Duchy Says No ‘Profit Cap’ On Airport Lease
The Duchy were responding to comments made by Council Chairman Amanda Martin at Tuesday’s public meeting in the Wesleyan Chapel.
During the session, councillors and Chief Executive Theo Leisjer were questioned about the decision to hand back the St Mary’s airport lease and pull out of running the facility from next year.
The Council cited restrictive terms on the lease, and the lack of commercial acumen in the authority as the two main reasons for their decision.
Cllr Martin told the meeting that the Duchy imposes a ‘profit cap’ as part of the lease, which means that if they make any money over a set threshold they have to “hand it over to the Duchy.”
Amanda said that cap was sufficiently low to make it “not reasonable” and that it also affected long-term investment in the facility.
“If we make a profit, we can’t reinvest it,” she said. “We have to hand it over to the Duchy.”
Amanda said this restriction had been in place since the mid 1980’s and wasn’t sustainable.
But in a statement to Radio Scilly, the Duchy of Cornwall said there appears to be “some uncertainty” over the terms being used to describe the lease.
They say there is no profit cap in place. The Council pays a peppercorn rent, which becomes a higher ‘profit rent’ if the facility makes a surplus after all costs have been accounted for.
And the Duchy said it only comes into effect after money has been put into reserves to cover future investments.
After that, if there is any profit, the Duchy will be paid some rent but the Council will keep the rest.
The Duchy also confirmed that the Council has never had to pay this higher rent in the thirty years that the lease has been in operation.
We contacted the Council’s Press Office yesterday to ask if the Chairman’s comments had misled attendees of the meeting about the terms of the airport lease and why it was being surrendered.
They say the current lease is no longer conducive to operating an airport commercially and that the Duchy is working in partnership with the Council to establish the most viable long-term solution for the airport.
They added: “At the Council public meeting on 10 November, Cllr Martin made reference to a profit cap which refers to the provision for a profit rent in the current lease. The Council therefore rejects any allegations or suggestions that she misled the audience.”