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NON-AERONAUTICALDEVELOPMENT
Wisconsin Airports Conference
May 6, 2019
Presented by:Stephanie Ward, AICPManager, Aviation PlanningMead & Hunt
Everyone is Looking for Alternative Funds
Insufficient revenue streams have been a contributing factor in
the decline of U.S. public-use airports over the past decades. (Finding from ACRP Report 44 – Guidebook for the Preservation of Public-Use Airports )
Presentation Outline
• What is non-aeronautical development?
• Evaluating your options
• Land Releases
• Summary
• Questions
What is Non-Aeronautical Development?
Any development that doesn’t need the runway to exist.
Three Key Questions
• Should we do this?
• Where could we do this?
• How do we do this?
• Follow up questions:− Who is “we”?
• Airport• Private Developer• Other
− What is “this”?• What type of development
Key Documents – Exhibit A Property Map & Airport Layout Plans
Legal Considerations
• Federally obligated airports
• Grant Assurances
• Surplus Property
• Zoning and other property and leasing laws
• Insurance and liability
• Other federal or state agencies
Three Step Process
• Airport Self-Assessment
• Site Evaluation
• Implementation
Airport Self-Assessment
• Baseline to gauge the feasibility and implementation of real estate development
• Investigate planning, business and financial status and needs/motivation for pursuing development
Airport Self-Assessment Considerations
The following categories should be included in the assessment:
• Airport Ownership • Business Trends and Projections
• Management Structure/Reporting • Airport Strategic Business Plan/Budgeting
Process
• FAA Grant Obligations • Risk Tolerance for Development Projects
• Airport Layout Plan and Master Plan • Development Goals
• Funds for Development • Community Context
• Airport Business Segments • Important Conclusions
• Dominant Industry or Company
Site Evaluation
• Analyze the attributes of the land under consideration for commercial development
• Assess property from a real estate perspective, reviewing important considerations for the feasibility of a commercial project
Site Evaluation Considerations
The following categories should be included in the assessment:
• Airport Layout Plan (ALP) Status
(With or Without Airport Master Plan)• Surrounding Land Use
• Land Availability • Regulatory Constraints/Permitting
• Location and Access • Market Conditions
• Infrastructure – Sanitary Sewer Systems • Workforce Attraction
• Infrastructure – Stormwater Systems • Local/Regional Context
• Infrastructure – Power/Telecom • Development Incentive Programs
Implementation
• Financial analysis, based on a preliminary plan, to project costs and revenue for the proposed development
• Path to create a refined development program and identify alternatives
Implementation Considerations
• Preliminary Development Plan • Outreach Portfolio
• Project Hard Costs • Revealing Project Plans to the Public
• Project Soft Costs • Permits and Approvals (in two parts)
• Funding Sources and Typical Revenue
Opportunities• Project Team Components
• Miscellaneous Revenue • Incentives
• Development Program Refinement • Funding and Financing
• Internal Project Management Structure • Development and Partnership Strategies
• Community Outreach Strategy • Marketing
• Identifying Stakeholders • Construction/Property Management
• Creating a Message
The following categories should be included in the assessment:
Consider
• Why are you doing the development?
• Where would you develop?
• Is that area “available” on your ALP?
• What do you have to offer – why the airport?
• Who is going to champion this effort?
• What is the cost?
• When would you undertake the development?
• How long will it take?
• How will it be: funded, constructed and managed?
Additional Information
ACRP Report 176
Generating Revenue from Commercial Development On or Adjacent to Airports
http://www.trb.org/Publications/Blurbs/176413.aspx
Key FAA Resources
• FAA Grant Assurances• # 4 - Good title
• # 5 - Preserving rights and powers
• #21 - Compatible land use
• #25 - Airport revenues
• #29 - Airport layout plan/Exhibit “A”
• #31 - Disposal of Land
• FAA Order 5190.6B• Airport Compliance Manual Chap. 22
• FAA Policy and Procedures Memo 5190.6• Guidance for Leases, Use Agreements and Land Releases
FAA’s Traditional Position
• Initial response is typically: NO
• Usually requires a Land Release
− Request Package must include:
• Fair Market Value Appraisal
• Boundary Survey
• Environmental Review
• Costly and time consuming
• Unable to move at the speed of private development
• Airports often can’t justify the cost to obtain the land release compared to the value obtained.
