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33 to ensure that such land will only be used for purposes restrictions on the use of airport revenue to develop land not which are compatible with noise levels associated with used for direct aviation purposes (developing land set aside for operation of the airport." noise buffers) are less clear. There is some recent emphasis concerning this issue, because the Office of Inspector General (OIG) audited OTHER INNOVATIVE REVENUE 11 airports and found that they were not complying with ENHANCEMENT CONCEPTS the intent of the land acquisition assurance in that they should have disposed of the land as soon as possible On-Line Auctions of Airport Equipment once the proper deed restrictions were placed on that land (that is, the airport should not hold or lease the Airports with excess equipment or equipment being replaced land). Prior to the OIG audit, airports had assumed that or phased out may consider online auctions as a possible way the land could be developed for compatible uses and the to enhance airport revenue. Auctions allow the seller to gen- revenue contributed to the self-sufficiency of the airport. erate additional revenues and the buyer to obtain much The results of this audit have only recently been released needed equipment at or below market rate. Conducting those and follow-up is still pending. auctions online makes them more readily accessible to a Airport layout plan and airport property map issues. The broader range of potential buyers than other forms of auctions primary issue around the Airport Layout Plan (ALP) as (see Figure 27). it relates to land development is the requirement that land uses on these documents are approved, and that Conservation Easements changing these uses requires approval. The Grant Assurances require the airport to maintain A conservation easement is a legally binding agreement an ALP that shows the boundaries of all off-site areas between a property owner and a land trust or government owned or controlled by the airport for airport purposes agency that limits the use of an area of land. Some of the rights (Grant Assurance 29a), and requires showing the loca- of the owner are transferred to the latter to support conser- tion of all existing and proposed nonaviation facilities vation efforts. Although conservation easements are usually and of all existing improvements thereon. donated, they are sometimes sold. Furthermore, if an easement There is some flexibility, however, in how the ALP benefits the public by protecting important resources and is developed as part of the master planning process, as meets other tax requirements, it can qualify as a tax-deductible spelled out in Advisory Circular 150-5070-6B Airport charitable donation. Master Plan. The ALP consists of a number of drawings as listed in that circular; however, not every drawing is Most easements run into perpetuity--only perpetual ease- required (specific requirements are worked out between ments can qualify for tax breaks. Airports, being publicly FAA and the airport as the master plan is developed). owned, would not benefit from tax breaks, but might be able Any drawing that is approved as a part of the master to sell conservation easements for airport land that will not be plan's ALP however does drive the need to have sub- developed in the future. The viability of these instruments as sequent changes to that drawing approved. revenue generators for airports, however, is unknown. Air- ports may not want to permanently restrict their ability to If the airport acquired land with federal assistance, a great develop their unused lands. Given concerns about accommo- deal more care must be taken to ensure that the airport prop- dating future growth, those areas that are already off limits to erty map and the ALP documents are approved to show any construction would probably not be purchased by a conserva- changes in development. tion easement fund to begin with. Revenue Diversion Issues The FAA policy on Revenue Diversion ("Policy and Proce- dure Concerning the Use of Airport Revenue" 1999) specif- ically states that airport revenue shall only be used for the cap- ital or operating costs of the airport, the local airport system, or other local faculties owned or operated by the airport owner or operator, and directly and substantially related to the air transportation of passengers or property. The allowable use of revenue to develop airport land is clear for land that serves a direct aviation purpose (use revenue is allowed for the development of this land and revenue gen- FIGURE 27 Dallas/Fort Worth International Airport--Online erated from this land must be used for airport purposes). The auction of surplus equipment.

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34 Carbon Sequestration An airport could purchase utilities wholesale from the local utility company and sell the utilities to tenants at The Carbon Sequestration--Chicago Climate Exchange the retail utility rates they would have paid the utility (CCX) is a self-regulatory exchange that administers a volun- company. tary, legally binding program for reducing greenhouse gases in An airport steam plant could be sized to produce a cost- North America. Corporations, public entities, and organiza- effective steam district to nearby hotels or other large tions that generate greenhouse gas emissions directly or indi- institutions. rectly can join CCX by pledging to curb their contribution of Electricity from solar or wind sources could be gen- these gases to a baseline volume that decreases annually erated on airport property to offset airport electricity according to a predetermined formula. or costs, or be sold to the local electric utility and/ or tenants. As restrictions on emissions increase, CCX members trade their carbon credits to comply with local utilities may be willing to subsidize airport their emissions quota at minimum cost. CCX offset providers investment in alternative energy equipment on airport are organizations or individuals that manage or represent property. carbon offset projects, such as no-till farming, methane sequestration, and reforestation and conservation. Offset providers can earn Carbon Financial Instruments (CFIs) in Shared Services the exchange through a third-party certification of their prac- tices. Airports could adopt carbon sequestration projects in Airports may also have opportunities to provide services their excess lands and apply for CCX Offset Certification. that are of mutual benefit to the airport, airlines, and/or With possible future increases in the value of CFIs from other tenants. For example, ground handling of aircraft is their January 2007 levels of between $3 and $4, innovative provided by airport operators at a number of European air- sequestration approaches may become viable supplements to ports. In the United States, ground handling is generally conventional forestation projects. provided by the airlines or ground handling companies. If an airport can provide the services more cost-effectively Energy and Utility Services than its tenants or a third-party contractor, then providing the service represents a potential new revenue source. For Airports may have opportunities to generate and sell energy example, ground handling is provided by the airports oper- and utility services to tenants, nearby businesses or communi- ators of Orlando Sanford International Airport and Bangor ties, or regional utilities at a net profit. For example: (Maine) International Airport.