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Home My Public Portal AboutFAAResponse Chandler GC #2Federal Aviation Administration Westem-Padfic R~ion Los Angeles AIrports Distrid Office 15000 Aviation Boulevard Lawndale. CA 90261 JUly .28, 2008 Greg Chenoweth AAE/CAE Airport Manager Chandler Municipal Airport 2380 S. Stinson Way Chandler, AZ 85249-1728 Re:Request for 'review of proposed Through-the-Fence (TTF agreements Dear Mr. Ghenoweth: This is in response to your letter dated June 30,2008, request for review of proposed TTF agreements at Chandler Municipal Airport, Arizona. The following are FAA's input and comments on the proposals: 1. The term of the Access Agreement and Lease Agreement According to the proposals, the term of the lease is 40 years with four la-year options. This will equate to SO-year lease. According to current FAA policy, SO-year term lease is excessive and beyond wh~t is acceptable. FAA policy has established 50-year term lease as the maximum term that will allow Developers to amortize the investment and produce good profit. FAA would object to the SO-year term lease and recommend the City of Chandler (City) to shorten it to a maximum of 50-year term lease. 2.Remedy to Cure a Breach of Access Agreement The City has a right to withdraw, suspend, or deny access to the airport. However, the City will give notice to the Thru-the-Fence Association of the suspension/denial, where upon the Association will use its "best efforts" to take "reasonable steps" to prevent such person from using the airport taxiway system and from entering the airPort TTF entrance. FAA recommends the City must reserve the right to impose and enforce penalties. on the Association and its members if the members violate the Access Agreement. The Association should be adyised that the City should be the entity that issues violations and enforces penalties upon the ASsociation and/or its members. 3.Lease of airport land to the TTF leaseholder (Developer) It appears that the TTF Developer is the same entity that leases the airport land, about 3 acres, from the City. We are not clear of why the City is leasing the airport land and TTF lease to the same entity and what kind of improvements and activities will be allowed on theleased airport property. . . U.S. Department of Transportation Federal Aviation Administration 2 FAA would like to know what kind of improvements and activitie~ Developer plans to do on the airport land. 4 Signs The lease agreement contains a provision controlling the installation of signs on the leasehold property. This is common lease provision'. Its purpose is to control and prevent the installation of unwanted or unsightly signs on leasehold property. In case the Developer will be constructing a connecting taxiway/taxilane onto airport property, the taxiway/ taxilane signs 'will have to conform to FAA sign standards. FAA recommends the City includes lease provision for signs installed by the Developer complied with FAA standards. 5. Enclosed is the Western Pacific Region Policy Guidance pn "Thru-the- Fence Airport Access'" for your information. - - If you have any questions, please contact me 310-725-3617. Sincerely, Kimchi Hoang Program Manager Enclosure cc (via email w/o encl): AWP-620 (Tony Garcia), AOOT (Tammy Martelle' Policy Guidance Through-the-Fence Airport Access (An Intrusion on Proprietary Power) There are instances when the owner of a public airport proposes to enter into an agreement that permits access to the public landing area by aircraft based on land adjacent to, but not part of, the airport property. This type of an arrangement is commonly called a tbrough-the-fence operation, whether the perimeter fence is imaginary or real. It is Federal Aviation Administration (FAA) policy to discom-age tbrough-the-fence agreements, and even oppose them if they are clearly detrimental to an airport's interests or prevent the airport owner from complying with federal obligations. Th~ obligation to make an airport available for the use and benefit of the public does pot impose any requirement to permit access by aircraft from adjacent property. On the contrary, the existence of such an arrangement has been recognized as an encumbrance upon the airport property itself. Airport obligations arising from federal grant agreements and conveyance instruments apply to dedicated airport land and facilities and not to private property adjacent to the airport, even when the property owner is granted a through-the-fence privilege. To protect the airport owner's rights and powers and to fulfill grant assurance obligatiQns, the airport sponsor should retain a legal right to require the off-site property owner and/or occupants to conform in all respects to the requirements of the grant agreements. The owner of a public ailport is entitled to seek recovery of the initial and continuing costs of providing a public use landing area. The owners of airports receiving federal funds have been required to establish a fee and rental structure designed to make the airports as self-sustaining as possible. Most public airports seek to recover a substantial part of airfield operating costs indirectly through various arrangements affecting commercial activitie$ ~ the airport. The development of aeronaUtical businesses on land uncontrolled by the airport owner may give them a competitive advantage that will be detrimental to the on-airport operators on whom the ailport owner relies for revenue and service to the public. To avoid a potential imbalance, the airport owner mav refuse to authorize a through-the-fence operation. If one already exists, and to equalize ail imbalance, the airport owner should obtain a fair return from off-airport operators in exchange for continuing access to the airport and use of the landing area. Although airports do not need. and should avoid through-the-fence arrangements, circumstances may arise which compel an airport owner to contemplate a through-the- fence operation. In this situation, the airport owner must plan ahead to formulate a prudent