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Not for Sale

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Project Development Considerations 51 Federal economic development agency grants, American Recovery and Reinvestment Act (ARRA) bonds, Airport issued bonds, General obligation bonds, and Private financing. While an airport's operating revenue is generally derived from lease agreements and fees, most airports rely on capital improvement project funding from the FAA through the AIP. Many com- mercial service airports also levy passenger fees through the PFC Program. Other sources of proj- ect funding come in the form of economic development grants should the project meet eligibility requirements, while additional financing options are in the form of subsidized bonds. A detailed overview of available funding sources is presented in Chapter 5: Finance Overview, Section 5.6: Funding Sources. 4.4 Land and Facility Development Airports and potential tenants have a wide variety of leasing options and examples at their dis- posal. The land will more often than not require certain improvements such as utilities, access, and preconstruction development. These improvements are usually negotiated in the early stages of project development, to ensure the required elements are available when needed. As develop- ment coordinator, the airport's first priority is fostering and supporting aviation. Portions of air- port land may be occupied by entities that have little to no involvement with aviation when airports offer a competitive strategy for stimulating economic activity by preparing excess land for compatible nonaeronautical development. While some airports turn away from leasing or developing land for nonaeronautical use, nonaeronautical development can diversify an airport's revenue stream. Shovel-ready is a popular term for sites that have utilities, roads, and, in some cases, initial permitting completed before ever talking to potential developers, which only maximizes the desirability of the site. Offering shovel-ready sites that include competitive rates, land entitle- ments, utilities, facilities, and incentives will support the development of airport property and set the stage for a sustainable revenue base. In this regard, many airports develop their land before marketing ever begins. Out-of-the-box thinking can be extremely valuable because land/facility development can be a costly prospect. In cases of nonaeronautical development in particular, developers may have many options, most of them on property that can be purchased fee simple, so preparation on the part of the airport can pay big dividends. Aspects of land/facility development include, but are not limited to, the following: Utilities such as water, electricity, and sewer; Civil site work and soil stabilization; Airfield access; Roadways and public access; Development planning; and Maintenance and upkeep of common areas. The scale of the project, its intended use, the impact on the community, a balance of commer- cial enterprise versus private use, potential job creation, and public resources needed will all deter- mine the mix of stakeholders that need to be involved. While private-party leases tend to be straightforward, requiring limited stakeholder involvement (e.g., renting a hangar to the owner of a single-engine Cessna), commercial enterprise projects are typically more complex. Commer- cial enterprises require greater resources and produce a corresponding greater positive impact on