After months of acrimony, Spokane Airways Inc. and the board that oversees Spokane International Airport (SIA) have agreed on a time by which the fixed-based operator will vacate six of nine airport buildings it occupies. The two parties are set to discuss this week options for Spokane Airways relocation at SIA.


Spokane Airways will move out of the six buildings by March 20, so it has less than six weeks to agree with SIA on a relocation site at the airport and to move operations there.


Meanwhile, in letters that they sent to the media and others, a Spokane Airways customer accused SIA of favoring other businesses at the airport, and SIA Director Neal Sealock countered that the airports efforts to relocate Spokane Airways have been extensive and costly.


The discussion this week of relocation options will be the latest development in a prolonged battle between SIA and Spokane Airways, the airports oldest and largest provider of refueling and other general aviation services. The two parties, which have been discussing relocation possibilities since 2002, are embroiled in a dispute over what SIA must do to fulfill its relocation obligations under Spokane Airways lease.


Spokane Airways agreed to give the seven-member airport governing body early possession of the buildings, although the company will continue to use them until it moves out in March, says Kevin Roberts, an attorney at Spokane-based Dunn & Black PS. Roberts, who is representing the Airport Board in a condemnation action against Spokane Airways, says the Airport Board has paid for an appraisal of the buildings and has offered to pay the appraised amount to Spokane Airways once it moves out. Also, it has requested that Spokane Airways have its own appraisal done, which Roberts believes the company is pursuing.


We can then talk about what would be a fair resolution based on those appraisals, Roberts says. The parties are having open communication about trying to reach an agreement on the amount.


Airport representatives likely will meet with Spokane Airways to discuss compensation within the next few weeks, he says.


John Chastek, vice president of Spokane Airways, says he hopes the meeting this week will resolve the relocation issue. He declines to comment further on the dispute.


Last fall, Spokane Airways said it was considering legal action to stop the Spokane Airport Board from taking steps that Spokane Airways believed could leave it without enough space for its operations. Spokane Airways was founded here in the 1920s and employs more than 100 people. The nine buildings it occupies are on leased airport land on the east side of the airport. The Federal Aviation Administration is requiring the airport to demolish six of those buildings to allow sufficient lines of sight from a new $26 million air traffic control tower along Electric Avenue thats expected to be completed by August.


In late October, Spokane Airways filed a $10 million claim with the Airport Board, which it said would cover the cost of replacing the six buildings. Shortly thereafter, the Airport Board filed a condemnation petition in Spokane County Superior Court against Spokane Airways to acquire the companys leases of those buildings through eminent domain.


SIA and Spokane Airways have been discussing relocation possibilities since the airport started planning several expansion projects a few years ago. At one point, the two parties agreed to move Spokane Airways to a site at the west end of Pilot Drive, just south of Spokane Airways current site, then couldnt agree on the terms of a lease for a new building that an architect already had designed.


Last September, the Airport Board issued a request for proposals to parties interested in opening a commercial aeronautical service on the roughly 2 acres of land on Pilot Drive where Spokane Airways had refused to go. Spokane Airways and XN Air LLC, the other fixed-based operator at SIA, submitted the only bids. SIA agreed in December to lease that land to XN Air for two of four new structures it plans to build as part of a $4 million project that would add about 20 jobs to the roughly 25-employee operation.


XN Air, which formed under the name XN Avionics in 2003, focused strictly on avionics until it became a fixed-based operator early last year. At that time, it changed its name from XN Avionics and moved from a smaller hangar to a new 17,300-square-foot hangar.


Meanwhile, in a letter to the Airport Board on Jan. 2, Spokane Airways client David Law accused the board of giving preferential treatment to XN Air. Law claimed further that the Airport Board is trying to remove Spokane Airways from general aviation at SIA.


In describing these actions, vendetta is perhaps too strong a word, but that is what comes to mind, Law wrote.


Law claimed that the Airport Board showed favoritism to XN Air by helping the company obtain a more than $200,000 grant from the state Community Economic Revitalization Board (CERB) and a low-interest loan of about $800,000 to build its new hangar. Consequently, XN Air pays about half of the monthly rental fees for its facility that Spokane Airways does for its buildings, he wrote.


The Airport Board has obtained similar grants and loans on behalf of two other general-aviation companies at the airport, which has reduced their rental costs, Law said. Since SIA is publicly owned and receives federal funds, the Airport Board is required to charge the same fees to businesses engaged in the same activities, Law added.


Meantime, the Airport Board also had leased the proposed replacement site for Spokane Airways to XN Air, he said.


From my perspective, this is blatant heavy-handed unequal treatment by the Airport Board of two competing tenants, Law asserted.


Sealock, SIAs director, responded to Law in a Jan. 15 letter, writing that SIA helped secure financing for XN Avionics and other companies because those companies were considering leaving SIA and possibly Washington state if the facilities werent built. The airports revenues arent used for constructing hangar facilities, he explained.


The FAAs regional office in Renton, Wash., has reviewed the specifics of the CERB application submitted on XN Avionics behalf and the issue of fairness to tenants, Sealock added.


The Airport Board had offered to help Spokane Airways with CERB loan applications, but the business hadnt provided a qualified business plan for an eligible project, Sealock said.


Regarding the relocation issue, the Airport Board didnt agree with the FAAs decision in 2002 on where to construct the new control tower, but believed that for safety reasons, it had to go along with the decision, Sealock said.


Since then, SIA has spent more than $500,000 in its attempt to relocate Spokane Airways, including to cover architectural fees to design the proposed new building on Pilot Drive that Spokane Airways initially agreed to occupy before changing its mind, Sealock said. SIA issued a public bid for construction of the project, then had to reject bids due to Spokane Airways refusal to enter into a contract, he said.


Tim Lawlor, an attorney at Spokane-based Witherspoon, Kelley, Davenport & Toole PS who is representing Spokane Airways, said in November that the $4 million structure the airport had designed would have included about 19,000 square feet of floor space. Yet, Spokane Airways has a combined total of 63,000 square feet of space in the six buildings that it occupies now that are to be razed, Lawlor said. He said SIA told Spokane Airways it would move the company to the new building only if Spokane Airways waived its rights under its old lease agreements and signed a new long-term lease, which eventually would have raised the companys monthly rent costs by more than 100 percent. Spokane Airways current leases requires SIA to relocate Spokane Airways to comparable facilities if the need arises, and to cover the cost of relocation, Lawlor said.


Contact Emily Brandler at (509) 344-1265 or via e-mail at emilyb@spokanejournal.com.