A Guidebook for the Preservation of Public-Use Airports (2011)

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38 This chapter provides commentary on certain long-term airport preservation background issues, strategies, and mechanisms. These issues, strategies, and mechanisms are of particular impor- tance because they, (1) could be a fundamental part of the preservation plan for many public- use airports, or (2) the strategy or mechanism is relatively innovative and may provide some airport advocates with useful new means for preserving public-use airports. In addition to using the Guidebook’s “Airport Advocates Issues Checklist” (see Chapter 4, Table 4-4) to evaluate an airport’s basic preservation risk factors, airport advocates are strongly encouraged to pay particular attention to an airport’s federal and state grant obligation status, the implications of private versus public ownership, an airport’s total available infrastructure, an air- port’s integration with local land use and planning, and the extent and effectiveness of an airport’s community education and outreach efforts. At most airports, these issues could be key parts of an airport’s preservation strategy and plans. Unaddressed risk factors in any plan may greatly reduce the effectiveness and relevance of an airport’s preservation strategy and action plan. It is important therefore for airport preservation action plans to carefully consider all potential issues and strive to move each issue out of the “risk” status. Sometimes it may not be possible to address 100% of a risk issue, but it is certainly worthwhile to at least incrementally reduce the severity of a risk issue, even if it cannot be eliminated entirely. An Airport Advocate’s Commitment to Positive Improvement An airport advocate’s commitment to improving an airport’s relationship with its neighbors and host community will be noticed by airport critics and others. An airport advocate’s personal commitment to making an airport a better neighbor and a positive contributor to community values is important. Commitment to improvement helps create a more cooperative environment where airport advocates and airport critics can more easily work together for constructive out- comes. It is vital for airport advocates to pursue win-win solutions and outcomes. The only other likely outcome is a win-lose scenario wherein airports are all too often the losers. If airport advo- cates work closely with the surrounding community to identify and define these issues that gen- erate conflict, the airport is more likely to reach solutions. In summary, airport advocates should be positive, constructive, and respectful. Federal and State Airport Aid Grant Obligation Status Federal and state airport aid grant obligations have done more to preserve public-use airports in the US than any other single factor. 1 There are over 4,000 publicly owned public-use airports in the United States today. 2 Most of these public-use airports are subject to one or more federal C H A P T E R 5 Select Long-Term Airport Preservation Strategies and Mechanisms

Select Long-Term Airport Preservation Strategies and Mechanisms 39 and/or state airport aid grant obligations that either temporarily, or permanently, protect these public-use airports from potential closure. It is FAA policy to fully enforce its airport aid grant obligations and the FAA will go to court if necessary to do so. 3 The FAA Compliance Manual is FAA Order Number 5190.6B, effective September 30, 2009. This manual of 600-plus pages describes, in detail, the obligations of airport sponsors regarding grant assurances, surplus and non-surplus property obligations, and other related applicable fed- eral requirements. Airport sponsor obligations to the federal government are particularly effec- tive and important in preserving public-use airports and protecting them from closure or rede- velopment for non public-use airport purposes. In most cases, accepting federal airport aid funds activates airport sponsor assurances and grant obligations. It has been observed that some juris- dictions have decided not to accept federal airport aid grants so as to specifically not activate air- port sponsor assurances and grant obligations. Airport advocates should make every effort to see that both existing airport sponsor grant compliance obligations are met and to encourage and facilitate the acceptance of new federal and/or state grants so as to ensure that new or additional grant compliance obligations come into force and effect. Typically, federal and state airport aid grant compliance obligations will legally compel and require the airport sponsor to keep the public-use airport open to the public and properly maintained and supervised. State airport aid programs vary considerably and must be assessed on a state-by-state or even an airport-by-airport basis. Airport advocates are advised that only the FAA or the state agency providing grant funds can determine the existence, extent, and length of time of applicable sponsor grant obligations. It would be inappropriate and speculative to rely on third parties to interpret FAA or state grant obligation documents and policies. Such interpretations need to come from either the FAA or the applicable state agency. Public Versus Private Ownership In 1970 there were about 2,850 privately owned public-use airports in the United States. 4 In 2007 there were about 930 privately owned public-use airports. 5 From 1970 to 2007 there has been about a 67% reduction in the number of privately owned public-use airports. 6 In the same period the number of publicly owned public-use airports increased by 8.6%. 7 Privately owned public-use airports are far more vulnerable to potential closure than publicly owned public-use airports. The contraction in the number of privately owned public-use airports is principally due to air- port closure and redevelopment of airport property for non-airport uses. Causes cited in the research for the closure of privately owned public-use airports include generational shift, insuf- ficient profitability, shrinking customer base, increasing costs, and high land values. Although some privately owned public-use airports make the transition to public ownership, the number appears to have been limited. National airport statistics clearly show that a privately-owned public-use airport has a better statistical chance of long-term survival as an airport if it is converted to public ownership. Given this situation, it would be prudent for airport advocates to make conversion to public ownership a candidate agenda item for any action plan for the preservation of any privately owned public- use airport. Airport advocates need to know that converting a privately owned public-use air- port to public ownership usually takes many years and certainly is not free of potential contro- versy. Public ownership usually means purchase of the airport from the private owner by a public entity. Public entities include cities, counties, municipalities, commissions, authorities, and state government. Funding for the public acquisition of a privately owned public-use airport often comes from the FAA. Prior to funding such a project, the FAA would probably first want to see

