HomeMy WebLinkAbout1987-11-23 88-23 ORDER88-23
Introduced by Councilor Sullivan, November 23, 1987
CITY OF BANGOR
(TITLE.) (0rb¢r, Anthorxzxre..Asl? xgac;og to Federal Aviation.
acninistration Naleass of Title Restrictions - eanair Industrial Park
By the City Cean411 Of as City of8aapor:
ORDERED,
THAT
YAERt:19, by Council Order 86-416, adapted October 27, 1986 the City Council
authorized the staff to prepare an application to the Federal Aviation
Administration for purposes of releasing certain title restrictions on City-
camed ProEerty designated as Eanair Industrial Park; and
biE1Nl9, said Council Older requires ttat said application be approved in its
final form by the City Council,
NTN, THEREFORE, By the City Council Of the City Of Rammer be it
CdiPER®,
THAT the final foam of said application, a copy, of which is on file in
the office of tte City Clerk, is hereby approved; and be it further
THAT the City Manager is hereby autborizei and directed to take ull
necessary action, including the execution of all necessary, documents, for
purposes of filing said application with tne federal Aviation Administration
and for purposes of accepting the, release of title restrictions on lots in
B nair Industrial Park as described in said application.
y
In City Council Ibvaober 23,1987
Tabled and to be considered
next meeting. worksbw to M Mid
c�
Ci y Cle
IN CITY COUNCIL
December 14, 1987
Passed by the following yea and no
votes. Councilors voting yes:
Cox. England, Frankel, Sawyer.
Saxl and Sullivan. Councilors
voting no: Blanchette and Tilley.
Councilor absent: Shubert)
Wv�CLERKKK
In City Council Decasher 22,1987
reconsidered and consider
special meeting facyndgeor 28,1987
City Cler& r
89E23
OR ER
Title,
Authorizing AWlicatian to federal
Aviation administration releese
......................................
of title Restrictions 13anair
Industrial Park
In+zodSucednd fried by
Councilman
In special mating Oar 28,1987
cote for executive session
7 yes 2 no
voting yes lgl'ancheMe,Prankel,Sawyer,
3axl,ShuberL Sulliva,gTilley Voting N
Consider 2nd meeting January 4'
Vote 7 no 2 yes
voting Yes Frankel Tilley -
Voting No E]anGotte,Cox,England
Saxyer,Saxl,Shubert, Sullivan
Vote Bor passage 6 yes 3 no Voting
yes Cox,England,Sawyer,Saxl,Shubert,
Sullivan ping No B1anchette,Tilley., and Fr®ukel
�ity CLerx �(
r
England _
' Introduced by Councilor wheeler, Ceeaber 27, 1986
E CITY OF BANGOR
(TITLE.) @rb2r, Authorizing, Preparation of Application to Federal Aviation_
Administration: Felease of Table Restrictions
- Banair Industrial Park
By the City Council of as Citi ofBanyoz:
ORDERED,
THAT WsCsCAB, by deed from the united States of America the City
acquired title to most of the lard located within the boundaries of Banair
Industrial Park; and
VMEFFAS, said -deed restricts the ability of the Qty to
convey pareals of land within the Industrial Park W third parties; and
isifTwAs, the Qty staff has been advised by representatives
of the Federal Aviatim Administration that such restrictims may be released
provided the City retains sufficient controls to protect the aeronautical uses
of the Airport, and provided that the City establishes approved procedures for
the use of revenue fray the sales of such lots to meet future needs at the
Airport; and
HBERFAB, the Qty Oamcil, by adoption of this order,
determirse that the City must -be able to sell lots in Banair Industrial Park
in order to insure its complete and proper development,
NOW, THEREFORE, By ties City Council of tees City of BanpOr:
piddyi B, TnAT the City Msnager is hereby authori MA! and
directed to take all necessary action to prepare an application to tba Fsderal
Aviation Administration for the release of existing restrictions on the title
to the lots within Banair Industrial Park so as W permit their sale to third
parties; and be it further
oP➢EFEO, 'THAT said application shall not be submitted to the
Federal Aviatim Administration until approved in its final form by the City
Council.
