Pemberton spurns Merlin Air in bankruptcy court 

Startup airline wanted Pemberton Helicopters’ lease; village opposed

The Village of Pemberton helped deny Merlin Air a lease at the Pemberton Airport, an affidavit sworn into B.C. Supreme Court indicates.

The affidavit, sworn by Pemberton Mayor Jordan Sturdy, was entered as part of bankruptcy proceedings for Pemberton Helicopters. The company's lease on the hangar expired in 2008 and it later went bankrupt, hoping to sell its lease to Merlin Air.

Sturdy, representing the Village of Pemberton, sternly opposed any attempt by Merlin Air to pick up that lease. He said the village had an unsatisfactory business relationship with Merlin, citing the fact that it had breached a land lease that it owned at the airport.

Pemberton claims Merlin defaulted on various obligations under the lease including rent, an airport maintenance charge and survey costs. It is believed that Merlin owes the village approximately $5,000.

Given Merlin Air's history with the Village of Pemberton, Sturdy said it had "no interest" in an ongoing relationship with the company at the airport. He told the court that the village was prepared to consent to an assignment to Blackcomb Aviation as the leaseholder on the hangar.

The B.C. Supreme Court Justice overseeing the proceedings eventually sided with Blackcomb Aviation, an independent aviation company with bases in Vancouver, Whistler, Squamish and Victoria.

The decision leaves Merlin Air without a lease at the airport and effectively ends a rocky business relationship between the upstart airline and the Village of Pemberton.

Merlin had ambitious plans to facilitate commercial air travel out of the Pemberton Airport. It signed a 30-year lease with the village in September of 2008, the first commercial lease at the airport in over 10 years. The lease provided the company with an area of 48,000 square feet on the east taxiway to build a main hangar and passenger terminal.

A month later the company began subleasing the largest hangar at the Pemberton Airport, which had previously been occupied by Pemberton Helicopters. It was to provide a temporary home for Merlin as it headed into the winter season.

The relationship went sour in late 2009. The Village of Pemberton provided the company with a notice of default, citing the outstanding fees they were owed for rent, airport maintenance and survey costs.

Merlin Air President Fred Xavier said in a letter to council for its Nov. 17 meeting that the company's investments were being used to prevent them from flying out of the airport, which they hoped to do during the 2010 Olympic Winter Games.

Xavier alleged that the money it had invested in the airport was going directly into the hands of village lawyers who were "obstructing and delaying" any attempts to start up their company.

The company said in a news release issued earlier this year that it was returning its land lease to the village, just one year into a 30-year agreement.

Sturdy disputed in an interview the claim that Merlin returned it.

"Think about it," he said. "As a landlord, if you are leasing out a piece of property and you have a deal, essentially a 20-year lease agreement, and someone decides they don't want to honour the agreement anymore, that's not a very valuable contract anymore. That's not the way things worked and that's not the way it worked in this case."

Lori Xavier, Merlin Air co-founder and spokeswoman for the company, did not respond to a request for comment by press time.

 

 

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