40 A Guidebook for the Preservation of Public-Use Airports a professionally executed airport feasibility study, and an airport master plan and have a highly motivated and technically competent public entity as the airport sponsor and future owner. It would not be at all unusual for the public acquisition of an airport to take 5 to 10 years or longer. The outcome, however, is very important because the newly acquired airport would have stable long-term ownership, better access to future federal funding, and, in all likelihood, be sub- ject to federal airport aid grant assurances that would require the airport to remain open as a public-use airport, in perpetuity. In this manner, conversion to public ownership, just by itself, could permanently preserve a formerly privately owned public-use airport. Total Available Airport Infrastructure There is a relationship between the magnitude and condition of an airport’s infrastructure and its probable future vitality and perhaps even survival. FAA’s data on closed public-use airports reveal an important numerical bias. The bias is that airports with more infrastructure (e.g., longer runways, paved runways and taxiways, runway and taxiway lights, and fuel and other air- port services) had somewhat less chance of closing than public-use airports with notably less air- port infrastructure. 8 The level of investment in needed airport infrastructure can be predictive of an airport’s future. 9 The greater the investment made in needed airport infrastructure, the greater the chance of an airport being, or becoming, relevant and surviving. In the long run, low levels of investment in an airport’s infrastructure invites decline of airport serviceability, ser- vices, relevance, and perhaps even survival. The link between airport closures and observed infrastructure deficiencies is apparent. Airports with shorter runways, few or no taxiways, few or no paved operational surfaces, deficient lighting, poor maintenance, and/or few or no airport services, are at a substantial competitive disadvantage compared with airports without these deficiencies. 10 Airports without these deficiencies can serve a broader segment of the general aviation market, generate revenues by selling more products and services, and use these resources to provide a better airport experience to the airport user. 11 The implications are clear—the long-term survival of a public-use airport is enhanced when the airport owners and operators make continuing and relevant investments in the airport’s physical and airport services infrastructure. A halt in infrastructure and airport services invest- ments often leads to decline in serviceability and, therefore, viability of the airport. 12 Investment in infrastructure generally falls within one of three broad general categories: capi- tal operational infrastructure (typically runways, lighting, buildings, etc), airport services infra- structure (typically fueling, FBO facilities, restaurant facilities, etc.), and general maintenance and repair. Capital operational infrastructure tends to be the most costly and is frequently not revenue producing. Federal airport aid and state airport aid programs tend to focus on providing such cap- ital infrastructure. Airports without access to airport capital aid are operating at a long-term eco- nomic disadvantage. Airport services infrastructure typically is revenue producing, but often is accompanied by high operating costs. Airport services infrastructure, because it is revenue pro- ducing, tends to attract investment from profit-motivated services providers. General mainte- nance and repair is an important form of infrastructure investment that, in time of financial stress, is often deferred or sometimes dropped entirely. Deferring maintenance and repairs is usually counterproductive in the long run. Failure to provide maintenance and repairs to capital opera- tional infrastructure usually shortens the service life of such infrastructure and accelerates the need for either capital infrastructure rehabilitation or replacement. Airport sponsors accepting FAA funds are required to properly maintain FAA-funded projects throughout their useful life. Not all airports will qualify for federal funding. There are procedures where the FAA can review the airport to assess whether it meets federal criteria for inclusion and serves a role in the