Passed October 27,1986
CRI C16FC5 oRIt2
oANOOR. .MAIM
NOV 241987
A P:o, cor, nnan,
Attachment "B"
_'•[P'fYC��
(6i1g Bf ALartgpr, NT
LEGAL
Poben E. Miller
city Solicitor
tv—a%
a -t by - P9
C.t✓7 G..,G
Memo To:
mange
City Council
Subject;
Banair
Industrial Park
- Sale
of
lots
Since the last Council meeting, Councilors Cox, Saxl and
Tilley have requested crnment from our office relative to two principal
issues relating to Banair Industrial Park: (S) The legal status of the
process for applying to the FM for permission to sell lots in the
subdivision; and (2) N+nefher funds derived fron the sale of lots may be
applied to costs incurred by the City for the development of roads, sewers,
etc.
I have reviewed information on the issues available in our
office and the Airlwrt. I also attempted to obtain guidance fran the FAA on
the second issue,
zemy
, but was unable to talk with anyone authorized to answer
questions. Its following is based upon my review to date.
Pamir Industrial Park is located on property acquired by
the City frau the united States Caverrcnent. under the terns of the transfer
documents, the City does not have authority to convey it to any third party
without the FM's permission.
According to information provided by the Planning Office, 6
lots consisting of the front portion of Banair Industrial Park were approved
by the Planning Coard on October 21, 1985. line subdivision was finally
approved by the City Council on October 28, 1985. Mo other changes were
made to the subdivision plan until this past Spring. On May 18, 1987, the
Planning Board approved an arsenal to the subdivision plan providing for
an additional 4 lots. on May 27, 1987, this amendment was approved by the
City Council.
formal action to initiate an application to the FPA was
caumenced to the Fall, 1986. on October 8, 1986, the Airport Cannittee
considered the possibility of leasing 2 lots in Banair Industrial Park to
4Ybber Oil Company. Minutes of the meeting indicate that questions arose as
to the policy for selling lots in the subdivision. A copy of the
Carnmittee'a Minutes of that meeting is enclosed. Attaciment W.
-2 -
On October 17, 1986, the Committee discussed specifically
the question of sale of lots in the sanair Industrial Park. upon Completion
of their deliberations, the Committee voted tO direct me to prepare an order
for City Council approval for the authorization of City staff to formally
apply to the FPA for the necessary releases and permission to have existing
encumbrances on the City's title released. Me Committee also directed the
staff to give then an opportunity to review the proposed order at their
October 21st meeting (See Attachment "e")e on cctchm r 21, 1986, the
Committee reviewed the proposed order, made sane changes, and ultimately
approved the order in its current form. (See Attachment "C")
The full Council considered the item (Council order 06-416)
at its October 27, 1986 meeting. (See Attachment "B") As you Can see from
a transcript of the discussion prepared by my secretary, there was no debate
on the item, and the vote for approval was unanimous. (See Attachment "E")
The Council's intent in adopting Council Order 86-416 can
be determined by the plain meaning Of the language contained therein. The
Council authorized the preparation of the necessary application to FAA ". .
. so as to permit their (the Panair Industrial Park lots) sale t0 third
parties. The Order also reserved the right in the Council to approve
the final form of the application
in my view, the general "policy decision" to sell lots in
the Park was made at the time Council Order 86-416 was adopted. In my view,
the Only remaining issue for further Council action was the manner in which
the policy decision was to ea implemented. net is the purposeof the
proposal presently before the Council.
if the Council wishes to change or repeal its prior policy
decision, it may do. so by taking action to repeal Council Order 86-416. In
order for such action to be taken, there must be notice at a meeting prior
W the meeting in which the action is taken. The procedure for repeal of
previously adopted council orders is outlined in Chapter I, Article 3,
Section 13, Bangor City Ordinances.
If repeal of the Council Order i contemplated, the Council
should consider carefully the potential impact of such a decision On the
project. We c um currently have tleases granting options to purchase in the
event such PAA approval is received. Other questions relate to the
practical impact on prospective developers. nose are questions and issues
that must be addressed to others.
