Update Your Airport's Hangar Leases to Protect Against Non-Aeronautical Uses and Preserve AIP Funding

Under federal law, airport operators that have accepted federal grants or have obligations contained in property deeds for property transferred under laws such as the Surplus Property Act generally may use airport property only for aviation-related purposes unless otherwise approved by the FAA.  Specifically, the Airport and Airway Improvement Act of 1982 (AAIA) (Pub. L. 97–248), as amended and recodified at 49 United States Codes (U.S.C.) 47107(a)(1), and the contractual sponsor assurances require that the airport sponsor make the airport available for aviation use.  Grant Assurance 22, Economic Nondiscrimination, requires the sponsor to make the airport available on reasonable terms without unjust discrimination for aeronautical activities, including aviation services.  Grant Assurance 19, Operation and Maintenance, prohibits an airport sponsor from causing or permitting any activity that would interfere with use of airport property for airport purposes.  In some cases, sponsors who have received property transfers through surplus property and nonsurplus property agreements have similar federal obligations.

With increasing frequency, airports are allowing non-aeronautical storage or uses in hangars intended for aeronautical use, which the FAA has found to interfere with or entirely displace aeronautical use of the hangar.  Case in point: Car and Driver has recently featured articles about the superiority of airport hangars as “garages” for serious car enthusiasts.  This should be a red flag for airports, which stand to lose significant AIP funds for allowing on-airport hangars to lapse into non-aeronautical use.
 
There is only one solution to this problem, and it is something every federally-obligated airport should do to protect its AIP funds…

Airports should update their hangar leases (including ground leases) to add terms preventing the tenant from engaging in certain non-aeronautical activities and giving the airport leverage in the event that the tenant shifts away from aeronautical use of the hangar.  Conditions to limit non-aeronautical uses and prioritize aeronautical uses should be baked directly into the lease so that the airport can make a good-faith showing that the airport has taken adequate steps to prevent on-airport hangars from lapsing into non-aeronautical use.  There are several ways to accomplish this without immediately displacing current hangar tenants, including by negotiating a limited time for the tenant to engage in non-aeronautical uses (which the FAA will permit in certain situations) and by imposing restrictions that will result in early termination of the lease if an aeronautical tenant becomes a non-aeronautical tenant. 

Although the FAA allows airport sponsors a degree of flexibility in handling hangar tenants using their hangars for non-aeronautical purposes, airport sponsors should take steps as soon as possible to update their leases so that the airport has the power to remedy this issue when remedial action becomes necessary to comply with federal law and protect AIP funds.

Sustainable Airport Policies for Car Sharing and Ride Sharing Companies

“Disruption” has become the buzzword of the decade for technology startups.  Entrepreneurs take aim at existing markets every day with ideas designed to uproot and redefine their industries.  But some of the most innovative disrupters are having trouble bringing their ideas to a place where disruption is generally unwelcome: the airport.

Car sharing services such as Zipcar, Car2Go, and Getaround and ride sharing services such as UberX, Lyft, and Zimride are changing the game in ground transportation.  By using smartphone apps to connect drivers who have open seats in their vehicles with passengers who need rides, the ride sharing movement is reducing traffic and fuel usage.  Similarly, by planting a network of available cars throughout a city and allowing consumers to access the vehicles for a fee, car sharing makes it more practical for consumers to forego vehicle ownership altogether.  In 2014 alone, these companies have amassed hundreds of millions of dollars in venture capital financing.  Many consumers prefer these services to taxi cabs or other traditional methods of ground transportation because they are more convenient, affordable, and in some cases more environmentally friendly.  As with taxi cabs, airports are natural hubs of activity for car sharing and ride sharing services.

Notwithstanding the rising tidal wave of demand, most airports have yet to develop a workable approach to the unique legal and logistical challenges presented by car sharing and ride sharing services.  Instead, airports are prohibiting these companies from picking up or dropping off passengers at their terminals.  At a recent conference of in-house airport lawyers, several representatives from some of North America’s largest aviation hubs expressed serious concerns about these services.  One attendee suggested setting up “stings” by using the popular ride sharing apps to order rides from the airport and arresting the drivers for lack of taxi cab certification when they arrive.

However, non-airport regulators are beginning to appreciate that ride sharing services are not cab companies and should not be subject to the same regulations.  In September of 2013, California became the first state to provide a regulatory framework for Transportation Network Companies (“TNCs”), defined by the California Public Utilities Commission (“CPUC”) as any organization that “provides prearranged transportation services for compensation using an online-enabled application (app) or platform to connect passengers with drivers using their personal vehicles.”  (See CPUC Decision 13-09-045.)  The Illinois House of Representatives followed suit last week when it passed HB 4075, which seeks to implement a set of regulations specific to ride sharing services.

With mounting political and consumer support for car sharing and ride sharing, airports are under increased pressure to adopt policies regulating these services instead of prohibiting them.  Developing practical, sustainable policies that address issues such as airport congestion, service monitoring, and revenue sharing may prove to be a more profitable and efficient solution than denying airport access to car sharing and ride sharing companies.
 

Technological solutions such as geofencing may solve many of the problems related to airport regulation of TNCs because car sharing and ride sharing companies typically connect with consumers through smartphones.  Geofencing would allow airports to set up a virtual perimeter around the airport that would trigger a notification (and corresponding fee payment) every time a TNC driver arrives at the airport to pick up or drop off a passenger.  Additionally, airports could coordinate with car sharing companies to designate paid parking areas for vehicles within the car sharing network.  By tapping into the technological platforms TNCs have already developed, airports would have the benefit of adding streamlined sources of revenue without the burden of developing their own monitoring and networking solutions.

