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Not for Sale

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12 Guidebook for Developing and Leasing Airport Property are addressed in a standard airport lease policy. These considerations may For business and recreational gen- include stringent insurance requirements, limitations on the types of activity eral aviation travelers, the FBO will that can take place, revenue sharing agreements, and minimum levels of ser- provide the first impression of an vice that must be offered. These elements are addressed in greater detail in the airport and its community. The subsequent lease elements section of this chapter. quality of the FBO's facilities, ser- vices, and aesthetics is critical in 2.1.3 FBO Lease making that positive first impres- At most airports, FBO leases represent an area of significant interest and rea- sion. Realizing that their existing sonable complexity involving the assembly of exclusive and nonexclusive as FBO was somewhat lacking in this well as public and private attributes. The majority of general aviation airports area, Coastal Carolina Regional require an FBO to provide a variety of services that are identified in advance Airport partnered with the airport's by the airport sponsor, typically through a Minimum Standards document. In existing FBO and local business return for providing this full complement of identified services, the FBO is leaders to construct a new FBO granted the ability to sell fuel. Fuel sales are typically a significant component that would convey a positive image of an FBO's business model and income. Additional services an FBO might of the airport and community to provide include, but are not limited to, aircraft storage, ground handling, travelers. In order to achieve this maintenance and repair, flight instruction, aircraft rental, and aircraft sales. goal, the lease needed to be struc- tured in a way that would allow the Because the FBO serves as a quasi-public portal to the community, often FBO to recoup its investment in the adjacent to a public ramp, and often tasked with collecting fees on behalf of construction of the new facility. the airport, FBO leases typically contain as much airport-use agreement ter- With assistance from the state, minology as commercial real estate language. The added complexity of an the airport completed the ground FBO lease dictates that FBO leases be negotiated individually based upon the improvements for the facility and FBO service levels desired by the airport sponsor and the ability of the FBO transferred the lease terms from to profitably provide said services. the outdated facility to the new Despite the additional complexity, FBO leases should still follow the basic facility. This lease consideration, format of a standard airport facility lease and include all of the same references in conjunction with state funds to the Airport Rules and Regulations and Minimum Standards documents. and donations of equipment and supplies by the local business community, made the new FBO 2.1.4 SASO Lease financially feasible for its operator. While an FBO provides fueling service and engages in one or more aviation- related services, a SASO provides specialized products and services in one or more of the aviation-related service areas such as flight training or mainte- nance, excluding the retail sale of fuel. A SASO may operate under a direct lease agreement with the airport or as subtenant of an FBO. A corporate hangar lease may constitute a SASO lease since its underlying purpose is a com- mercial enterprise whereby in-house maintenance and fueling activity may be taking place. The lease agreement may allow for these functions taking place in-house but limit these operations to based aircraft only (i.e., no servicing of transient or third-party aircraft) in order to financially protect other on-airport FBO and SASO operators. 2.1.5 Hangar Rental Agreement A hangar lease is typically flexible enough to accommodate all hangar types, sizes, and tenants, from small T-hangars to large conventional hangars. The variable in these leases is usually the rental price. The rental price of the building may vary based on size, amenities, location, access, and condition or type of door-operating mechanism. It is not uncommon for the same size hangar to have different prices based on amenities. This type of lease generally specifies that hangars are for aircraft storage only. Hangars leased for a business purpose should be covered under an FBO