Operators Seeking to Close Airports Navigate Difficult Regulatory Shoals

The permanent closure or “deactivation” of an underutilized public use airport has gained increasing traction among revenue starved airport sponsors, as well as disparate responses from affected parties.  Operators seek to save the drain on diminishing budgets; residential communities surrounding the airport hope for relief from the airport’s impacts; and the pilot community sees its access to the dwindling number of general aviation facilities shrinking further.  Whatever the rationale, the operator seeking to close and reuse an airport for non-aviation purposes, that has at any time accepted funds from the Federal Aviation Administration (“FAA”), faces substantial regulatory hurdles and complex procedural requirements.

First, closure of an airport requires a “release” from Federal grant obligations.  A “release” “is defined as the formal written authorization discharging and relinquishing the FAA’s right to enforce an airport’s contractual obligations,” FAA Order 5190.6B, § 22.2 (all references will be to FAA Order 5190.6B).  These may either be a release from a particular grant assurance or Federal contractual obligation, or may affirmatively permit disposal of some or all of the airport’s property, § 22.2.  The airport sponsor’s obligation to the FAA for personal property ends with the physical useful life of the property.  However, airport land acquired with Federal funds is federally obligated in perpetuity, § 22.3.

In considering whether to grant a release, the FAA will generally determine whether the release, including that of an entire airport, will have the “potential to protect, advance or benefit the public interest in aviation,” § 22.4.a.  More specifically, it will determine: “(1) the reasonableness and practicality of the sponsor’s request; (2) the effect of the request on needed aeronautical facilities; (3) the net benefit to civil aviation; (4) the compatibility of the proposals with needs of civil aviation,” § 22.4.a(1)-(4). 

The standards imposed also differ markedly for the disposal of personal and real property.  While the FAA may grant a release that permits the sponsor to abandon, demolish, or convert the personal property before its useful life expires, it will do so only when one of the following applies: (1) the facility is no longer needed for the purpose for which it was developed; (2) normal maintenance will no longer sustain the facility’s serviceability; or (3) the facility requires major reconstruction, rehabilitation, or repair, § 22.15.b.  The FAA may require the sponsor, as a condition of the release, to reimburse the Federal government or reinvest in an improved Airport Improvement Program (“AIP”) eligible project, § 22.15.d. 

The standards for releasing real property are far more restrictive.  FAA consent “shall be granted only if it is determined that the property is not needed for present or foreseeable public airport purposes,” § 22.16.  Most notably, the airport account must receive fair market value compensation for all deletions of airport real property from the airport even if the sponsor does not sell the property or sells the property below fair market value, § 22.16.  In addition, a total release permitting sale or disposal of federally obligated land must specify that the sponsor is obligated to include in any conveyance of a property interest a reservation assuring the continued right of flight and the ability to cause aircraft noise at unlimited levels over the land released, § 22.16.a.  Moreover, the conveyance must also “(1) prohibit the erection of structures or growth of natural objects that would constitute an obstruction to air navigation; [and] (2) prohibit any activity on the land that would interfere with or be a hazard to the flight of aircraft over the land or to and from the airport, or that interferes with air navigation and communications facilities serving the airport,” § 22.16. 

Finally, the requirements of release for the sale or disposal of real property differ according to the date of the Federal grant.  If no grant was received after December 30, 1987, “a sponsor’s request [for release] must assure that the Federal government shall be reimbursed or the Federal share of the net proceeds will be reinvested (a) in the airport, (b) in a replacement airport, or (c) in another operating airport,” § 22.19.a(1).  Where a grant was received after December 30, 1987 for land other than for noise compatibility purposes, an airport sponsor must dispose of the land at fair market value and deposit the Federal share of the sales proceeds into the Trust Fund, § 22.19.b(1).  In other words, for an airport that has received a grant after December 30, 1987, the flexibility on the disposition of any sales proceeds is eliminated. 

Whether an airport can be closed and/or transferred for non-aviation purposes depends almost entirely on the discretion of the FAA Associate Administrator for Airports whose discretion may not be delegated, § 22.20.  It is, therefore, critically important to follow all the procedural steps in obtaining a release, as well as the substantive requirements discussed here.  It should also be noted that where an airport was acquired as Federal surplus property from the military, different and even more restrictive regulation of transfer may exist.
 

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