken by a government agency to make money off businesses who are struggling to keep their doors open certainly sends a message to the private sector.