2. Working at the airport is like being part of a dogsled team. If you ain’t the lead dog, the scenery never changes! apologies to Lewis Grizzard

3. Compliant Airport Leases Hosted by: Bob Johnson GACS, Inc. GACS, Inc. GACS@cox.net GACS@cox.net

5. So what were you expecting?

9. The rights and responsibilities of the sponsors and users of federally obligated public-use airports are based on Federal law. Airport sponsors make “binding” commit- ments to assure that the public’s interest in civil aviation will be served.

11. So, what is a compliant lease? Protects the Sponsor and the Government (FAA). FAA Order 5190.6B Chapter 12 – 7 paragraphs. Rights granted by contract. Use of airport and public facilities in common with others. Right to occupy and use designated facilities premises exclusively. Commercial Privilege to offer goods and services.

12. There’s more……? Oh yeah!..... The FAA does not review all leases. You do not need FAA approval to enter into an aeronautical lease agreement. The type of agreement or document you use is the sole responsibility of the sponsor – you! What is being leased? Aeronautical vs. Non-Aero. Term: 30-35 years to retire tenant investment; 50 years is equivalent to a land sale. Payment of fees – escalators - appraisals Title to improvements: Does it vest to airport at some point in the future?

14. So, let’s take a look at a Compliant Lease. Lease Agreement for Hangar vs. Land. Term of Agreement = Tenant Investment Leased Premises – What and how much Privileges and Rights Rental Fees and Charges Escalator – CPI or something Self Fueling

15. Stay with me now! Payments Maintenance and care of the hangar Inspection by Lessor Governmental Requirements Indemnity – Hold Sponsor Harmless

16. More things to ponder! Subordination - This Agreement shall be “subordinate” to the provisions of any existing and future agreements between Lessor and the United States of America…. Reversion Clause - All improvements, including the Hangar, located on the Leased Premises at the expiration of this Agreement shall, without compensation to Lessee, be assigned and transferred to the Lessor.

17. More Mumbo - Jumbo Insurance – Is the Airport protected? Notice of cancellation Self-insurance No insurance = No lease agreement Aircraft Servicing and Fuel Storage No Liability for exercise of powers Airport rules and regulations

19. You’ve got to be kidding! Assignment Surrender of premises Force Majuere Cancellation by Lessor (Airport) Cancellation by Lessee (Tenant)

21. Home-stretch Non Waiver of rights Non-Discrimination Economic Non-Discrimination Subordination of Agreement Notices Prior Agreements Assignment and sub-letting Easements Non-Aeronautical - FMV

23. Section 20.5 Residential Development on Federally Obligated Airports FAA airports district offices (ADOs) and regional airports divisions are responsible for ensuring that residential developments are not approved on federally funded airports.

32. Grant Assurance 5 Preserving Rights and Powers “...will not take or permit any action which would operate to deprive it of any of the rights and powers necessary to perform any or all of the terms, conditions, and assurances in the grant agreement without the written approval of the Secretary…..

33. “…will make its airport available as an airport for public use on reasonable terms, and without unjust discrimination, to all types, kinds, and classes of aeronautical uses.”

34. “...may establish such equal and not unjustly discriminatory conditions to be met by all users of the airport as may be necessary for the safe and efficient operation of the airport.”

35. “… maintain a fee and rental structure for the facilities and services at the airport which will make the airport as self- sustaining as possible ……”

36. “All revenues generated by the airport and any local taxes on aviation fuel established after December 30, 1987, will be expended by the airport for the capital or operating costs of the airport.”