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Compliant Airport Leases: Guidelines and Regulations

This handbook provides comprehensive information on airport compliance, including guidelines for leases, grant assurances, rights and responsibilities of sponsors and users, and more. Written in an easy-to-read format with 23 chapters.

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Compliant Airport Leases: Guidelines and Regulations

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  1. Working at the airport is like being part of a dogsled team. If you ain’t the lead dog, the scenery never changes! apologies to Lewis Grizzard

  2. Compliant Airport Leases Hosted by: Bob Johnson GACS, Inc. GACS@cox.net

  3. So what were you expecting?

  4. Airport Compliance HandbookFAA Order 5190.6B(23 easy-to-read chapters)Airport Grant Assurances

  5. Airport Grant Assurances • The rights and responsibilities of the sponsors and users of federally obligated public-use airports are based on Federal law. • Airport sponsors make “binding” commit-ments to assure that the public’s interest in civil aviation will be served.

  6. So, what is a compliant lease? • Protects the Sponsor and the Government (FAA). • FAA Order 5190.6B Chapter 12 – 7 paragraphs. • Rights granted by contract. • Use of airport and public facilities in common with others. • Right to occupy and use designated facilities premises exclusively. • Commercial Privilege to offer goods and services.

  7. There’s more……? Oh yeah!..... • The FAA does not review all leases. • You do not need FAA approval to enter into an aeronautical lease agreement. • The type of agreement or document you use is the sole responsibility of the sponsor – you! • What is being leased? Aeronautical vs. Non-Aero. • Term: 30-35 years to retire tenant investment; 50 years is equivalent to a land sale. • Payment of fees – escalators - appraisals • Title to improvements: Does it vest to airport at some point in the future?

  8. Elvis is dead and I don’t feel so good myself!Noted Theologian and Sportswriter Lewis Grizzard…….1946-1994

  9. So, let’s take a look at a Compliant Lease. • Lease Agreement for Hangar vs. Land. • Term of Agreement = Tenant Investment • Leased Premises – What and how much • Privileges and Rights • Rental Fees and Charges • Escalator – CPI or something • Self Fueling

  10. Stay with me now! • Payments • Maintenance and care of the hangar • Inspection by Lessor • Governmental Requirements • Indemnity – Hold Sponsor Harmless

  11. More things to ponder! • Subordination - This Agreement shall be “subordinate” to the provisions of any existing and future agreements between Lessor and the United States of America…. • Reversion Clause - All improvements, including the Hangar, located on the Leased Premises at the expiration of this Agreement shall, without compensation to Lessee, be assigned and transferred to the Lessor.

  12. More Mumbo - Jumbo • Insurance – Is the Airport protected? • Notice of cancellation • Self-insurance • No insurance = No lease agreement • Aircraft Servicing and Fuel Storage • No Liability for exercise of powers • Airport rules and regulations

  13. Obamacare meets TSA….

  14. You’ve got to be kidding! • Assignment • Surrender of premises • Force Majuere • Cancellation by Lessor (Airport) • Cancellation by Lessee (Tenant)

  15. Home-stretch • Non Waiver of rights • Non-Discrimination • Economic Non-Discrimination • Subordination of Agreement • Notices • Prior Agreements • Assignment and sub-letting • Easements • Non-Aeronautical - FMV

  16. The FAA “Training” Center

  17. Section 20.5 Residential Development on Federally Obligated Airports • FAA airports district offices (ADOs) and regional airports divisions are responsible for ensuring that residential developments are not approved on federally funded airports.

  18. So how many Grant Assurances are there? 39

  19. Remember that old adage….

  20. Lest we forget…..

  21. A lesson in civics - 1967

  22. Political Correctness

  23. Grant Assurance 5 Preserving Rights and Powers • “...will not take or permit any action which would operate to deprive it of any of the rights and powers necessary to perform any or all of the terms, conditions, and assurances in the grant agreement without the written approval of the Secretary…..

  24. Grant Assurance 22a, Economic Non-discrimination • “…will make its airport available as an airport for public use on reasonable terms, and without unjust discrimination, to all types, kinds, and classes of aeronautical uses.”

  25. Grant Assurance 22h, Economic Non-discrimination • “...may establish such equal and not unjustly discriminatory conditions to be met by all users of the airportas may be necessary for the safe and efficient operation of the airport.”

  26. Grant Assurance 24, Fee and Rental Structure • “…maintain a fee and rental structure for the facilities and services at the airport which will make the airport as self-sustaining as possible ……”

  27. Grant Assurance 25, Airport Revenues • “All revenues generated by the airportand any local taxes on aviation fuel established after December 30, 1987, will be expended by the airport for the capital or operating costs of the airport.”

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