There is another reason why airports may want to take advantage of such innovative solutions rather than “killing the cow.”  The fact that airports are predominantly government entities means legal pressures could also play a significant role in the efforts by car sharing and ride sharing companies to break into the airport market.  Unlike private actors, government entities like airports owe constitutional rights to businesses.  Airports that maintain outright bans on car sharing and ride sharing services may face challenges under the Dormant Commerce Clause and the Equal Protection Clause of the Fourteenth Amendment, among other sources of law.  The federal statute 42 U.S.C. § 1983 provides litigants with a private right of action for damages resulting from a deprivation of federal constitutional or statutory rights.

Thus, airports may profit by shifting focus away from how to exclude car sharing and ride sharing services and towards how to include and regulate these companies.
 

Make No Mistake: The Supreme Court's Decision on Obamacare Has No Impact on Applicable Aviation and Airport Law

It has come to our attention that a legal colleague has authored a blog analogizing the United States Supreme Court’s recent decision upholding the Obama Administration’s health care legislation (“Obamacare”), National Federation of Independent Business, et al. v. Sebelius, et al., 567 U.S. ___ (2012), to the Federal statutes preempting state and local control of the regulation of aircraft operations and their free and open access to airports.  The blog attempts to make the case that, because the Court ruled that the Commerce Clause of the United States Constitution does not justify requiring all uninsured Americans to purchase health insurance, so the Commerce Clause somehow cannot justify exclusive Federal regulation of the “safety of navigable airspace,” 49 U.S.C. § 40103(a), and airlines “rates, routes and charges,” 49 U.S.C. § 41713(b)(1).  This analysis not only manifestly misapprehends the clear distinction between the two cases, but can also send a damaging message to those who justifiably seek legally supportable means of controlling airport impacts. 

Specifically, the argument that the decision on Obamacare somehow lends support to local regulation of airports turns the Sebelius decision on its head.  In the Obamacare decision, the Court held, regarding the universal mandate to purchase insurance, that the Commerce Clause could not be used as a pretext to force the uninsured, who have not chosen to voluntarily engage in interstate commerce through the purchase of health insurance, to engage in commerce involuntarily by mandating such a purchase. 

In the context of Federal regulation of airports, however, the Commerce Clause has been applied to ensure that voluntary entrants into interstate commerce, i.e., the airlines and passengers, will not be obstructed by a web of disparate local regulations.  In upholding this application of the Commerce Clause to voluntary entrants into the air transportation system, as it has done consistently since the passage of the Federal Aviation Act in 1958, 49 U.S.C. § 40101, et seq., as amended, the Court held:

“The Federal Aviation Act requires a delicate balance between safety and efficiency, [cite omitted], and the protection of persons on the ground. . . The interdependence of these factors requires a uniform and exclusive system of federal regulation if the congressional objectives underlying the Federal Aviation Act are to be fulfilled.” 

City of Burbank v. Lockheed Air Terminal, 411 U.S. 624, 638-639 (1973).

In fact, the airline/airport industry, which developed for the express purpose of facilitating business between states, and the United States and other countries (witness the impact of Lindbergh’s transatlantic flight in 1927), is the quintessential “voluntary” participant that our Founding Fathers authored the Commerce Clause to protect. 

In short, it is important to correct any false impression about the applicability of the Sebelius decision in the airline context, in order to save those readers looking for solutions to the widespread problem of airport impacts from wasting resources attempting to bring the national aviation system under local control.  Such time could be far better spent on the employment of other more effective strategies based on environmental and other statutes for working toward a better balance of commerce and its impacts.
 

California Airport Land Use Planning Handbook, October 2011, Hits the Streets

The California Airport Land Use Planning Handbook, October 2011 (“2011 Handbook”) was released this week. It supersedes the 2002 Handbook edition. The Handbook constitutes “guidance,” Cal. Pub. Util. Code § 21674.7, for Airport Land Use Commissions (“ALUCs”) in the determination of the scope of their jurisdiction over off-airport land uses as well as in the formulation of noise, overflight, safety and airspace protection policies, as mandated by Cal. Pub. Util. Code § 21670, et seq.

It is important to note at the outset, however, what a Handbook cannot do. First, it cannot grant to ALUCs the power to regulate airports, either in the air or on the ground. Those powers lie exclusively with the Federal Aviation Administration (“FAA”) and the local airport proprietor. Second, it cannot grant to ALUCs the final decision making power over off-airport land uses either. That power lies exclusively with local land use jurisdictions. What the Handbook can do is provide guidelines for the formulation of policies that bring to the attention of local land use policy makers the importance of “ensuring compatible land uses in the vicinity of . . . all new airport and in the vicinity of existing airports to the extent that the land in the vicinity of those airports is not already devoted to incompatible uses.” Cal. Pub. Util. Code § 21674(a).

As the 2011 Handbook’s girth exceeds 400 pages, and was issued only this week, the specific ways in which the 2011 Handbook addresses that charge will be the subject of a blog to appear shortly.
 

A New Technological Fix Hopes to Make Airport Noise a "Whisper"

Noise abatement procedures are only effective if they are used. Noise impacted communities are frequently heard to complain that, despite the complex, time consuming and expensive process needed to develop and implement noise abatement procedures at airports, either through the FAA’s Part 150 process, or through other airport specific processes, airlines seem to ignore them. The rationale often provided is that each airline is entitled to develop and implement its own flight procedures, some, but not all of which incorporate the specified noise abatement procedures. This situation was exacerbated in 1990 when the Airport Noise and Capacity Act, 49 U.S.C. § 47521, et seq., took noise abatement policy making out of the hands of local airports and placed approval authority exclusively in the hands of the FAA.

A deceptively simple solution to this pervasive problem of airlines non-uniform observance of airport specific noise abatement policies has been developed by a small, new company in Truckee, California, Whispertrack.
 

The concept behind the Whispertrack system is simple: to “give airports an intuitive, web based tool to manage and update their noise abatement procedures” (Esaassoc.com/Airports, Summer 2011 Aviation Rising), as well as to distribute the various noise abatement procedures to flight crews and aircraft operators throughout the entire national air transportation system.

