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Not for Sale



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CHAPTER 4 Project Development Considerations The competitive environment for on-airport development projects requires a thorough understanding of today's substantive issues. Existing agreements must be taken into account with an eye toward future land or facility development. Marketing strategies should be innova- tive and include input from local stakeholders. And last but certainly not least, airport sponsors must successfully manage the development process. When it comes to the components that make up a successful airport development project, the mix varies widely. In the simplest form, the airport leases property to a tenant that develops its own improvements on airport land. From there, third-party developers, airports providing built- to-suit facilities on airport land, application of incentives to whomever develops the property, and subleases set the stage for a wide variety of successful combinations. In short, the airport will need to identify who the tenant and developer will be and determine how the project will be financed to construct a development program that meets the requirements of all involved. At the core of this issue is the reality that improvements or rehabilitations meant to meet the needs of the tenant/user will need to be "developed" by either the airport sponsor, the tenant/ user, or by a third party. And those improvements or rehabilitations will need to be financed by one of those parties. As the structure of the land lease and development project comes together, those three parties may play a variety of roles and may even share roles. The combination of air- port development components is limited only by imagination and creativity, as various tools are applied to provide incentives ultimately resulting in facilities for tenants to occupy. 4.1 Existing Agreements Existing airport lease agreements have the potential of affecting future agreements in multiple ways, thus, it becomes important to account for any tenants and agreements that may be impacted by planned development. Several factors may influence lease agreements between the airport and a potential tenant, including existing airport lease policy and noncompete agreements. Existing airport leasing policy, if applied equitably to existing tenants, will limit the flexibility of the airport to offer discounts, incentives, and other benefits to new tenants without negatively affecting the goodwill of existing tenants. It is the goal of an airport leasing policy to assure that each tenant is treated equitably, so it becomes necessary that the airport consider potential con- flict and confusion that might arise when granting lease policy waivers and exemptions to new tenants. It is the duty of the airport to assure that new agreements are not in conflict with existing leases and airport leasing policy. A cohesive and accessible leasing policy can be a key tool in mitigat- ing any confusion and conflicts that may arise later. 49