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 • Airport Strategic Business Plan/Budgeting • Management Structure/Reporting 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 • Surrounding Land Use (With or Without Airport Master Plan) • • 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 The following categories should be included in the assessment: • • 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 • Project Team Components Opportunities • • 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
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
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