 

The Whispertrack system distributes noise abatement procedures in much the same way as Instrument Flight Rule procedures are distributed today: through flight planning/dispatch services developed by companies such as Honeywell, Universal, flightplan.com, AIRNAV and others. In essence, Whispertrack establishes a technical process extending across all categories of noise abatement procedure, and is intended to transmit this information universally, so that noise abatement procedures developed painstakingly by cooperative processes between aircraft and airport operators, air traffic controllers, and communities won’t be ignored by failure to integrate them into the normal flight planning system.

Whether Whispertrack will remedy the frequent divergence of aircraft from established noise abatement procedures is yet to be established by the year old process. What is certain is that Whispertrack is a step toward eliminating the “nobody told me” defense that so often accompanies divergence from established noise abatement procedures, observance of which is so heavily relied upon by noise impacted communities.
 

CEQA and the Law of Unintended Consequences

On September 27, 2011, Governor Jerry Brown signed into law Senate Bill 292 and Assembly Bill 900, both of which are aimed at expediting, or “fast-tracking,” the litigation of lawsuits brought under the California Environmental Quality Act, 42 U.S.C. § 4321 (“CEQA”). SB292 is basically an earmark that will “fast-track” CEQA challenges to the Farmer’s Field National Football League Stadium proposed for downtown Los Angeles, next to the Los Angeles Convention Center and Staples Center, by requiring that such challenges be brought directly in California Courts of Appeals and be heard within 175 days. AB900 reaches more widely, “fast-tracking” all projects costing $100 million or more.

The stated intentions of the Bills’ sponsors are, on their faces, noble ones --- to provide more job opportunities, and spur increased spending and attendant tax revenue for the State, matters which seem urgent in light of the State of California’s economy. The problems raised by the Bills are less immediate, but no less important.
 

It’s fairly obvious that these two Bills drill large holes in CEQA’s blanket of protection of the public from the environmental impacts, both short and long term, of large scale development projects. It’s equally obvious that the Bills were intended to insulate not merely the stadium, but also other specific projects, such as the California High Speed Rail Project, from the usually lengthy CEQA process.

What is less obvious is that the Bills could also “fast-track” every airport improvement and/or expansion project in the State of California. This is because airport improvement projects are extremely costly, often involving reconfiguration of the airfield, including demolition and realignment of runways and taxiways, as well as terminal and parking lot construction. Even a small part of these potential activities could add up to hundreds of millions of dollars. So far so good you may be saying, because that type of major construction adds up to lots of jobs and better transportation.

This is where that nasty law of unintended consequences sneaks in. Along with the “good” of increased employment and capacity comes usually major, and always long term, environmental consequences on large swaths of numerous local communities. Such impacts include increased air pollution, greatly increased noise over the numerous residential communities located around airports, and the ubiquitous traffic impacts on local communities. Unlike the “fast-tracking” of the essentially local stadium project and of surface transportation projects which run in confined, proscribed corridors, airport impacts cover widespread and often unpredictable areas and populations.

It is true that access to the courts has merely been attenuated, not eliminated. But the impact of sending a challenge directly to the Courts of Appeals is draconian. The only path of reconsideration or appeal from a decision of a Court of Appeals is to the California Supreme Court. Because that court only accepts for hearing about 5% of the cases that apply to it, the new legislation effectively gives challengers only one bite at the apple. Thus, the Bills constitute a radical change in a state where Courts of Appeals regularly revised lower court decisions under CEQA.

Finally, and added to the already existing burdens on the Appellate Court system, the 175 day rule (or less than six months) to fully adjudicate a CEQA action further constrains the ability of the Appellate Courts, used to dealing with legal questions, to try what are usually highly fact specific and sometimes scientifically complex environmental issues.

In short, SB292 and AB900 are bad precedent, even if for good reasons. Special interest legislation is never desirable (although frighteningly common), and special interest legislation, the global consequences of which have not been fully considered, is even less desirable. It can only be hoped that environmental groups such as the National Resources Defense Council, which supported both Bills, will be just a quick to aide citizens affected by the legislation to adjust to their new legal reality.
 

Ninth Circuit Calls FAA to Task on Environmental Impacts of New Runway

In what might be a surprising decision in any other Circuit, the United States Court of Appeals for the Ninth Circuit issued a ruling in Barnes v. U.S. Dept. of Transportation, United States Court of Appeals for the Ninth Circuit, Case No. 10-70718, August 25, 2011, which, while narrow, begins the process of eroding both the Federal Aviation Administration’s (“FAA”) long held position that “aviation activity . . . will increase at the same rate regardless of whether a new runway is built or not,” Barnes, at 16285, and the Federal Court’s traditional deference to it. City of Los Angeles v. FAA, 138 F.3d 806, 807-08, n. 2 (9th Cir. 1998).

In Barnes, petitioners challenge the FAA’s environmental review of the proposed addition of a runway at Hillsboro Airport (“HIO”), a general aviation reliever airport for Portland International Airport (“PDX”), operated by the Port of Portland, and located in the adjacent City of Hillsboro, Oregon (“Project”). Specifically, petitioners challenged, among other things, the FAA’s decision to prepare only an Environmental Assessment (“EA”) and Finding of No Significant Impact (“FONSI”) not a full Environmental Impact Statement (“EIS”), which petitioners claim was necessary due to the potential environmental impacts of increased demand for HIO resulting from the addition of the runway.

First, expressing a view in contradiction with that a number of other Circuits, the court took issue with FAA’s consistent argument that “[T]he project will not have growth inducing effects on aviation activity.” Barnes, at 16285. The court pointed to the absence of any analysis in the EA of the new runway’s growth-inducing impacts. “The agencies are unable to point to anything in the record showing that they in fact considered the possibility that expanding HIO would lead to increased demand and increased airport operations,” Barnes, at 16281. The court, therefore, relied on FAA’s statement in the administrative record that “a new runway is ‘the most effective capacity enhancing feature an airfield can provide.’” Barnes, at 16281. In the absence of hard analysis establishing the lack of growth inducing impact, the court declined to take FAA’s “word for it and not question their conclusory assertion in the EA that a new runway would not increase demand.” Barnes, at 16285.

