WESTFIELD – Depending upon who is speaking, the brouhaha at the airport is either about unfair taxation or it’s about unpaid debts.
Paul M. B’Shara, the representative of The Runway by B’Sharas, a restaurant in the Barnes Airport terminal building since 2008 which closed abruptly has said that the restaurant closed because the city would not lower the rent in consideration of a tax burden.
Jeff Daley, the city’s advancement officer, said that B’Shara balked when he finally had to start paying rent, and taxes, for the restaurant in the airport terminal building.
Daley explained that when the restaurant originally opened the city negotiated a five year agreement with B’Shara.
In consideration of the capital expenditure the B’Shara family had to make to open the restaurant, the city agreed not to charge rent or taxes for the first five years.
During that time period, the tax situation changed.
State Rep. Don Humason, a member of the legislature’s aviation caucus, said that the change occurred when the Leominister officials decided to collect property taxes from the tenants of their airport, even though they didn’t not own the property they rented from the municipally-owned, and therefore tax-exempt, airport.
The tenants appealed the decision but the Appellate Tax Board upheld the city officials in 2010.
Humason said that the Department of Revenue accepted the ruling and subsequently other municipalities with airports began to collect the property tax also.
Daley said that after the law changed because of the ruling, the city became obliged to levy the tax on the tenants at Barnes.
He said that the city asked state officials to delay the imposition of the new tax for a year to allow the tenants an opportunity to adjust to the new tax but the request was denied.
As detailed in a November, 2012, story published in The Westfield News, the city’s airport commission voted to offset the new taxes by temporarily adjusting the leases on the facilities rented to private entities to allow the tenants to adjust.
Daley said that the rents collected were adjusted during 2010, in an effort to offset the new tax, but since the city thereby lost significant revenue the offset was not permanent and new lease agreements, which are taking effect this year, were negotiated with tenants taking into consideration the new tax burden but also, airport manager Brian Barnes said at the time, to bring them “back to a fair market value.”
Daley said that most of the tenants have not balked at the new tax.
“Nobody likes it because it’s a change,” he said. In the 30 years tenants have been at the airport with recreational planes “they’ve only had to pay a very cheap rent,” he said, “way under” many other municipally owned airports.
“We need to come into modern time and charge appropriately” said Daley.
Daley feels that the commission, led by the mayor, “has really bent over backwards to really try to accommodate them” for a couple of years so they wouldn’t be burdened by the new tax but he said the city has to alleviate the burden on the taxpayers who don’t use the airport so the cost of storing an airplane at the airport is going to go up “but it’s not going to go up tremendously.”
However, the situation with the restaurant was different, Daley said, because the restaurant had not been paying rent due to the incentives offered to establish the restaurant.
He said that, like the other tenants, a new lease agreement was negotiated with the restaurant which called for both rent (which Daley said he thinks was set at $1,000 per month) and payment of a part of the tax bill for the terminal building based of the percentage of the building that it utilized.
In January Daley said, B’Shara went to the airport manger and “was upset that he had to pay those bills.”
Daley said that the manager pointed out that the lease required the payments and said that the restaurant had had sufficient time to recoup the capital investment but B’Shara “basically said ‘I’m not going to pay.’”
Daley said that the city monitored the situation for a few months but said he did not pay and in May the city “decided to move forward with the court system after many attempts of trying to work it out with him.”
“We wanted him to stay. We wanted him to fix the problems,” he said. “We wanted him to pay the bills that he needed to pay but he turned a blind eye to us and we had to take some steps to recoup the loss the city was enduing each month that he was there.”
Daley said that the city officials had hoped to resolve the problems with the restaurant but Wednesday night “under the cover of darkness he emptied out the entire restaurant and did not show up in court on Thursday.”
Research at Westfield District Court reveals that the city’s recent action to evict B’Shara due to unpaid rent and lease violations is not the first time creditors have initiated civil actions to recover monies they claim to be owed.
The court records include eleven cases dating to 2009 which list Paul B’Shara as agent for one of three entities – The Runway, PEAJ Inc, or the Fox Den Restaurant – owing money.
In most of the cases the judgments for the plaintiffs were ordered after B’Shara had defaulted, as in last week’s eviction proceeding, and failed to appear in court.
The amounts awarded to plaintiffs in the cases range from $202.52 to $13,047.30.
