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70 Guidebook for Developing and Leasing Airport Property aspects of airport development from a variety of perspectives. The most important considera- tion of economic impact is the impact the project will have on the airport and on the airport sponsor. The airport development project should have a net positive impact on the airport and positively benefit the airport's financial position. Economic impact can be direct, as in the case of net revenue to the airport (the difference between revenue and costs of the airport develop- ment to the airport), or indirect, as in the case of new activity that directly causes new revenue from other tenants. An example of a direct benefit is the revenue paid to the airport for a ground lease for which the airport has no new additional expense associated with operating the airport. An example of an indirect benefit is a new development project on land already being leased to a tenant, which results in no new direct revenue to the airport but provides a new activity that generates additional revenue. This additional revenue can be increased fuel-flowage fees or per- haps new landing fees that would not exist without the new airport development project. 6.1.5 Regulatory Compliance in Development Ensuring that any proposed project is in compliance with all applicable FAA, NEPA, state, and local regulations is the responsibility of the airport sponsor, and, as such, the sponsor must remain engaged throughout the project planning, development, and execution phases. While it can be anticipated that a third-party developer will bring an understanding of the regulatory requirements pertaining to its area of expertise (e.g., design, construction, operation), the third party may not be familiar with the regulations that guide on-airport land use and develop- ment. The airport sponsor must ensure that any proposed land use does not conflict with the airport's FAA-approved ALP, that any development does not encroach into any safety areas, or that the structures and associated operations do not inhibit the safe and efficient operation of the airport. 6.2 Lease Execution A lease agreement may take on various forms and include differing stipulations based upon the function, location, and tenants involved (land lease versus facility lease, or aeronautical ver- sus nonaeronautical leases, for example). Many leases will be unique in their development and execution while others will adhere to a standard airport lease policy that can be uniformly applied to multiple tenants, such as in the case of T-hangar leases. The airport sponsor must determine whether the circumstances of a specific lease negotiation are unique enough to deviate from standard terms and contract language, whether deviation from leasing policy in order to accom- modate a tenant is appropriate, and/or whether similarity prevails and consistency is more important than accommodating one tenant. Regardless of whether the anticipated lease agreement is for existing facilities or new develop- ment, or for aeronautical versus nonaeronautical use, the best practices of project development discussed below should be applied. While ensuring reasonable rates, leasing policies should also state the need to comply with all state, local, and federal building codes. Lease terms should be as consistent as possible and clearly understood by all parties. An airport may decide to pursue a solicitation process, but in some cases airport property may be leased without seeking competitive proposals when it is in the best interest of the airport or community and described/offered through a visioning document such as an Airport Master Plan. If a solicitation process is required, the process and criteria for approval should be stated clearly in the policy. The leasing policy should state whether the transfer of a lease or subletting will be permitted.