Second, the court declined to grant the “significant deference that courts give aviation activity forecasts actually performed by the FAA.” Barnes, at 16285-86. While the court agreed that “when it comes to airport runways, it is not necessarily true that ‘if you build it they will come,’” Barnes, at 16286, quoting National Parks and Conservation Association v. United States Department of Transportation, 222 F.3d 677, 680 (9th Cir. 2000), it would not grant deference because FAA “failed to conduct a demand forecast based on three, rather than two, runways.” Barnes, at 16287.

The court, apparently realizing the groundbreaking nature of its decision, then proceeded to narrow the decision’s scope. It reconciled seemingly contradictory opinions in Seattle Community Federation v. FAA, 961 F.2d 829, 835 (9th Cir. 1992) [“[R]emand to the FAA was unnecessary although the FAA did not consider the impacts of an expected increase in air traffic after changes in flight patterns were implemented,” Barnes, at 16288], and Morongo Band of Mission Indians v. FAA, 161 F.3d 569, 580 (9th Cir. 1998), [“[T]he FAA did not have to consider the impacts of an increase in air traffic resulting from a new flight arrival path because ‘the project was implemented in order to deal with existing problems . . .’”, Barnes, at 16288]. The court rationalized that unlike the flight patterns and flight arrival path at issue in Morongo and Seattle Community Council Federation, “this case involves a major ground capacity expansion project.” Barnes, at 16288.

The court then went on to further narrow the definition of “major ground capacity expansion project” and, thus, its ruling, by excluding “terminal improvement project[s],” City of Los Angeles, supra, 138 F.3d at 808; taxiway construction, Town of Winthrop v. FAA, 535 F.3d 1, 5 (1st Cir. 2008); and “improvements to an existing runway,” City of Olmsted Falls, Ohio v. FAA, 292 F.3d 261, 272 (D.C. Cir. 2002).

In summary, the Ninth Circuit has carved out a new, exclusive niche for projects that include construction of additional runways, because “our cases have consistently noted that a new runway has a unique potential to spur demand which sets it apart from other airport improvements like changing flight paths, improving a terminal or adding a taxiway . . .” Barnes, at 16288. Therefore, in the case of a runway addition, “[E]ven if the stated purpose of the project is to increase safety and efficiency, the agencies must analyze the impacts of the increased demand attributable to the additional runway as growth inducing effects . . .” Barnes, at 16289.

While we believe the court may have drawn a bright line demarcation between types of “major ground capacity expansion projects” where none exists in reality, Barnes constitutes a significant step toward recognition of the full complement of airport expansion impacts often ignored in FAA’s environmental analyses.
 

Inland Empire's Economic Woes Remediable Through Local Control of Ontario International Airport

The Los Angeles Times reports that, while economic conditions are slowly improving throughout most of the nation, including most of California, California’s Inland Empire, comprised of Riverside and San Bernardino Counties is not so fortunate. The Times reports that the volume of home sales in San Bernardino County dropped 18.3% from last June, and in Riverside County 14.7%. Similarly, jobs fell throughout the Inland Empire in sectors such as leisure and hospitality (minus 3,200 jobs in June) and educational and health services (minus 1,300 positions in June). Finally, the region lost 3,900 construction jobs over the year, and more than 75,000 since the peak of construction in June, 2006.

As part of the solution to this ongoing problem, the City of Ontario and County of San Bernardino have joined together to negotiate a return of Ontario International Airport (“ONT”), operated by the City of Los Angeles through its Airport Department, L.A. World Airports (“LAWA”) since 1967, to local control. ONT has, consistent with the condition of the local economy, seen an approximate 30% decrease in operations since 2007.
 

Local control would be exercised through a joint powers agency comprised of the City of Ontario and San Bernardino County. The benefits of such an arrangement are manifest: (1) local control could eventually escape the onerous employee contractual requirements which burden Los Angeles and add substantially to airline costs; (2) local control could avoid the inherent conflict of interest which has inhibited LAWA from allowing airlines to divert to ONT rather than concentrating service at LAX, with consequent financial benefits to LAX and disbenefits to ONT in the form of lost landing, concession and other fees; (3) local control takes into account local needs, preferences and conditions, with historically greater success in attracting airline incumbents and passengers and stimulating airport development; and (4) with successful airport development, theory and practice amply demonstrate, comes economic development for the entire region.

Despite ONT’s downward spiral, the transfer of ONT to local control, and its consequent successful development, are opposed by the City of Los Angeles as an attempt to hijack a “valuable asset.” The irony is that what could have been a valuable asset has been debased under Los Angeles’ control. An answer to the woes of the region in general, and ONT in particular is clear – return ONT to local control where it will be understood and exploited to its full potential as a “valuable asset,” not just to Los Angeles alone, but to the entire Southern California region.
 

City of Los Angeles Opposes Legislative Efforts to Encourage Growth at Ontario

The City of Los Angeles (“Los Angeles”) went on record yet again, rebuffing a cooperative effort between the City of Ontario (“Ontario”) and County of San Bernardino (“San Bernardino”) to promote growth at Ontario International Airport (“ONT”). The Los Angeles City Council formally voted to oppose SB466, introduced earlier this year by Senator Bob Dutton, which would allow for structured negotiations regarding the transfer of ONT to a newly formed joint powers agency comprised of Ontario and San Bernardino. The rationale for the legislation is that ONT has proportionally suffered the worst loss of passengers and airline operations of any airport in the Southern California region, and that a shift to local control is needed to restart what had previously been considered the economic engine for the Inland Empire.

