Cape Girardeau City Council grows impatient with Commander

Saturday, May 2, 2009

Cape Girardeau allowed unpaid rent on Commander Premier's 52,000-square-foot building to grow to $354,000 because the company assured the city repeatedly it was on the verge of finding investors, members of the Cape Girardeau City Council said.At the same time, restrictions on how the building can be used meant that having a tenant making promises of future payments was a better option than evicting Commander Premier with no prospects for a replacement tenant.

"It has just drug on," Ward 6 Councilwoman Marcia Ritter said. "And then they were certainly telling us that they were in the process of that, in the process of getting additional financing. It is one of those things that has elongated longer than anyone could believe."

Commander Premier signed a lease on the building in late 2005. The facility, built for a company called Renaissance Aircraft, had been sitting idle for many months. At the time the lease was signed, Commander Premier was given six months at no charge and a payment schedule that required gradually increasing payments until the city's income was enough to make payments on the bonds used to finance construction.

During that time, Commander Premier has set up shop as a repair and overhaul facility for the roughly 1,000 Commander aircraft in service. The investors, a group of Commander aircraft owners who purchased the company's name and parts while it was in bankruptcy, also intended to begin building new airplanes.

But that has not occurred, and now the company faces a deadline from the city to either find money to make the lease payments or be evicted. If eviction takes place, the city will still be stuck with bond payments totaling about $250,000 a year and a building that can only be used for aviation-related businesses.

"Their industry meets the original requirements, and individuals in their industry are hard to come by," Ward 5 Councilman Mark Lanzotti said. "We have half a bird in the hand, that is the point."

It would be easy to just throw the company out, Lanzotti said. But with few prospects for a new tenant and the thought that doing so would cause the workers who repair airplanes to lose their jobs, the city has been reluctant to act.

Commander Premier has paid a total of $94,000 in scheduled lease payments. No payment has been received since December 2007, and the total back rent due is $354,000. The company is scheduled to begin paying $21,016 a month beginning in January. Since Commander signed its lease in October 2005, the city has spent $803,000 on bond payments.

Covering the bond payments has been a big drain on the city's operating reserve, which has fallen from $1.4 million in June 2004. The city is unsure at this time what the balance will be July 1, the start of the new fiscal year, but all indications are that it will be $100,000 or less.

"Why have we hung on so long?" Mayor Jay Knudtson said. "As we have explored options with our legal team and bond counsel, it became unfortunately clear that we did not have a lot of options."

Commander Premier is now under a city-imposed deadline, set to expire later this month, of showing movement toward finding new financing or being evicted. Commander Premier's president, Greg Walker, said earlier this week that he expects a final resolution to the financial issues within 60 days.

The city's legal standing has been the subject of closed-session discussions by the council, Knudtson said. In a conference call with the potential Canadian investor, who he did not name, Knudtson said he was assured that the new investor was on the verge of financing a deal for the company.

"He indicated he was in the final stages of securing financing and if in fact he was approved he had every intention of keeping the Commander facility in Cape Girardeau," Knud­tson said.

If the investor was talking about moving Commander, Knudtson said, the city would already have acted on eviction.

Council members interviewed for this story said their patience is growing short. Ritter said the time for decision cannot drag out and Lanzotti said he had no answers for how long he was willing to allow.

Ward 4 Councilwoman Loretta Schneider, who is worried that the city could be forced into midyear budget cuts if the issue is not resolved, said she wants to hear good news soon. The council meets Monday night for a regular session, she noted.

"I think we will be having at least some discussion of this at every meeting," Schneider said. "We will have a meeting on Monday night and we were hoping to have a good answer by then."

rkeller@semissourian.com

388-3642

Pertinent addresses:

Cape Girardeau Regional Airport, Cape Girardeau, Mo.

401 Independence St., Cape Girardeau, Mo.

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