November 17, 2010 Edition

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Commission, Kelleys reach
tentative lease agreement

Gloria Wilkerson
Staff Writer

At a special meeting on Tuesday, Walnut Ridge Airport commissioners met with Allied AgCat owners, Frank, Terry and Dana Kelley, and reached a tentative agreement for a new lease for the building the Kelleys' lease from the airport.

Allied AgCat's lease expired in January, and Frank Kelley refused to sign the new standardized lease the airport offered him. He has continued to make monthly rental payments in the amount of the old lease, but after failing to reach an agreement with the commissioners on a new lease, the commissioners took legal action to begin eviction proceedings against Allied AgCat.

The Kelleys'attorney filed a Motion For Alternative Dispute Resolution on Oct. 21. The motion requires both parties to participate in negotiation and/or mediation to resolve their differences outside a lengthy jury trial.

Commissioner Dan Coker told the board that the airport's attorney, David Cahoon, has been unable to reach Kelley's attorney, C.W. Knauts, and that Knauts has not returned any of his calls.

"We're all aware of the motion filed in circuit court asking for arbitration, but neither our attorney nor we know exactly what it is about the lease that Mr. Kelley objects to," Coker said.

"The airport sued us so we can't discuss items," Kelley said. He added that his attorney has had health problems and that his wife has been hospitalized for a serious health condition, which is why Cahoon has had a problem reaching him.

Coker then asked Frank Kelley, "What is it in the lease that you object to?"

Kelley told Coker that he had sent a revised copy of the lease to Commissioner Dr. Ralph Joseph that he felt was fair to both sides.

The new lease included a $200 a month rent increase as well as the stipulation that the lease will be looked at the first of each year to see if the rent would need to be increased or decreased depending on the Consumer Price Index. Kelley wanted the assurance that he could receive a five-year lease that could be renewed in the future as his business expands.

At Dr. Joseph's suggestion, the board and the Kelleys went through the standardized lease paragraph by paragraph.

They reached an agreement for a new lease that both sides felt was fair. The document will be drawn up with the needed changes and presented to the full Commission for approval. The lease will then have to be approved by John Knight, director of the Arkansas Department of Aeronautics and Ed Agnew, manager of the Arkansas/Oklahoma Aeronautics Commission.

Kelley will also receive a copy and will discuss it with his attorney before he signs it.

Walnut Ridge Airport Manager Mitch Whitmire told the board that every revenue source at the airport has to be examined and brought in line with today's economy.

"We can't charge the same amount for rent that we could five to seven years ago," he said. "The cost of everything has gone up and we have to charge more for rent to keep up with our expenses. The airport has to be solvent, and right now we're just scraping by.

"We are a business and we have to run the airport like any other business would be run," he concluded.

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