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Whats New In Airport Compliance ? Charles C. Erhard.

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Presentation on theme: "Whats New In Airport Compliance ? Charles C. Erhard."— Presentation transcript:

1 Whats New In Airport Compliance ? Charles C. Erhard

2 Residential Development On Federally Obligated Airports ?

3 Bring Housing on to the Airport???

4 Airport Home Complete with Hot-Tub!

5 Bring Housing on to the Airport??? Airport Homes = Future Access Restrictions

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

7 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

8 Balanced Approach in Evaluating Access Restrictions

9 Balancing the Federal and Local Interest

10 Balanced Approach Define the Noise Problem

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

12 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

13 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

14 Pre-selected Restriction by Aircraft Class or Type (Stage 2 Ban) Unjustly Discriminatory

15 Rule of Unintended Consequences Stage 2 Ban Sabreliner Out

16 Rule of Unintended Consequences Stage 2 Ban Mig 17 In

17 Rule of Unintended Consequences Stage 2 Ban A-3 In

18 Airport Real Estate Valuations

19 Fair Market Rent For The Developer Third Party Developed Facilities Fair Market Rent For The Developer

20 Financial Offer Airport Paid Greater of! Minimum Guaranteed Ground Rental OR Percentage Bid of Gross Rentals

21 Calculation of Minimum Guaranteed Ground Rental Appraisal of Site$5.00 per sq. ft. CAP Rate7% Ground Rental Rate$5.00 x 7% = $0.35 per sq. ft. Site Size400,000 sq. ft. Minimum Guarantee$140,000 per year

22 Rent for the Airports Facilities

23 Market or Cost Approach Rental

24 Third Party Developed Facilities Developer Facilities Revert to the Airport Beware of the Vice-President of Extensions

25 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?

26 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.

27 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?

28 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

29 Preserving Airport Rights and Powers What is wrong with this picture?

30 Airline Service Incentives Everyone Wants Low-cost Service

31 Sarasota Petition to Subsidize Airline Service

32 FAA Revenue Use Policy Prohibits a Subsidy with Airport Revenue

33 Threshold Question Is It An Operating Cost of the Airport or Community Economic Development

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