The transfer is also regarded by Petitioners in the case City of El Segundo, et al. v. City of Los Angeles, et al., Riverside County Superior Court Case No. RIC426822 as critical to the success of the “regionalization” provision of the Settlement Agreement in that action. Under the settlement, over which the Court still retains jurisdiction, Los Angeles’ Airport Department, L.A. World Airports (“LAWA”) is obligated to make its best efforts to divert passenger traffic to other Los Angeles owned airports throughout the region. Because ONT is the only Los Angeles owned airport with terminal and airfield facilities sufficient to accommodate substantial increases in commercial air traffic, a number of Petitioners have already taken formal positions in support of the transfer and the proposed legislation.

Ontario and San Bernardino have committed to continue their fight for local control of the valuable asset that ONT could be, if effectively managed.
 

California Airport Land Use Planning Handbook 2011 Update Delayed Again

The California Department of Transportation, Aviation Division (“Caltrans”) has announced yet another delay in the publication of the “California Airport Land Use Planning Handbook” (“Handbook”). The Handbook constitutes guidance for California’s airport land use commissions (“ALUC”) in the establishment of height, density and intensity restrictions for land uses around California airports. This delay continues and even increases the risk of conflict between ALUCs and local land use jurisdictions throughout California. 

ALUC restrictions are not the last word concerning land uses around airports, as local land use jurisdictions have final authority to approve or disapprove land uses within their own boundaries. However, ALUC restrictions can make it more difficult for a local jurisdiction to effectuate previously enacted development plans in the vicinity of an airport. This is because, to overcome the ALUC determination of inconsistency with ALUC restrictions, the local jurisdiction must overrule the ALUC by a two-thirds vote, a hurdle often difficult if not impossible to overcome because of fears of liability.

 

The last edition of the Handbook was published in 2002, and much has changed in the legal arena concerning restrictions on development around airports. For example, the 2002 Handbook recommends a condition on development requiring the dedication of “avigation easements” or the right of an aircraft to overfly property at any altitude or noise level without legal liability. However, the Oregon Supreme Court has recently ruled that the requirement for dedication of an avigation easement imposed by a land use jurisdiction that does not own an airport may constitute inverse condemnation, or the taking of private property without just compensation, prohibited by the Fifth Amendment to the United States Constitution. As many land use jurisdictions around California airports do not also sponsor and operate the airport in or near their jurisdiction, this ruling in Oregon takes on added significance in California. We look forward to a discussion in the 2011 Handbook update of the circumstances under which such dedication would be constitutionally permissible.

Similarly, the current version of the Handbook deals not only with the scope of ALUC jurisdiction, but also exceptions to that jurisdiction. One of those exceptions is for “existing uses.” While the Caltrans enabling legislation, Public Utilities Code section 21674(a), refers only to a limitation on “otherwise incompatible uses,” the 2002 Handbook has extended the exception to include not only existing bricks and mortar, but also uses for which there are “vested rights” such as development agreements and vesting tentative maps.

So far so good. But, inexplicably, after correctly evaluating recent case law on the concept of vested rights, the current Handbook goes on to say: “Thus, while an ALUC cannot force a change in land use once [a vested right] has been achieved, it can nevertheless require compliance with height restrictions, intensity limitations, noise level reduction, and other criteria set forth in its policies and implemented by local agencies.” This position is patently contrary to both the intent of the legislation and the clear guidance of the remainder of the Handbook. We hope that this and other such internal inconsistencies will be addressed and revised in the 2011 Handbook update.
 

 

Draft California Airport Land Use Planning Handbook Available for Review and Comment

It has come to our attention that the most recent revision of the California Airport Land Use Planning Handbook (Handbook) has just been released for public review and comment. The review period will end December 27, 2010.

 

 

The Handbook and the Airport Land Use Compatibility Plans (ALUCP) approved by many jurisdictions based on it, have a profound impact on development potential and cost. This is so because ALUCPs contain stringent development restrictions on projects within as much as six (6) miles of each publicly owned airport in California, independent of, and in addition to, the restrictions imposed by local land use jurisdictions within those areas. The only way to avoid such increased restriction is for the public entity to “overrule” the ALUC by a two-thirds (or four-fifths) vote which does not often happen. Absent such an “overrule,” the project, upon which a developer may already have expended significant resources, may have to be significantly down-sized or even abandoned.

Because new versions of the Handbook are typically published 10 years or more apart, any increased restrictions arising from the most recent version will have impacts on developments into the indefinite future, even if there is no currently impacted project pending. Therefore, Chevalier, Allen & Lichman strongly recommends that you file comments on the Handbook draft and thereby influence the final edition of the Handbook, or, in the alternative, ensure the right to a future challenge to the Handbook’s unreasonable development restrictions.

General Aviation Airport Security

Historically, General Aviation (GA) airports have not been subject to Federal rules governing airport security. Prior to September 11, 2001, the Federal government's role in airport security focused exclusively on airports serving scheduled operations. Following 9/11, Congress enacted the Aviation and Transportation Security Act (ATSA), which created the Transportation Security Administration (TSA). The TSA was established to develop, regulate and enforce security standards for all modes of transportation. In the ATSA, Congress transferred most of the Federal Aviation Administration’s (FAA) civil aviation security responsibilities to the TSA.

In May 2004, TSA published Information Publication A-001, Security Guidelines for General Aviation Airports (“Guidelines”). The Guidelines provide GA airport owners, sponsors and operators a set of security best practices and a method for determining when and where security enhancements would be appropriate. The Guidelines do not contain regulatory language, and do not require that GA airports meet the same security requirements as commercial airports. The Guidelines are not mandatory, and do not establish any criteria that must be met in order to qualify for Federal funds. (TSA does require GA facilities located within the Washington D.C. Airspace Defense Identification Zone Flight Restricted Zone to implement security measures.)