Options to Request FAA Approval
• Section 163 Request
• Land Release
• Concurrent Use
FAA Reauthorization Act of 2018 – Section 163
• Limits FAA’s authority to “directly or indirectly regulate” non-aeronautical property transactions at an airport, except:• to ensure the safe and efficient operation of aircraft or the safety of people and
property on the ground,• to ensure the receipt of fair market value for the use or disposal of property, or• where property was itself purchased with AIP grants or is subject to the Surplus
Property Act.
• Limits FAA’s authority to review and approve ALP amendments to only those that:• “materially impact” safety and efficiency for aircraft operations, • “adversely affect the value of prior Federal investments to a significant extent.”
- Summary from Kaplan Kirsch & Rockwell, LLP Airport Alert – October 8, 2018
• FAA still evaluating what this means for review/approval.
• FAA guidance is expected within 2 years.
Section 163 Request
• FAA HQ has set up a committee
• Requests to ADO who submits to the committee
• No specifics on “what” to include
• Could take up to a year on the request− If you have a specific deadline you can submit that deadline with the request
and they will try to do it.
• If a parcel is deemed to be under 163, then NEPA does not apply, however permitting and other special purpose laws that operate outside of NEPA still apply
Land Release – What is it?
• The formal, written authorization discharging and relinquishing the FAA’s right to enforce an airport’s contractual obligations.
• Applies to all property shown on:− Airport ALP, or
− Exhibit A Property Map
• Requires responses to 16 different items to provide a complete package
Land Release - Types
• Two basic types of land releases:− Release from aeronautical use:
• Airport retains ownership of land, but land is no longer required to be used for aeronautical purposes.
− Release and removal of dedicated property: • Airport sells land and is no longer responsible to maintain it as dedicated airport
property.
Land Release – Why & What
• Why/what is being requested?− Why is the request being made?
• (Excess property, non-contiguous property, etc.)
− What is being requested? • Ownership – Lease or sale,
• Use – aeronautical or non-aeronautical use
− What justifies the request for release?
− What use or disposition will be made of the property/facilities?
− Benefits of release compared to airport maintaining property in existing condition
Land Release – History of the Property
• What is the history of the property?− How did the airport originally acquire the property?
− What state or federal requirements need to be carried forward in any agreements?
− What specific property or facilities are involved?
− What is present condition of the property and current use?
− Federal surplus property and former military property are more complicated
Land Release – Defining the Release
• What property is being considered?− Boundary Descriptions
(metes and bounds description)
− Summary of facilities impacted
− Sketch of location
Land Release - Financial
• Financial Aspects− Fair Market Value of property (sale or lease rate)
• Requires a fair market value appraisal of the property
− What proceeds are expected and how will they be used?• Varies on type of release requested
• Capital improvements
• Operations and Maintenance
− Summary of intangible benefits• (existing revenues, future revenues, CIP)
Land Release - Environmental
• Environmental Aspects− Method and degree of documentation (CATEX or EA)
• Usually a CATEX is sufficient
• FAA SOP 5.0 has greatly increased the cost and time for a CATEX
− Environmental impacts of reuse options• This is why knowing the use is critical otherwise, you have to
make a lot of assumptions that can get complicated.
Land Release - Summary
• Land Release Package− Land Release Summary (core document)
• Responses to the 16 questions in narrative format
− Boundary Description
− Fair Market Value Appraisal
− Environmental Document
− Existing ALP
Concurrent Use – What is it?
• Use of dedicated airport property for a compatible non-aviation activity while at the same time the property serves the primary purpose for which it was acquired
• Examples:− Road right of way easements
− Utility easements
− Agricultural uses
(FAA Order 5190.6B for more information)
Concurrent Use Process – “Land Release Lite”
• Cover Letter from Sponsor explaining “why”
• Boundary description and copy of Exhibit A showing location of property
• Summary appraisal
• Draft copy of the lease agreement
• Copy of letter approving FAA Airspace Study
• National Environmental Policy Act (NEPA) Clearance
• Usually approved at the FAA ADO level
Key Takeaways for Land Releases
• Define what you want to accomplish• Documentation
− Locating/reviewing historical documents− Extent of environmental documentation necessary− Agreement language and duration
• Costs − Benefits of release vs cost to obtain release− Who pays for release and associated elements
• Timing− How early can you ask for release
• letter of intent vs actual release approval− Identified user− How long will FAA approval take – will a developer wait for
the process?