tbrough-the-fence agreement and obtain just compensation for granting access to the airport because the airport is enfranchising a special class of airport users who will be permitted to exercise an exclusive through-the-fence privilege. In making airport facilities available for public use, the airport owner must make the airport as self-sustaining as possible under the particular circumstances at the airport. The FAA has interpreted the self-sustaining assurance to require airport owners to charge fair market value (FMV) commercial rates for nonaeronautical uses of the airport. In conformity with the self-sustaining principle, it would be appropriate to charge FMV rates to off-airport users for the exclusive privilege of having private access to the airport. A through-the-fence agreement should include provisions making the access agreement and operations under the agreement subject to the same federal requirements and obligations as tenants on airport property. In formulating a through-the-fence agreement, the airport owner should endeavor to establish teIDlS that are beneficial to the airport. Negotiations should be conducted from the perspective that the airport does not need through the fence. It is the private property owner that covets the privilege and who must compensate the airport for the privilege. For example, the adjacent developer or landowner should be made to finance the necessary improvements and maintenance of the facilities and infrastructtn'e connecting the adjacent land to the airport's landing area. Rates and charges may be based on use rather than on flat rates and should contain a provision for rate increases. Access agreements can take the' form of short-term revocable pemlits or licenses. They should not be transferable, issued in perpetuity or in fee simple with a deed. Agreements should contain provisions allowing the airport to terminate the through-the-fence access privilege for cause. In addition, the airport owner must restrict the uses that may be made of the adjacent land as a condition for granting a through-the-fence privilege. Private property owners must be asked to enter into agreements that prohibit public aeronautical commercial operatiens. Simply stated, they should not be allowed to operate as fixed based operators (FHO) offering aeronautical services to the public. Such FHO operations, if allowed, would give private property operators an advantage over on-airport operators. Allowing private property owners to gain a competitive advantage will jeopardize the economic vitality of the airport and impede its ability to remain self-sustaining. Additionally, any economic advantage gained by adjacent property owners will diminish the eConomic viability of the airport's own aeronautical commercial operators. Arrangements that permit aircraft to gain access to a public landing area from off-site property introduce safety considerations along with additional hazards that complicate the control of vehicular and aircraft 1raffic. Airport improvements designed to accommodate access to the airport and landing areas from aD off-site location for the sole benefit and convenience of an off-airport neighbor present a substantial and continuing burden to the airport owner. In additio~ the airport must contend with legal, insurance, and management implications represented by increased costs, liability, and administrative and operational controls. For the airport owner, it may become an unexpected challenge to balance airport needs with the increasing demands on the airport by off-airport users. It is FAA policy to strongly discourage any agreement that grants acCess to public landing areas by aircraft normally stored on adjacent property. Airport owners must guard against any through-the-fence operation that can become detrimental to the airport and threaten its economic viability. Any agreement for' a through-the-fence operation must include provisions making such operations subject to the same federal obligations as tenants on aiIport property. Furthermore, the airport owner must ensure that the through-the-fence operators contribute a fair share toward the cost of the operation, maintenance, and improvement of the airport and that they do not gain an unfair economic advantage over on-airport operators. Any airport contemplating a through-the-fence permit is strongly encouraged to submit the proposal to the FAA for review and comment prior to executing any agreement. Compliance Requirements: Assurance 5. Riflhts and Powers An ajI;port sponsOt must maintain sufficient proprietary power to ensure it can control airport access and enforce thru-the-fence requirements. To reduce airport liability, an airport sponsor should obtain an avigation easement from the thru-the-fence operator in order to protect the airport. ~surance 19. Ooeration and Maintenance An airport sponsor must maintain the airport in a safe and serviceable condition at all time. Therefore, the airport sponsor must be able to ensure that operators entering the airport tbru-the-fence comply with all airport rules and regulations in order to maintain airport safety, security, and efficiency. Assurance 24. Fee and Rental Structure An airport sponsor must establish rates and fees that will make the airport as seIf- sustaining as possible. The rate setting methodology should establish reasonable rates for aeronautical activities. Non-aeronautical activities must be made to pay fair market value for the use of airport land. The non-aeronautical rate also applies to thru-the-fence operators, even if they conduct some kind of aviation-related activity on their property. Thru-the-fence is a special privilege that represents an encumbrance on the airport owners rights. Thru-the-fence operators do-not have any grant assurance protections. Therefore, they must pay fair market value for the privilege of acquiring a private, exclusive privilege. Assurance 29. Airoort £avow Plan An Airport sponsor must update the ALP to show where the tbru-the-fence access hasbeen created on airport property. . -