 

The Guidelines provide an “Airport Characteristics Measurement Tool” (ACMT) that can be used to assess security risks. The ACMT lists airport characteristics that potentially affect airport security in four major categories: (1) Airport Location; (2) Based Aircraft; (3) Runways; and (4) Operations. The Guidelines also contain a list of security enhancements that can be implemented depending on the ACMT results. Finally, the Guidelines include a list of recommendations for GA airport managers and operators to use to enhance airport security in six key areas: (1) Personnel; (2) Aircraft; (3) Airports and Facilities; (4) Surveillance; (5) Security Procedures; and (6) Communications; and Specialty Operations.

Because each GA airport is unique, owners, managers and operators must assess security risks and tailor appropriate security measures to their particular environment. The ability of GA airports to implement security measures varies. Unlike most commercial service airports, many GA airports are not self-sustaining. Therefore, the decision to implement security measures must include consideration of reasonableness and economic feasibility.

Update on the Federal Aviation Administration Airport Privatization Pilot Program

Many in the aviation community have been monitoring the progress of Chicago's efforts to privatize Midway International Airport (MDW) under the Federal Aviation Administration’s (FAA) Airport Privatization Pilot Program. The City faces a July 31, 2010 deadline to either select a private operator for MDW or seek an extension of the City’s slot in the Program from the FAA. Chicago is the only approved applicant for the Program’s only large-hub slot. If the application is approved, MDW would be the first privatized large-hub airport in the U.S. 

 

The Airport Privatization Pilot Program was established in 1996 by Section 149 of the Federal Aviation Administration Authorization Act, which added a new Section 47134 to Title 49 of the U.S. Code. Section 47134 authorizes the Secretary of Transportation and, through delegation, the FAA Administrator, to exempt a sponsor of a public use airport that has received Federal assistance from certain Federal requirements in connection with the privatization of the airport by sale or lease to a private party.

The Administrator may exempt the sponsor from some or all of the requirements to: (1) use airport revenues only for airport related purposes; (2) pay back a portion of Federal grants upon the sale of the airport; (3) return airport property deeded by the Federal Government upon transfer of the airport. The Administrator is also authorized to exempt the private purchaser or lessee from the requirement to use all airport revenue for airport related purposes, to the extent necessary to permit the purchaser or lessee to realize a profit from operation of the airport.

In establishing the Pilot Program, Congress also placed limitations on the number and types of airports eligible to participate. Section 47134(d)(1) provides that if the applications of five airports are approved, at least one must be a general aviation airport. Section 47134(d)(2) provides that no more than one of the airports approved may be a large-hub airport (an airport with more than one percent of revenue passenger boardings in the U. S. in the prior calendar year on an aircraft in service in air commerce, as defined in 49 U.S.C. section 47102(10)).

FAA final approval of a privatization application is based on a number of conditions, including the private operator’s ability to ensure continued access to the airport on reasonable terms, continued safe operations, ensure continued maintenance and improvements, adequate security, mitigation of noise and environmental impacts, and to provide for the continued operation of the airport in case of the private operator’s bankruptcy or other default. Privatization must be approved by at least 65% of the air carriers serving the airport and air carriers whose aircraft landing at the airport during the preceding calendar year had a total landed weight of at least 65% of the total landed weight of all aircraft landing at the airport during that year.

Since the Pilot Program was implemented, nine airports have applied for privatization. Five have withdrawn or terminated their application. The four active applicants are: MDW; Gwinnett County Briscoe Field (Lawrenceville, GA); Louis Armstrong New Orleans International Airport (LA); and Louis Munoz Marin International Airport (San Juan, PR). With the approval of Chicago’s preliminary application, all applications from other large-hub airports will be placed on a standby list. One slot remains available for a non-large-hub or general aviation airport.

FAA's Most Recent Forecast Sees Massive Increase in Passengers at Region's Airports

The Federal Aviation Administration's most recent forecast of future airline passengers at the region's airports is an eye opener. In the forecast year 2030, FAA is projecting 49.3 million enplanements (98.6 million total passengers) at Los Angeles International Airport; 3 million enplanements (6 million total passengers) at Ontario International Airport; and 6.6 million enplanements (13.2 million air passengers) for John Wayne Airport. This compares to current figures for LAX of approximately 58 million air passengers a year; Ontario, 4.5 million air passengers a year; and John Wayne Airport, 9.8 million air passengers a year.

Of course, 2030 is 20 years away and much can happen between now and then. Therefore, the real eye opener is the comparatively low projected growth of Ontario. Despite the fact that Ontario has new terminals, runways thousands of feet longer than those at John Wayne Airport, and convenient freeway access to all of the Inland Empire as well as northeast Orange County, FAA does not expect it to grow more than 33%, compared to John Wayne Airport’s 38% and LAX’s whopping approximately 60%.

FAA may have pulled the trigger too quickly, however. On May 10, 2010, the Los Angeles City Council approved a motion to study the transfer of Ontario International Airport to the control of the City of Ontario (control that shifted to Los Angeles in 1967). As the City of Ontario has a strong interest in growth of Ontario International Airport as an economic engine for the currently economically moribund Inland Empire, the jury is still out as to whether Ontario will steal those passengers FAA now projects for LAX and John Wayne Airport. Stay tuned.

Chevalier, Allen & Lichman, LLP Targets Park Ridge, Illinois Airport Noise Problem

On Monday, May 17, 2010, Chevalier, Allen & Lichman (“CA&L”) spoke to the City Council of the City of Park Ridge, Illinois, at its invitation, concerning Park Ridge’s dramatic and growing noise problem.

Park Ridge is located approximately two miles from the end of a new runway at O’Hare International Airport.  As a consequence of the runway’s recent opening, Park Ridge now experiences 400-500 operations per day at altitudes less than 1,000 feet with Single Event Noise Levels often in excess of 75 dB (a level considered dangerous by the FAA).  The noise affects elementary and high schools, as well as a substantial number of residences.

