What

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Whats New In Airport Compliance ?

• Charles C. Erhard

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Residential Development On Federally Obligated
Airports ?
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Bring Housing on to the Airport???
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Airport Home Complete with Hot-Tub!
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• Bring Housing on to the Airport???
• Airport Homes Future Access Restrictions

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• Bring Housing on to the Airport???
• Airport Homes Future Access Restrictions
• Airport Homes Vehicle and Pedestrian Deviations

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• 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

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Balanced Approach in Evaluating Access
Restrictions
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Balancing the Federal and LocalInterest
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• Balanced Approach
• Define the Noise Problem

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• Balanced Approach
• Define the Noise Problem
• Identify Non-Restrictive Measures Sponsor Has
  or Could Implement

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• 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

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• 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

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Pre-selected Restriction by Aircraft Class or
Type (Stage 2 Ban)Unjustly Discriminatory
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Rule of Unintended Consequences Stage 2 Ban
Sabreliner Out
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Rule of Unintended Consequences Stage 2 Ban
Mig 17 In
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Rule of Unintended Consequences Stage 2 Ban
A-3 In
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Airport Real Estate Valuations
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Third Party Developed FacilitiesFair Market
Rent For The Developer
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Financial OfferAirport Paid Greater of!

• Q Minimum Guaranteed Ground Rental OR
• Q Percentage Bid of Gross Rentals

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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

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Rent for the Airports Facilities
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Rent for the Airports Facilities

• Market or Cost Approach Rental

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Third Party Developed FacilitiesDeveloper
Facilities Revert to the AirportBeware of the
Vice-President of Extensions
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The Airports 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?
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The Airports 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.
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The Airports 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?
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The Airports 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
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Preserving Airport Rights and Powers What is
wrong with this picture?
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Airline Service Incentives Everyone Wants
Low-cost Service
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Sarasota Petition to Subsidize Airline Service
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FAA Revenue Use Policy Prohibits a Subsidy with
Airport Revenue
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Threshold Question Is It An Operating Cost of
the Airportor Community Economic Development
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(No Transcript)
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The Beauty of Flight