DEVELOPMENT Wisconsin Airports Conference May 6, 2019 Presented - - PowerPoint PPT Presentation

NON-AERONAUTICAL DEVELOPMENT

Wisconsin Airports Conference May 6, 2019

Presented by: Stephanie Ward, AICP Manager, Aviation Planning Mead & 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

• utside 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

• bligations.
• 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?

Thank you!

Questions?

Stephanie A. D. Ward, AICP Stephanie.Ward@meadhunt.com 517-908-3121