Select Long-Term Airport Preservation Strategies and Mechanisms 41 National Plan of Integrated Airport Systems (NPIAS). If the airport meets the criteria, serves a necessary role in the airport system, and has a potential public sponsor, the FAA may provide funding to assess the feasibility of the airport. Integration with Local Land Use and Planning A fundamental part of any long-term airport preservation strategy should be a genuine effort to improve and/or achieve the best possible mutual integration of the airport with local land use and planning. This task can be difficult because many airports are already surrounded by long- established airport-incompatible land uses. It is in the interest of airport advocates and airport preservation that continual efforts be made to improve the local land use and planning around airports. No matter how good, or how bad, local airport land use planning and zoning can always be made incrementally better. Much has been written about airport-compatible land use planning and zoning. Application of effective planning and zoning guidelines at the local level can only emerge from local commu- nity interaction. What constitutes airport-compatible land use and zoning depends on the size, use, location and situation of the airport and its environs. What is a compatible land use for one airport may be totally incompatible for another airport. The purpose of this section is to emphasize the importance to airport advocates of under- standing and actively pursuing improvements in local airport land use and planning. In doing this, both the community and the airport users will become more knowledgeable and sensitive to airport land use and zoning issues, flash points, and potential remedies. Ignoring pursuit of improvements in airport land use and zoning risks allowing good situations to go bad, and bad situations to get even worse. Community Education and Outreach The research behind this Guidebook involved hundreds of interviews. In these interviews, community education and outreach was the most frequently cited action that could be done to help preserve public-use airports. 13 It was cited almost twice as often as the next most frequently cited action—more airport funding. Community education and outreach far and easily sur- passed more money as a factor for helping to preserve public-use airports; however, public-use airport preservation is just as much about people, as it is about infrastructure, airport econom- ics, and myriad other technical and legal issues that affect airports and airport users. Of the 16 airport closure risk factors, community education and outreach is the one risk factor where virtually every type of airport advocate can play a productive role in advancing airport preservation. 14 Additionally, community education and outreach is also one of the most malleable and adaptable of all the airport preservation tools. It can also be done on almost any budget. Community education and outreach is not propaganda. It is not a hard sell; it is not “spin.” It is the collection of many acts, large and small, that serve to better inform interested parties, to control and correct half-truths and outright misinformation, to connect people with each other, and to help build informed consensus and consent. Community education and outreach lessen adversarial situations. Airport education and outreach is all about talking to airport critics and skeptics and letting them get to know more about airports, what happens at airports, and how airports serve members of the community. Many articles, manuals, and guides have been written about community education and out- reach processes for airports and airport advocates. What constitutes good community education

42 A Guidebook for the Preservation of Public-Use Airports and outreach efforts for your airport depends on the size, use, location, and situation of the air- port and its environs. Sale of Airport Land Development Rights A relatively new tool for the preservation of public-use airports is the “purchase of development rights.” Exactly what is the purchase of development rights (PDR) and how does it work? PDR involves the payment of funds to a landowner by another party in return for an agreement and deed restriction not to further develop the property or only to develop it in certain limited ways. How and why did PDR come to be? Although not widely known or understood by the general public, the purchase of development rights (i.e., PDR) is a land and property preservation tool that has been used for many years by farmland, open-space, parkland, and historic property preservation advocates. Farmland, open-space, parkland, and historic properties are viewed by many as socially, culturally, or environmentally desirable community features and uses of land and property. Unfortunately, in many locations these property uses are not economically advan- tageous for the property owners. Simply stated, it is often much more profitable for landowners to sell and/or develop certain properties to their highest and best economic use then it is to pre- serve it as farmland, open-space, parkland, or historic properties. When a community or another entity has an interest in preventing certain properties from being sold and/or developed, the most conventional solution has been for the community or other interested party to purchase the prop- erty outright at market or near market value to preserve it. This can be an expensive solution. PDR is an alternative to outright purchase. The benefit of PDR for land use preservation over outright public acquisition is that PDR acquisition usually costs substantially less than outright purchase, there is less liability for the purchasing entity, the property remains in private hands under private management, and the property remains on the local tax rolls. In essence, the land owner is “selling” his/her rights to further develop his/her property in the future in return for (typically) a cash payment. The original land owner still owns the land, but has agreed to and has been compensated to not develop the property further. The purchase of airport development rights is a voluntary “willing buyer and willing seller” transaction. The PDR usually incorporates two documents: a development rights purchase contract and a development easement, which is recorded against the deed of the airport property. PDR contracts and deed restrictions are strictly enforceable by the courts. The size of the payment to the land owner is typically established by appraisal in combination with negotiation with the property owner being paid approximately the estimated difference in the economic value of the land between its cur- rent to be preserved use and the economic value of the land if used for its reasonable and attainable alternative highest-and-best use. The PDR tool model that has preserved many parcels of farmland, open-space, parkland, and historic property can also work to preserve public-use airports. The FAA and the State of New Jersey both have airport preservation programs that use the purchase of airport development rights. The New Jersey airport PDR program was modeled directly from the state’s farmland and open space preservation PDR program. Both the FAA and the State of New Jersey PDR programs provide payments to the airport owner in return for the legal obligation to keep the airport open as a public-use airport, in perpetuity. Although the FAA and the State of New Jersey programs are similar, the programs have significant technical differences which are continuing to evolve over time. The FAA program is a national demonstration program and is funded through the FAA’s airport aid program. The State of New Jersey program is applicable only in New Jersey and is funded through the State’s Airport Safety Fund and the NJ Transportation Trust fund. Airport par- ticipation in either the FAA PDR program or the State of New Jersey PDR program is contingent

