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OCR for page 52
52 FIGURE 42 Sample vacancy-risk graph. FINANCING ADAPTIVE REUSE airport level. Further research is needed to calibrate the extent of the problem and to develop a risk management strategy that The financing of adaptive reuse (or demolition) of aeronauti- would help airports identify properties at risk and pursue an cal property is an area of uncharted public policy. The FAA exit plan to reuse or dispose of the property. This research grant programs address demolition and reuse primarily in would include development of a toolbox of strategies for air- conjunction with new capital projects. In the instance of a port property managers that addresses the following issues: mature or contracting industry, there appear to be fewer options for the financing of reuse or demolition except as an Lease provisions that protect the airport in the event operating cost. The model for who pays does not lend itself of tenant bankruptcies or sudden termination of lease, to reuse, and it is important that the cost of demolition be Letters of credit naming the airport as sole beneficiary tied to redevelopment of the site if it is to be funded by AIP. (and enforcement of provisions over time) to guaran- This leaves instances where redevelopment is not needed tee that funds are available for reuse or demolition of currently and airports need to shoulder the operating costs a property, to maintain a building and keep it safe. Analysis of the tradeoffs (pros and cons) between higher rent and end of lease security provisions, Risk assessment methods for airport properties and/ FURTHER RESEARCH or tenants, Exit strategies, With consolidation of airlines, air cargo carriers, and air ser- Worksheets to evaluate the cost of maintaining a vacant vice routes, the trend suggests that some airports will con- or underutilized property over time versus demolition, tinue to experience a surplus of aeronautical land and require Environmental and safety considerations for vacant funding to dispose of vacant or obsolete buildings and to and underutilized properties, and secure the airfield. This synthesis scratched the surface of a Financing sources for demolition in the event that air- very large topic not widely reported beyond the individual port operating funds (and AIP) are unavailable.