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71 Atlantaâs International Concourse E, Chicagoâs Midway Airport, and Chicago OâHareâs International Terminal 5 are examples of airports with common-use terminal facilities. In these examples, the airports contract with a third-party company that manages the facilities on behalf of the Airport in a third-party agreement. The regulations governing the tenant rules, policies, and procedures for use of the facilities may either be contained in the third-party agreement or set forth in a separate policy document. Ticket counters and gate holdroom areas are used by the airlines on a common-use or preferential-use basis. Other areas may be under exclusive leases (e.g., support offices and VIP lounges). Common-Use Terminal Equipment (CUTE) may be used under separate agreements or may be covered under provisions in the common-use regulations. Common-use agreements may also include fuel facilities. Critical issues in common-use management contracts are as follows: ⢠Parties to contract ⢠Term ⢠Scope of services ⢠Indemnity issues ⢠Ownership issues ⢠Resolution of disputes ⢠Compensation ⢠Rights and responsibilities of the parties ⢠Reporting 10.1 Parties to Contract The parties may include the airport, the airlines, and possibly a third-party management com- pany. If the agreement is between the airport and a third-party management company, the airlines may not be a party to the agreement, but subject to conditions of the agreement or sub- ject to common-use regulations that may be in a separate policy document. The terms of the air- line terminal lease or use agreement with the airport may contain provisions for common-use facilities as well. 10.2 Term Common-use terminal agreements tend to have shorter terms (i.e., 5 to 10 years) compared to longer terms (i.e., 10 years or more) for airline use agreements. C H A P T E R 1 0 Multiple-Use Facilities
10.3 Scope of Services The scope of services may apply to a third-party management agreement in a multiple-user terminal situation that is common use. This would define the duties of the management com- pany. At Chicagoâs Midway Airport, the scope was defined in an agreement with the Midway Airlinesâ Terminal Consortium (MATCO), which was created to provide the airportâs airlines with a single entity through which to participate in the design, construction, and management of the recently built main terminal building. See CRP-CD-81 (enclosed herein), Appendix to Chapter 10, Multiple-Use Facilities, for excerpts from the Midway MATCO Agreement defining the obligations of the operator and the standard of care. 10.4 Indemnity Issues It is important for the airport to have adequate indemnity provisions and insurance requirements satisfactory to the airportâs risk management and to ensure protection of the airport sponsor, pro- vision of adequate insurance levels, and detailed administration, reporting, and maintenance of these requirements. See CRP-CD-81 (enclosed herein), Appendix to Chapter 10, Multiple-Use Facilities, for excerpts from the Midway MATCO Agreement defining the indemnification obligations of the operator to the city, release of the city, and required insurance coverage. 10.5 Ownership Issues In most cases, the airport owns the facilities and there should be a provision clearly stating which party owns the facilities. See CRP-CD-81 (enclosed herein), Appendix to Chapter 10, Multiple-Use Facilities, for excerpts from the Midway MATCO Agreement defining title to replacement parts, components and equipment. 10.6 Resolution of Disputes The contract should indicate which stateâs governing law and court will apply in the event of dispute resolution. Some agreements may call for resolution through arbitration. In these cases, it is advisable to indicate as many details as practicable regarding arbitration (e.g., required experience of arbiter, location of arbitration meetings or hearings, and time frames in which arbitration will be accomplished) See CRP-CD-81 (enclosed herein), Appendix to Chapter 10, Multiple-Use Facilities, for excerpts from the Midway MATCO Agreement defining governing law and consent to service of process and jurisdiction. 10.7 Compensation Compensation provisions apply in contracts between management companies, such as third- party agreements like the MATCO agreement. These provisions should include detail pertaining to cost basis (as required), invoicing procedures, and payment terms. 72 Guidebook for Developing and Managing Airport Contracts
See CRP-CD-81 (enclosed herein), Appendix to Chapter 10, Multiple-Use Facilities, for excerpts from the Midway MATCO Agreement defining compensation for the operation and maintenance of the equipment and fuel system. 10.8 Rights and Responsibilities of the Parties The rights and responsibilities of each party to the agreement must be clearly identified in the contract. The MATCO agreement explicitly details not just the rights granted, but any conditions to the granted rights. It addresses matters such as easements and ingress/egress to ensure no con- flicts with any future agreements with other operators/managers that may require access to simi- lar facilities. Great care should be taken to address rights and conditions in all such contracts. See CRP-CD-81 (enclosed herein), Appendix to Chapter 10, Multiple-Use Facilities, for excerpts from the Midway MATCO Agreement defining the rights of the Consortium with respect to the equipment and fuel system and conditions to the grant of rights. 10.9 Reporting Each contract should contain regular reporting, specifying the format and frequency of reports. If possible, reporting provisions should be accompanied by sample formats and/or documents, which can be included as exhibits or appendices and changed by amendment if there are changes to standard forms used by the airport sponsor. See CRP-CD-81 (enclosed herein), Appendix to Chapter 10, Multiple-Use Facilities, for excerpts from the Midway MATCO Agreement outlining required reporting of the progress of the work and reports pertaining to the operation and maintenance of the equipment. Multiple-Use Facilities 73