Attached to this Memo (Attachment "P") are photocopies of
materials published by the FAA for purposes of obtaining release of such
restrictions onairport land. A review of the provisions indicates clearly
that the process i somewhat cmplicated, and we are not guaranteed that
such permission will ever be granted.
Me first consideration for the FAA will be a determination
as to whether Che property iquestion is needed for future aeronautical
purposes. Fd ScMeon has previously indicated that there has been informal
discussions with FPA administrative personnel On this issue. It i
currently believed that they will agree that this laM has no prospective
aeronautical use.
-3 -
no next step is for the FA4 to consider what restrictions
to impose on the property if it isreleased. A list of the encumnbrance.s
that must be included is found anpages 118-119 of Attaciment "F".
Another issue is a determination of an appropriate use of
the sales proceeds. Under the terns of the Compliance manual, "if the
release action requested will permit a sale or other disposition of airport
property, FAA consent may require an owner to commit himself to reimburse
the United States for federal funds expended, or to apply the net proceeds
of a sale at fair market value for maintenance, operation, improvement o
development of a public airport." Obviously the first possibility is not in
our financial interest. Therefore, in order for the project to he
successful, we must obtain FAA approval for a plan which meets the second
criteria: to wit, a program for the "maintenance, operation, improvement or
development of a public airport (BIA)." (See Attachment "F", W. 115-129a).
.Incorporated in the pending item is a program for the use
of proceeds from the sale. IdninistIatively, Ed McKeon has made a
determination that the proposed program for the use of the proceeds meets
the regulatory criteria. It is my recollection that there have been
telephone conversations with representatives of the FAA indicating,
informally, that the proposed program in its present form would likely he
approved.
Councilor Tilley's proposal calls for a modification of the
proposed program. Under Mr. MCKeon's proposal, it is a joint development
effort by the City and the Airport. The Airport provides the land, the City -
prwides the public imprwements. In return, the Airport obtains the
ability to use the proceeds within the meaning of the applicable
regulations, and the City obtains the ability to tax the increased value of
real estate within the subdivision.
Councilor Tilley has proposed that the Airport assume a
greater financial burden in the development. In addition to the lard, his
proposal calls for the Airport to assume the cost of providing the public
Improvements. The City would continue to receive the tax benefits drain the
development. In my view, such modification canes within the regulatory
standards. 'Io adopt such a change would mean an amendment to the proposal
currently before the Council. Whether the proposal makes economic sense is
another question that must he answered by others.
Please call me if you have any questions.
Enclosures
cc: Tan Small
Pate D'Errico
Ed McKeon
R.E.M.
AIRPORT COMMITTEE MEETING
A meeting of the Bangor City Council Airport Committee
was held on Wednesday, October 8, 1986 at 3 P.M. at the Economic
Development Conference Room.
Present were.
Harold Wheeler, Chairman
Edgar Brown
Arthur Tilley
Edward McKeon
Peter D'Errico
Item it - Option to lease BANAIR Lots 95 and £17. Economic Development
Director, Edward McKeon, informed the Committee. that Webber Oil Company
would liketo construct a 17,000 sq£t. facility on Lots $5 and 817 and
is requesting a 6 -month option in order to do preliminary planning.
The discussion centered on provisions in the BANAIR Industrial Park
leases relative to options to purchase. The Committee wanted to
continue this discussion in order to get a more complete report
on the policy of selling these lots and voted to table this matter
until their next meeting.
Item 02 Kelco Industries Lease Renewal. Mr. McKeon informed the
Committee that Nolan Industries leases space in Hangar 115 and
they have informed us they will, exercise their present option to
lease and asking that the option period be extended from 9/1/88 to
12/31/90 and that the rental rate of $711.60 be continued for the
extension period. Mr. McKeon and Mr. O'ErriCO are recommending
that the Committee approve this request. Mr. McKeon explained there
is no heat in the hangar and this company has made improvements to
the hangar and maintained the restroom facilities. The Committee
unanimously approved this lease renewal.