Recognizing both the severity of the problem and CA&L’s long experience in solving similar problems, the City Council sought CA&L’s views on the way in which legal action may be utilized to both compliment and supplement cooperative dialogue with the airport in finding innovative solutions to the daunting issues faced by Park Ridge.

To view CA&L's presentation, click here.

Airport Cooperative Research Program Publication Regarding "Enhancing Airport Land Use Compatibility"

On April 26, 2010, the Transportation Research Board published a three volume Airport Cooperative Research Program (“ACRP”) report on “Enhancing Airport Land Use Compatibility.”  The authors’ mandate was “to investigate and present the current breadth and depth of knowledge surrounding land uses around airports and to develop guidance to protect airports from incompatible land uses that impair current and future airport and aircraft operations and safety and constrain airport development.”  Report, Forward.  

It should be emphasized that this publication provides guidance only to local jurisdictions.  It is not regulatory, because the FAA cannot control land use planning in jurisdictions around airports.  As FAA has often acknowledged, land use planning is a purely local function.  If FAA were to presume to control land use planning off airport, it would also be subject to legal and constitutional constraints on land use planning such as the deprivation of a landowners’ reasonable use and enjoyment of property (“nuisance”) and/or the taking of property without just compensation (“inverse condemnation”), a result FAA wants to avoid at all costs.  

Consequently, research concerning land use planning around airports should include, and, in fact, be targeted at, local land use ordinances and regulations such as the airport land use planning statutes in California (Public Utilities Code § 21670, et seq.). 

Considering Closing an Airport? Be Careful! The FAA Has Set Many Pitfalls to Trap You.

 

Your local airport is becoming a drain on the local economy. Sure, it provides a few jobs, adds a certain cachet to the area and provides a hobby for the few people who can afford to purchase and maintain aircraft. But the annual expense of keeping the airport running – and running safely - is becoming more and more like a lead weight on your budget. “Let’s just close the thing,” you say. But wait, remember all that money you accepted from the FAA as part of the AIP grant program to lengthen the runway, pay for new taxiways, and purchase property? The FAA remembers. And before you can close the airport, there are many hurdles to clear set by the FAA to discourage the closure of airports.

1.            Take A Look At The Grant Assurances

First, take a look at the documents in your possession – the grant agreements you received from the FAA and signed as a condition of receiving the grants. As you are no doubt aware, under various Federal grant programs, you have agreed to assume certain statutorily defined obligations pertaining to the operation, use and maintenance of the Airport [49 U.S.C. § 47107(a)], that are described and implemented in FAA Order 5190.6B and memorialized in the application for Federal assistance as Grant Assurances, which become a part of the grant offer and bind the grant recipient contractually upon acceptance. 49 U.S.C. § 47107(a); FAA Order 5190.6B, “Guide To Sponsor Obligations” pp. 2-13 to 2-18.

 

 

The Grant Assurances primarily relevant to a proposed Airport closing or “deactivation” and reuse for non-aviation purposes are as follows. First, you, the airport sponsor, may not “sell, lease, encumber, or otherwise transfer or dispose of any part of its title or other interests in the property ... for the duration of the terms, conditions, and assurances in the grant agreement without approval by the Secretary [of Transportation].” See, e.g., Grant Assurance C.5.b. FAA regulations expand on this requirement. All of the land shown on Exhibit A to each grant constitutes the airport property obligated for compliance under the terms and covenants of the grant agreements. FAA Order 5190.6B. The airport sponsor is obligated to obtain FAA consent to delete any land so described and shown. Id. FAA consent shall be granted only if it is determined that the property is not needed for present or foreseeable public airport purposes. Id. Accordingly, if the airport sponsor’s Airport deactivation planning includes the sale, lease, encumbrance, or other transfer or disposition of its interests in the Federally obligated property, it: (1) must first obtain approval from the Secretary; by (2) establishing that the land to be alienated is no longer “needed” for public airport purposes.

Second, the airport sponsor is obligated to “suitably operate and maintain the airport and facilities. . . Any proposal to temporarily close the airport for nonaeronautical purposes must first be approved by the Secretary . . . [the Sponsor] will not cause or permit any activity or action thereon which would interfere with its use for airport purposes.” See, e.g., Grant Assurance C.19.a. This obligation to maintain the Airport includes the responsibility to operate the aeronautical facilities and common use areas for the benefit of the public. FAA Order 5190.6B, p. 2-15. Therefore, the airport sponsor “is more than a passive landlord of specialized real estate,” and has a continuing obligation to operate and maintain the Airport facilities. Id. For this reason, the airport sponsor may not cease to operate the airport prior to obtaining a release of its Grant Assurances from the FAA.

Third, “[f]or land purchased under a grant for airport development purposes (other than noise compatibility), [the airport sponsor] will, when the land is no longer needed for airport purposes, dispose of such land at fair market value or make available to the Secretary [of Transportation] an amount equal to the United States’ proportionate share of the fair market value of the land.” See, e.g., Grant Assurance 31.b.1. The United States’ share will either be reinvested in the national airport system or be deposited in the Aviation Trust Fund. Accordingly, the airport sponsor must either dispose of the land obtained with Federal grant funds at fair market value, paying a proportionate share to the Secretary, or make that proportionate share available to the United States without disposing of the property. Therefore, whether the airport sponsor chooses to dispose of the property purchased with Federal funds, maintain it for a public purpose other than aviation, or use it for non-public purposes, the airport sponsor must repay a proportionate share of the current fair market value of the land to the Federal government. There is no longer any limit on the duration of the terms, conditions, and assurances regarding real property acquired with Federal funds. [See, Grant Assurance B.1; FAA Order 5190.6B, p. 2-14] 

Federal regulations distinguish between the treatment of grants for the purchase of real property and those for airport development or improvement purposes. With respect to facilities developed or equipment obtained with Federal funds, the Assurances remain in effect for the useful life of the facilities developed or equipment acquired [See Grant Assurance B.1; FAA Order 5190.6B, p. 2-13], although this period may not exceed twenty (20) years from the date the grant offer was accepted. Id. 

