By Sebastian Kanally, Times Chronicle

The Oliver Airport’s rental rates will be increasing for the first time since 2018 after Oliver Council decided at its Jan. 6 regular meeting to update the Oliver Airport Land Rental Rate to $5.20/sqm per year for existing leases. 

Mayor Martin Johansen, who sits on the Airport Advisory Committee noted that it is “always a challenging discussion, no one wants to see lease rates increased, but since the lease rates haven’t been increased since 2018, it’s reasonable to expect that we would be looking to increase the lease rate.”

Oliver’s lease rate has not changed since 2018 when the rate increased from $3.00/sqm to $4.00/sqm. 

There was an Oliver Airport Appraisal conducted in 2022, which usually prompts changes through updated valuations influencing rental rates. 

However, the lease rates were not adjusted based on the appraisal at that time as it was decided that a subsequent appraisal should be undertaken once the Oliver Airport Master Plan was completed.  

While rates in general were not changed, after the 2022 appraisal there was a change to new hangar construction rates which were set at $5.00/sqm.  

The Oliver Airport Master Plan was completed and endorsed by council in July 2024 and town staff subsequently worked with Inland Appraisers Ltd. to bring forward updated Land Rental Rates. 

The Land Rental Valuation and Consultation report makes a recommendation that the range for Airport leases should be between $5.20 – $7.50/sqm, accounting for some variation with smaller leases paying the upper range and larger leases paying the lower range of rate. 

The report notes that land rentals “for general aviation at many BC airports are only occasionally reviewed and often remain unchanged for more than 10 to 15 years. As a result, this widens the gap between existing rents and what would be considered a reasonable return on the land value.”

Oliver Airport benefits from being in close proximity to all local amenities and is “a significant factor in terms of land value”. 

The report emphasizes there are few small community airports with this benefit. 

The Land Rental Valuation & Consultation Report does explain that “there is a consensus that lease, and rental rates should be a function of the underlying real estate value.”

But this could eventually change in the future. 

They further point out that “inquiries with various airports indicate that there is now an increasing trend to recognize airport lands as industrial property with a transition to a “market-based” approach to establishing rental rates rather than limiting the valuation process to comparison with other airports as doing so may not properly recognize other locational influences.”

The Oliver Airport’s assessed values were $17,310,000 for the land, and $1,138,000 for the buildings for a total assessed value of $18,448,000. 

Osoyoos properties and other comparable land sizes were consulted to contribute to the valuation.

The site is approximately 3.44 hectares (8.5 acres) with 36 hangars. The Oliver Hangar Association pays $7,700 annually for hangars 1–12. 

The Osoyoos Airport does not contain buildings such as hangars available for rent. 

In the Land Use Policies section of the Osoyoos Official Community Plan, it explains that they intend to “consider revising the definition of “airport” in the Zoning Bylaw to be more comprehensive in terms of uses associated with airports (e.g., hangars, multi-purpose space, fuelling stations, aircraft maintenance and repair, parking).” 

When it comes to the ability of Oliver to change the rent charged during active leases. Section 14 of the lease agreement explains that the town can adjust the rent to the market rate for the lease determined by an appraiser, but not more than once every five years. 

Johansen did explain that none of the leases have anything built into them for adding any increases in Consumer Price Index (CPI) in addition to revisiting the rates after five years.

This is something the airport committee will look into, while he also commented “That’s a big task to re-do them all, I don’t think that’s a reasonable approach, but it is possibly something that we can do intermittently as they come up.”