Attanseant "A"
(Minutes Continued) 2
Item #3 - Land Rental Review. This matter was tabled and to be
discussed at the next Committee meeting.
Item #4 - Bangor Datsun Sign Change. Mr. D'Errico reviewed Mr. Darling's
letter of August 18th with the Committee and explained that Bangor Datsun
is requesting a third sign on their premises which requires Committee
approval. Mr. Darling, representing Bangor Datsun, attended this
meeting and stated that this is a wall sign and costly to erect. The
Committee unanimously recommended approval of this sign to the Code
Enforcement Office which will then be presented to the Sign Review
Committee for their approval.
Meeting adjourned at 4:05 P.M.
L coKie
AIRPORT COMMITTEE MEETING
A meeting, of the Bangor City Council Airport Committee
was held on Friday, October 17, 1986 at 2 P.M. at the Economic
Development Conference Room.
Present were:
Harold Wheeler, Chairman
Arthur Tilley
Edgar Brown
Edward McKeon
Robert Miller
Sohn Flynn
Peter D'Errico
Item rl - Sale of BANAIR Industrial Park (Airport) Land. This
agenda item was discussed and tabled at the meeting held on
Wednesday, October 8th. The Committee discussed this sale of
lots in the BANAIR Industrial Park at length and Mr. Wheeler made
the motion, seconded by Mr. Brown that the City Attorney, Robert Miller,
prepare an order for City Council approval for authorization for the
city staff to formally apply to the FAA for necessary releases and
permission to have existing encumbrances to the city's title released
in the BANAIR Park for the ultimate sale of these parcels to current
and future tenants. Mr. Tilley voted against this motion. This City
Council order is to be reviewed by the Airport Committee at its meeting
on Tuesday, October 21st before submitting it to the City Council.
Item A2 - BANAIR Sewer Road Assessments. Mr. McKeon distributed for
the Committee t0 review, estimated Costs for road and sewer assessments
in the BANAIR sub -division as well as a list of figures for leased lots
in the BANAIR Industrial Park and suggested value and rental figures.
Items 93, 49, and 46 - tabled until the next meeting which is scheduled
for Tuesday, October 21st at 3 P.M. -
Attachment "B"
t(Minutes continued)
Item 95 - Aerofusion Assignment. Mr. McKeon explained to the
Committee that Larry Maul of Aerofusion leases hangar space inthe
9600 Area. In Order for Mr. Maul t0 obtain an SBA guaranteed loan
for his business, SBA requires an assignment of that lease to the bank
as part of the financing. Should lir. Maul default on payment to the
bank, the bank may retain the lease and would seek a new tenant for
this hangar under the same terms and conditions. Mr. Tilley made a
motion and Mr. Brown seconded the motion for the assignment of the
Aerofusion lease with the conditions satisfactory to the City Attorney
that are worked out with the bank.
Meeting adjourned at 3:95 P.M.
PSA
A meeting of the Bangor City Council Airport Committee
was held on Tuesday, October 21, 1986 at 3 P.M. at the Economic
Development Conference Room.
Present were.
Harold wheeler, Chairman
Arthur Tilley
Edgar Brown
Edward.Mc%eon
Robert Miller
John Flynn
Peter D'Errico
Item Al Sale of BANAIR Industrial Park (Airport) Land. This item
has been discussed at two previous meetings. Today the draft of a
Council Order authorizing the preparation of application to the
Federal Aviation Administration for release of title restrictions
in the BANAIR. Industrial Park was presented by Attorney Robert Miller
for review before being presented to the full City Council for approval.
The Committee discussed certain language in the Order with some minor
changes and Mr. Brown made a motion that this Council Order be approved
for Council action and it was seconded by Mr. Tilley. The vote was
unanimously approved.
