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CHAPTER 1 Introduction Airports are considered to be some of the most important tools in world commerce today, and, as such, are significant economic engines in most any community. However, airports are unique in their federal and local obligations, as they are highly regulated facilities that require large amounts of land. The land airports encompass can be seen as a valuable resource to be used to ben- efit a diverse group of stakeholders. This Guidebook for Developing and Leasing Airport Property will present best practices for airport land and facility leasing, so that the airport sponsors can consider, adapt, and embrace general themes to fit their unique requirements and operating characteristics. The reality of today's competitive environment for on-airport development projects, coupled with the need for developers to move through the public-sector process quickly, begs for examples of creativity and hybrid solutions that blend innovative approaches with tried-and-true ways of leasing and developing airport property. Third-party development, innovative financing, and tax- exempt debt structure provided by private-sector entities, along with the myriad of local and state incentives are just a few of the variables that make a black-and-white airport leasing policy inade- quate and outdated. This Guidebook acknowledges the central issues of this topic: airport management and potential tenants need to understand the key aspects of commercial property development and business agreements, and a public-sector entity may respond differently to risk than a private-sector entity. Public-sector organizations that own/operate airports may also have different motivations to develop and could enter the negotiation from very different perspectives. Negotiating and conclud- ing an airport business agreement requires special expertise and an understanding of the diversity represented by businesses and organizations that typically pursue on-airport development. This Guidebook will examine some of the more prevalent themes within contemporary agreements and development projects. While a wealth of information and strategies for developing airports exist, it is important to note that airports should identify relevant standards upon which to base their own best practices. Each airport will have its own set of the development requirements that are molded by the resources of the airport and the community and are tempered by the airport's tolerance for risk. Further, a development opportunity that might be appropriate for one airport might be completely unaccept- able to another because of tenant mix, community goals, environmental sensitivities, or for one of many other variables. 1.1 Purpose of This Guidebook The objective of this Guidebook is to provide documented research for airport management and other relevant stakeholders to use in formulating airport leasing and development policies to support public and private investments for both aeronautical and nonaeronautical uses. The 5