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Airport Finance 15 · Golf course land lease. Golf courses are not considered compatible land use by the FAA, but rules may vary from state to state. In areas where they are allowed, airports may lease land owned by the airport and adjacent to the airfield for golf course development. · Industrial park land leases. Many airports reported building industrial parks and warehouse space on airport land adjacent to the airfield. · Donations and fundraisers. Several airports hold fundraisers and solicit large donations from airport supporters. · Other Leases. One airport indicated that it leases space on the beacon tower for a cell phone antenna. Leasing and Use Agreements An airport manager must be familiar with the many types of airport leasing and use agree- ments used at small airports. Airport leases may be considered commercial use agreements or non-commercial use agreements. An array of other leases may be present at an airport facility, depending on the nature of the operation considered, such as agricultural operations or other non-aviationtype uses. It is important that an airport manager work toward consistency in the application and enforcement of lease administration and policy. This consistency is particularly important for operators of airports with commercial use agreements. Airport sponsors of federally obli- gated airports (see "Compliance with Grant Conditions" in this chapter) must also ensure that certain grant obligations are being met with regard to airport leasing policy. This guide- book will provide a basic overview of several components to successful lease administration at a small airport. Further research is being conducted in this area. The ACRP funded ACRP Project 01-02, "Guidebook for Developing and Managing Airport Contracts," and ACRP Project 01-08, "Guide- book on Best Management Practices for Leasing and Developing Airport Property." The reports from ACRP 01-02 and ACRP 01-08 are expected to be published in 2009 and 2010, respectively. For a list of ongoing ACRP projects relevant to managers of small airports, please refer to the appendix. Minimum Standards Owners of public-use airports routinely allow businesses to conduct commercial operations and other aeronautical activities from the airport. Commercial operators normally enter into a lease agreement or contractual arrangement with the airport owner allowing for the commercial operation or operations contemplated by the operator. It is essential that an airport manager develop reasonable criteria for the accommodation of commercial aeronautical services on an airport. The FAA encourages operators of public-use air- ports to develop such criteria in the development of minimum standards. Airport sponsors must agree to make the opportunity to engage in commercial aeronautical activities available to any person, firm, or corporation that meets reasonable minimum standards established by the airport sponsor. The FAA suggests that airport sponsors establish reasonable minimum standards that are relevant to the proposed aeronautical activity (4). The FAA suggests further in Advisory Circular (AC) 150/5190-5 that the objective of develop- ing minimum standards is to promote safety in all airport activities, maintain a higher quality of service for airport users, protect the public from unlicensed and unauthorized products or services, enhance the availability of adequate services for all airport users, and promote the orderly development of airport land (4).
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16 Guidebook for Managing Small Airports Minimum standards are also implemented to ensure that each like operator is meeting the same basic standards and that no one operator is given an advantage over others by the airport. Airports that have accepted federal funds agree to allow commercial entities the opportunity to engage in commercial aeronautical activities subject to meeting reasonable minimum standards established by the airport. Every airport is unique and in developing minimum standards the airport manager must attempt to draft a set of standards tailored to that particular airport. Careful consideration must be given to the specific conditions at an airport. Use of "boilerplate" standards may not be effective and may lead to unreasonable standards. Each airport should consider a variety of factors when establishing minimum standards. A detailed examination of the particular nature of anticipated commercial activities and the operat- ing environment at the airport is required. In FAA AC 150/5190-5, the FAA suggests that the fol- lowing factors be considered: 1. What type of airport is at issue? Is it a large airport or a small rural airport? Will that airport provide service to only small general aviation aircraft or will it serve air taxi operators as well? 2. What types of aeronautical activities will be conducted on the airport? Is there a demand for the business? 3. How much space will be required for each type of aeronautical activity that may prospectively operate at the airport? 4. What type of documentation will business applicants be required to present as evidence of financial stability and good credit? 5. To what extent will each different type of aeronautical activity be required to demonstrate to the sponsor compliance with sanitation, health, and safety codes? 6. What requirements will be imposed regarding minimum insurance coverage and indemnity provisions? 7. Is each minimum standard relevant to the aeronautical activity for which it was designed to apply? For example, the minimum space required for a repair station might not be relevant to an air taxi operation. Avoid unreasonable standards by selecting elements that accurately reflect the nature of the aeronautical activity in question. Minimum standards should be developed to establish an actual set of requirements to accommodate a range of commercial activities. Commercial aeronautical activities may include such aeronautical activities as aircraft maintenance, fueling, charter, flight training, sales, rental, and parts. Entities authorized to provide commercial aeronautical services at an airport are commonly referred to as FBOs. Many FBOs offer a full range of commercial services. In other cases, special- ized aviation service operators will apply to provide only a single or limited aeronautical service. Care should be taken to develop reasonable, relevant, and applicable standards for each type and class of service. For example, a space requirement for a specialized service such as avionics repair that is the same as for a full-service FBO may not be reasonable. Because airports are always changing and growing, minimum standards should be flexible to allow for changing conditions in the airport environment. Minimum standards should be some- what dynamic and reviewed by airport management periodically. Care should be taken to not adopt standards merely to accommodate a single operator or to establish unreasonable criteria that may lead to a service monopoly. It is incumbent upon an airport manager to use consistency in the enforcement and application of standards. This consistency will also reduce potential con- flict and promote the orderly development of the airport by "leveling the playing field." Airport