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What’s New In Airport Compliance ? Charles C. Erhard
What’s New In Airport Compliance ?
What’s New In Airport Compliance ?
Charles C. ErhardCharles C. Erhard
Residential Development On Federally Obligated Airports ?Residential Development On
Federally Obligated Airports ?
Bring Housing on to the Airport???
Airport HomeComplete with Hot-Tub!
Bring Housing on to the Airport???
•Airport Homes = Future Access Restrictions
Bring Housing on to the Airport???
•Airport Homes = Future Access Restrictions
•Airport Homes = Vehicle and Pedestrian Deviations
Bring Housing on to the Airport???
•Airport Homes = Future Access Restrictions
•Airport Homes = Vehicle and Pedestrian Deviations
•Airport Homes = Lost Credibility to Control Off-Airport Land Use
Balanced Approach in Evaluating Access Restrictions
Balanced Approach in Evaluating Access Restrictions
Balancing the Federal and LocalInterest
Balancing the Federal and LocalInterest
Balanced Approach
• Define the Noise Problem
Balanced Approach
• Define the Noise Problem• Identify Non-Restrictive Measures Sponsor Has
or Could Implement
Balanced Approach
• Define the Noise Problem• Identify Non-Restrictive Measures Sponsor Has
or Could Implement•Assess a Full Range of Non-Restrictive and Restrictive Measures
Balanced Approach
• Define the Noise Problem• Identify Non-Restrictive Measures Sponsor Has
or Could Implement•Assess a Full Range of Non-Restrictive and Restrictive Measures•Restrictions Are Last Resort Measures
Pre-selected Restriction by Aircraft Class or Type
(Stage 2 Ban)Unjustly Discriminatory
Pre-selected Restriction by Aircraft Class or Type
(Stage 2 Ban)Unjustly Discriminatory
Rule of Unintended Consequences Stage 2 Ban
Rule of Unintended Consequences Stage 2 Ban
Sabreliner “Out”
Rule of Unintended ConsequencesStage 2 Ban
Mig 17 “In”
Rule of Unintended Consequences Stage 2 Ban
A-3 “In”
Airport Real Estate ValuationsAirport Real Estate Valuations
Third Party Developed Facilities
Fair Market Rent For The DeveloperFair Market Rent For The Developer
Financial OfferAirport Paid Greater of!
Financial OfferAirport Paid Greater of!
Minimum Guaranteed Ground Rental OR
Percentage Bid of Gross Rentals
Calculation of MinimumGuaranteed Ground Rental
Calculation of MinimumGuaranteed Ground Rental
Appraisal of Site $5.00 per sq. ft.
CAP Rate 7%
Ground Rental Rate $5.00 x 7% = $0.35 per
sq. ft.
Site Size 400,000 sq. ft.
Minimum Guarantee $140,000 per year
Rent for the Airport’s FacilitiesRent for the Airport’s Facilities
Rent for the Airport’s FacilitiesRent for the Airport’s Facilities
• Market or Cost Approach Rental
Third Party Developed Facilities
Developer Facilities Revert to the Airport
“Beware of the Vice-President of Extensions”
The Airport’s Residual Interest Has Value
The Airport’s Residual Interest Has Value
Ground Lease Terms 30 years
Ground Lease Rent to Airport $140,000 per yr.
Remaining Useful Life After 30 years 20 years
Extend Ground Lease or Take Building?
The Airport’s Residual Interest Has Value
The Airport’s Residual Interest Has Value
Rentable Square Feet 250,000 sq. ft.
Rented Square Feet (occupancy) 200,000 sq. ft.
Full Service Rental Rate $15 per sq. ft./yr.
Gross Rental Income $3.0 million/yr.
The Airport’s Residual Interest Has Value
The Airport’s Residual Interest Has Value
Gross Rental Income $3.0 million per yr.
Operating Expense and Reserves $1.5 million per yr.
($6 per sq. ft./yr.)
Operating Income $1.5 million per yr.
Extend Ground Lease or Take Building?
The Airport’s Residual Interest Has Value
The Airport’s Residual Interest Has Value
Extend Ground Lease or Take Building?
Ground Lease ($140,000/yr.) Take Building ($1.5 million/yr.)
After 20 years ($2.8 million) After 20 years ($30 million)
A $27.2 million Decision
Preserving Airport Rights and Powers
What is wrong with this picture?
Airline Service Incentives Everyone Wants Low-cost Service
Airline Service Incentives Everyone Wants Low-cost Service
Sarasota Petition to Subsidize Airline Service
Sarasota Petition to Subsidize Airline Service
FAA Revenue Use Policy Prohibits a Subsidy with Airport Revenue
FAA Revenue Use Policy Prohibits a Subsidy with Airport Revenue
Threshold Question — Is It An Operating Cost of the Airport
or Community Economic Development
Threshold Question — Is It An Operating Cost of the Airport
or Community Economic Development
