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What’s New In Airport Compliance ?. Charles C. Erhard. Residential Development On Federally Obligated Airports ?. Bring Housing on to the Airport???. Airport Home Complete with Hot-Tub!. Bring Housing on to the Airport??? Airport Homes = Future Access Restrictions.

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What s new in airport compliance
What’s New In Airport Compliance ?

Charles C. Erhard




Airport Home

Complete with Hot-Tub!




  • Bring Housing on to the Airport???

    • Airport Homes = Future Access Restrictions

    • Airport Homes = Vehicle and Pedestrian Deviations

    • Airport Homes = Lost Credibility to Control

    • Off-Airport Land Use





  • Balanced Approach

  • Define the Noise Problem

  • Identify Non-Restrictive Measures Sponsor Has or Could Implement


  • Balanced Approach

  • Define the Noise Problem

  • Identify Non-Restrictive Measures Sponsor Has or Could Implement

  • Assess a Full Range of Non-Restrictive and Restrictive Measures


  • Balanced Approach

  • Define the Noise Problem

  • Identify Non-Restrictive Measures Sponsor Has or Could Implement

  • Assess a Full Range of Non-Restrictive and Restrictive Measures

  • Restrictions Are Last Resort Measures


Pre selected restriction by aircraft class or type stage 2 ban unjustly discriminatory
Pre-selected Restriction by Aircraft Class or Type (Stage 2 Ban)Unjustly Discriminatory



Rule of Unintended Consequences

Stage 2 Ban

Mig 17 “In”




Third party developed facilities fair market rent for the developer
Third Party Developed FacilitiesFair Market Rent For The Developer


Financial offer airport paid greater of
Financial OfferAirport Paid Greater of!

Q Minimum Guaranteed Ground Rental OR

Q Percentage Bid of Gross Rentals


Calculation of minimum guaranteed ground rental
Calculation of MinimumGuaranteed Ground Rental

Appraisal of Site $5.00 per sq. ft.

CAP Rate 7%

Ground Rental Rate $5.00 x 7% = $0.35 per sq. ft.

Site Size 400,000 sq. ft.

Minimum Guarantee $140,000 per year



Rent for the airport s facilities1
Rent for the Airport’s Facilities

  • Market or Cost Approach Rental


Third Party Developed FacilitiesDeveloper Facilities Revert to the Airport“Beware of the Vice-President of Extensions”


The airport s residual interest has value
The Airport’s Residual Interest Has Value

Ground Lease Terms 30 years

Ground Lease Rent to Airport $140,000 per yr.

Remaining Useful Life After 30 years 20 years

Extend Ground Lease or Take Building?


The airport s residual interest has value1
The Airport’s Residual Interest Has Value

Rentable Square Feet 250,000 sq. ft.

Rented Square Feet (occupancy) 200,000 sq. ft.

Full Service Rental Rate $15 per sq. ft./yr.

Gross Rental Income $3.0 million/yr.


The airport s residual interest has value2
The Airport’s Residual Interest Has Value

Gross Rental Income $3.0 million per yr.

Operating Expense and Reserves $1.5 million per yr.

($6 per sq. ft./yr.)

Operating Income $1.5 million per yr.

Extend Ground Lease or Take Building?


The airport s residual interest has value3
The Airport’s Residual Interest Has Value

Extend Ground Lease or Take Building?

Ground Lease ($140,000/yr.) Take Building ($1.5 million/yr.)

After 20 years ($2.8 million) After 20 years ($30 million)

A $27.2 million Decision


Preserving Airport Rights and Powers

What is wrong with this picture?


Airline service incentives everyone wants low cost service
Airline Service Incentives Everyone Wants Low-cost Service




Threshold question is it an operating cost of the airport or community economic development
Threshold Question Revenue— Is It An Operating Cost of the Airportor Community Economic Development



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