Cover Image

Not for Sale



View/Hide Left Panel
Click for next page ( 74


The National Academies | 500 Fifth St. N.W. | Washington, D.C. 20001
Copyright © National Academy of Sciences. All rights reserved.
Terms of Use and Privacy Statement



Below are the first 10 and last 10 pages of uncorrected machine-read text (when available) of this chapter, followed by the top 30 algorithmically extracted key phrases from the chapter as a whole.
Intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text on the opening pages of each chapter. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

Do not use for reproduction, copying, pasting, or reading; exclusively for search engines.

OCR for page 73
Summary of Best Practices 73 for the developer to be able to amortize the investment the company makes in improvements, but not so long as to unnecessarily restrict the options available to the sponsor to develop and improve the airport in the future. The savvy airport sponsor will be prepared to balance these sometimes competing goals so as to attract development without impeding future options, all the while securing market-rate fees that will support the operational costs of the airport in a sus- tainable fashion. 6.2.6 Regulatory Compliance in Leasing As discussed in Chapter 3 (Section 3.2: Grant Assurances and Federal Compliance), the airport sponsor must be careful when crafting the lease agreement that federal grant assurances are not violated. Within the lease document, there are four common issues that the sponsor must be aware of: lease term length, economic nondiscrimination, airport sustainability, and the grant- ing of exclusive rights. The following addresses these points in greater detail: The lease term should not be longer than 50 years for land that has actual or potential aero- nautical uses. The FAA may consider lease terms greater than 50 years as a disposal of land and require fair market value payment from the airport sponsor. The lease must ensure economic nondiscrimination; all tenants must be treated equitably when assessing rates, charges, and terms, and, to the extent possible, any provisions and rights afforded to one must be available to all. The airport sponsor must maintain a fee and rate structure that will make the airport as self- sustainable as possible. This requires the airport sponsor to know and negotiate market-value rate for airport property. The airport sponsor cannot grant a tenant exclusive rights within the lease agreement. The inclusion of noncompete clauses that strictly prohibit the airport sponsor from leasing to a competitor of a tenant can be considered a violation of this grant assurance. 6.3 Airport Sponsor Checklist The Guidebook has presented multiple issues, concerns, and considerations that the airport sponsor must account for prior to entering into a lease agreement. These considerations encom- pass a wide range of issues that are dependent upon the type of development, anticipated uses, location on the airport, financing, funding, required financial return, grant assurances, regulatory compliance, and community impacts. The airport sponsor must be aware of each and account for their effects, financial and otherwise, when structuring and implementing a lease agreement. The following sections will provide the airport sponsor with general checklists of items that must be considered in the project development analysis (applicable to new or redevelopment projects) and when structuring a lease agreement (applicable to all airport lease agreements). The checklists should be used to prepare the airport sponsor for negotiations by stimulating the thought process and considering the long-term implications of a proposed airport devel- opment. The checklists may also be used to prepare for community discussion or to prompt further research. 6.3.1 Project Analysis Checklist New development or redevelopment of existing facilities provides the greatest challenge for the airport sponsor, as multiple planning, stakeholder, and financial variables may exist. These variables, which are often absent in the case of existing facilities such as hangars, need to be con- sidered throughout the project planning process. The airport sponsor's role in the development process is to ensure the airport's financial sustainability, consider the highest and best use of