Select Long-Term Airport Preservation Strategies and Mechanisms 43 on successful competitive application to the FAA or the State of New Jersey and the availability of PDR funding. Public-use airports preserved using the PDR process include • Lincoln Park Airport in Lincoln Park Borough, NJ (PDR cost on the order of $4+ million). 15 • Central Jersey Regional Airport in Manville Borough, NJ (PDR cost on the order of $4 million). 16 • Camden County Airport in Berlin Borough, NJ (PDR cost on the order of $250 thousand). 17 • Alexandria Field in Alexandria Township, NJ (PDR cost on the order of $1+ million). 18 • Santa Paula Airport near the City of Los Angeles, CA (PDR cost on the order of $5+ million). 19 In addition to the public-use airports preserved through the purchase of development rights listed above, the State of New Jersey also made offers to purchase development rights at Spitfire Airport, Oldmans Township; Blairstown Airport, Blairstown; and Sussex County Airport, Sussex. For various reasons the PDR action was not completed at these three airports. Does the PDR process require special legislation before it can be done? The answer to this question may vary substan- tially from jurisdiction to jurisdiction. Both the State of New Jersey and the FAA had special legislation authorizing their airport PDR programs. Alternatively, some legal authorities have opined that if a person or entity already has the legal authority to purchase real property outright (i.e., purchase all the rights and title to real property), it may be presumed that they could also have the legal authority to purchase just some (in lieu of all) or partial rights, of real property (i.e., such as the development rights). In fact, people and entities purchase partial property rights with some regularity. Such partial property rights include mineral rights, water rights, driveway easements, utility access, and timber rights. The position could be taken that if the above property rights can be sold and deed recorded without special legislation, than perhaps PDR might not require special legislation in said jurisdiction. 20 If a political jurisdiction were to decide to enact PDR legislation for airport PDR actions, it would be useful to know that the State of New Jersey has the most used airport PDR program and includes the following program provisions: 21 • The PDR purchase is done on a willing-seller/willing-buyer basis. • PDR is authorized only at public-use airports. • The PDR purchase must have specific and defined public purpose(s). • Advance legal notice is provided to impacted political jurisdictions. • There is a public notice and public hearing process. • PDR value is set through property appraisal and negotiation. • Property appraisal documents are considered open public records. • Property PDR restrictions run in perpetuity. • Property PDR restrictions are set by contract and recorded deed restriction. • PDR compensation is paid in dollars at time of contract and deed closing. By way of innovative PDR financing, a jurisdiction, person, or entity could, as appropriate and in lieu of a PDR compensation in dollars at time of closing, consider having a structured PDR compensation that could include • Structured future payments over time. • Future tax abatements by the taxing jurisdiction. • Tax increment financing. • On-site zoning and/or development density concessions. • Off-site zoning and/or development density concessions (i.e., transfer of development rights). • Property donations or swaps. The FAA only issued one PDR grant under its PDR demonstration pro- gram. The FAA did not consider this a successful demo program and the FAA proposed that it sunset at the end of federal FY07.

44 A Guidebook for the Preservation of Public-Use Airports Please be advised that no part of this section can or should be considered to be airport PDR program recommendations, legal advice, or interpretation of either the letter or intent of the FAA or State of New Jersey airport PDR programs. 22 Reference documents and information on both the FAA and State of New Jersey PDR programs are provided in the CD and the on-line appendices to this Guidebook as examples. The Guidebook appendices also list numerous farm- land, open-space, parkland, and historic property preservation reference books and documents which can also be of assistance to airport advocates interested in preserving public-use airports using PDR strategies and methods.