In summary, deactivation of the Airport would require approval by the Secretary of Transportation and payment of the FAA’s proportionate share of the FMV of all real property acquired with Federal funds, as well as coordination with the FAA with respect to the disposition of grants made for airport development or improvement.

2.            Federal Regulations Allow the Release of the Airport Sponsor’s Obligations under the Grant Assurances.

Despite the seemingly unequivocal requirements of the Grant Assurances, the FAA has established procedures that allow the release, modification, reformation or amendment of airport agreements, including grant agreements, under certain prescribed circumstances. Specifically, “[w]ithin the specific authority conferred upon the Administrator by law, the FAA will, when requested, act to release, modify, reform, or amend any airport agreement to the extent that such action will protect, advance, or benefit the public interest in civil aviation.” FAA Order 5190.6B Section 22.31 (emphasis added). The FAA may grant relief from specific limitations or covenants of an agreement, or grant a complete and total release which authorizes the subsequent disposal of obligated airport property. Id. The FAA’s release may apply to specific facilities and parcels of land acquired with Federal assistance, which ultimately results in a partial airport closure, or disposal of an entire airport.

                a.            Deactivation, or Permanent Closure of the EntireAirport.

An airport sponsor may request the release of obligations for an entire airport. FAA Order 5190.6B, Section 22.20. ARP-1's concurrence is required before granting any release that would enable the disposal of an entire airport for non-aviation purposes. Moreover, each request to release an entire airport is considered by ARP-1 on a “case-by-case” basis without limitation to the guidance in FAA Order 5190.6B. In other words, the terms under which deactivation is allowed are expressly left to the complete discretion of ARP-1.

                                1.            Constraints on ARP-1' s Discretion.

Clearly, however, ARP-1's discretion is not unlimited. It will be guided, at least to some extent, not merely by the Grant Assurances, as set forth above, but also by applicable parallel Federal regulations and procedures. For example, where a release is sought to permit sale and disposal of land purchased with grant funds, apparently including deactivation, it must be demonstrated at minimum that (1) the land is no longer “needed” for airport purposes; and (2) the airport will repay that portion of the property’s FMV proportionate to the Federal Government’s share of the cost of the acquisition of such land, which sum is to be deposited in the Aviation Trust Fund. FAA Order 5190.6B, Section 22-19.

                                2.            Procedural Requirements.

Generally, the request for release must: (1) be in writing and signed by a duly authorized official of the airport owner [FAA Order 5190.6B, Section 22.23]; and (2) be specific, including the facts and circumstances justifying the request [FAA Order 5190.6B, Section 22.24]. The FAA will take into consideration factors such as: (1) the past and present owner’s compliance record under all its airport agreements and its actions to make available a safe and usable airport for maximum aeronautical use by the public; (2) evidence that the owner has taken or agreed to take all actions possible to correct noncompliance situations at the airport, if applicable; (3) the reasonableness and practicality of the owner’s request in terms of aeronautical facilities which are needed and the priority of need; (4) the net benefit to be derived by civil aviation and the compatibility of the proposal with the needs of civil aviation; and (5) consistency with the guidelines for specific types of releases. FAA Order 5190.6B, Section 22.27.

                                3.            Applicable Policy Determinations.

Moreover, the FAA must also make at least one of several policy determination, those potentially applicable here include that: (1) the public purpose which a term, condition, or covenant of an agreement, or the agreement itself, was intended to serve is no longer applicable; or (2) the release, modification, reformation, or amendment of an applicable agreement will not prevent accomplishment of the public purposes for which the airport or its facilities were obligated, and such action is necessary to protect or advance the interest of the United States in civil aviation; or (3) the release, modification, reformation or amendment will conform the rights and obligations of the owner to the statutes of the United States and the intent of Congress consistent with applicable law. FAA Order 5190.6B, Section 22.28.

                b.            Treatment of Airport Improvements Other than Land.

Finally, where a release is sought to abandon, demolish or convert grant-funded improvements, other than land, the FAA must find that: (1) the grant agreement involved has expired; or (2) the facility in question is no longer needed for the purpose for which it was developed; or (3) the useful life of the facility in question has expired

Despite the inherently discretionary nature of FAA regulations governing deactivation, it seems clear that, for real property they require, at a minimum: (1) repayment of a sum (some proportion of the current FMV of the real property purchased with FAA funds) which is substantially in excess of the original amount of the FAA Grants, but which can theoretically be obtained through resale or development of the Airport property; and (2) successful argument that the deactivation will benefit the National Air Transportation System, which can be based upon the substantial benefit to be derived from the airport sponsor’s deposit in the Aviation Trust Fund of the sum required to compensate the FAA for deactivation, which can then be used for the development and improvement of other airports in the system.

3.            Conclusion

The deactivation of an airport is not impossible, but it is tricky and complex due to the fact that most airports have accepted federal funds to keep the airport operating safely. This post should not be used as an exhaustive “how-to” on closing an airport, and it would behoove airport sponsors contemplating closure to consult with an attorney who is cognizant of the complex and often confusing regulations surrounding airports and grant assurances.

 

EPA Extends Public Comment Period for Effluent Guidelines and New Source Performance Standards for the Airport Deicing Category

On August 28, 2009 (74 FR 44676), EPA published a proposed rule entitled ‘‘Effluent Limitation Guidelines and New Source Performance Standards for the Airport Deicing Category; Proposed Rule.’’ Written comments on the proposed rulemaking were to be submitted to EPA on or before December 28, 2009 (a 120-day public comment period). Since publication, the Agency has received several requests for additional time to submit comments. EPA is extending the public comment period until February 26, 2010.