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Merlo Acquires L-P Hangar, Renegotiates Land Lease

HILLSBORO, OR-Louisiana Pacific sells its 24,700-sf corporate hangar at Hillsboro Airport to Merlo Corp., which has operations next door to the structure, and the Port of Portland incorporates the acquisition into Merlo's ground lease.

By Brian K. Miller | Updated on March 09, 2005

HILLSBORO, OR-Louisiana Pacific Inc., which last year moved its headquarters from Portland to Nashville, has sold its long-time corporate hangar at Hillsboro Airport to Merlo Corp. Merlo Corp. is a consulting company run by L-P founder Harry Merlo, who was ousted from the company in 1995 after its siding debacle. The L-P hangar sits on a 2.33-acre ground lease form the Port of Portland. The sale price was not immediately available.The Port of Portland Commission this week signed off on the termination of L-P’s ground lease and the transfer of the ground lease to Merlo, which already leases 4.14 acres at the airport on which it developed its own hangar in 2000. As it does with its existing property, Merlo will sublease the L-P property to its Global Aviation Inc. affiliate, which operates as a Fixed Based Operator offering aircraft charter, maintenance and management services for corporate class aircraft.L-P’s ground lease was to expire in 2023, at which time the building would have reverted to the port’s ownership. Merlo’s ground lease of the property will extend to Oct. 31, 2029, making it co-terminus with its existing ground lease. As part of the transaction, Merlo is paying the port a $147,000 “reversion deferral fee” to mitigate the fact that the building won’t be in the port’s control until six years later than expected. Merlo’s ground lease rent for the former L-P hangar property initially will be $0.34 per sf, or approximately $34,518 per year. The rent will be adjusted to fair market value every three years. In addition, Harry Merlo’s personal guarantee on its existing ground lease will be amended to incorporate the former L-P property.

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