Items A2 and d9 - BANAIR Sewer Road Assessments and Set Lease Cost
Per Lot for BANAIR Industrial Park. The Committee discussed a
schedule of BANAIR lot values and lease costs submitted by
Mr. Edward McKeon, Economic Development Director, an item agenda
continued from the previous meeting. After reviewing the values
and discussing the presentation by'the Economic Development Director,
of the background in arriving at the market values, the Committee
Attachment "C"
•'�.t (Minutes continued) 2
approved the list schedule as presented. As part of the discussion,
Mr. McKeon presented a schedule of estimated assessments for roads
and sewers against the BANAIR lots if such assessments are to be
levied by the city; these estimates were prepared by the City
Engineering Department. The estimates were discussed in relation
to their impact on the market price of the lots and total income
to .the airport as opposed to a policy of the assessments not being
levied on these lots. No action was required by the Committee on
the assessments but was for informational purposes only at this time.
Item R3 - Option to lease BANAIR Lots YS and W was tabled
Item "-Revised L Cost MPH!
I d t S l Pak ( St
Grlffln Road). This agenda Item was previously tabled at the
October 8th and 17th meetings. Mr. McKeon distributed a revision
Of lease prices for the Griffin Road/Union Street sub -division area
and explained that this is a revision upwards in value and is sub-
mitting this for approval in order to negotiate certain parcels.
He informed the Comittee that he has two different interested
parties in this sub -division and will need approval shortly on
these figures. He said the increased annual rental per acre value
averages approximately 11 percent. The Committee unanimously gave
the "go-ahead" to Mr. McKeon to proceed to negotiate with these
figures.
Meeting adjourned at 4:10 P.M.
EVoK-0k CITY COUNCIL
Cctober 27, 1906
Councilors Present: Brown, Cox, Frankel, Lebowitz, McCarthy, Sullivan,
Tilley, Wheeler and Willey.
(New business)
City Clerk: 86-416 Order authorizing preparation of application to Federal
Aviation Adninistration release of the title restrictions Bareir Industrial
Park. Councilor Wheeler.
Councilor Wheeler: Mr. Chairman, I move for passage of Council Order 86-416.
Councilor Willey: Second.
cbairman Frankel: Mavnd and seconded that Council Order 86-416 have passage.
Its a vote =law doubled. Its a vote.
City Clerk: 86-417 . . . .
Attachment 'B"
]/6/)6 5190.6 CH 1
j SECTION 2. PROCEDURES
115. DOCUMENTATION.
a General ,ramsProcedures.FAA consent [ release, represents
ref -
creation, o madmen[ of an airport agreement xep[e eats s material
alteration ofan
Impowhich
tantaffects
contractual relationship benefits to is governed
by statutes and oniof affects [he measure Of lcases, [O the public
from the operation Of a civil eFAAC. In all c icM1 consent
should be fully documented. The FAA Airpo
field aofficn con,
yali-
e files shall contain an original summary memorandum on ch
consent which:.
(1) digests all the facts and circumstances presented by the
owner supporting and justifying the requested I" action,
(2) specifies all the conclusive determinations made by the FAA
based on the facts and circumstances, and
(3) is endorsed by the FAA official authorized to grant the
request.
b. Owner Requests Any release, modification, reformation or amendment
of anairport agreement must be based O writtenrequest signed
by aduly authorized official of the public agency that awns the
airport (Part 155, FARs).
(1) Number of Copies Normally, the original request and support-
ing material should be submitted to the FAA Airports Field
Office by the airport owner. The general or specific limita-
tions on the delegated authority referred to in paragraph 110
may involve FAA regional and/ox national headquarters action.
If so, additional copies of the request or supporting material
are required and the airport owner
should be advised to
provide s In addition, where Department of Defense
required, the additional material outlined
in z
paragraph 122d will be provided.
(2) Lontent of Wrftt en Owner Re a Although no special farm
applicable,theEollpw;que most be specific and indicate,
a
g sc
(a) What agreement(s) with the United States are involved.
(b) Frac is requested.
(c) Why the release, modification, reformation or ,adment
;s requested.
Chap 6
Par 115 Page 113
Attachment 'R"
1/6/76
5190.6 CM 1
(d) Mat facts and circumstances justify the request.
(e) Mat requirements of state of local law should be
provided for in the language or an FAA issued document
1f the request is consented to or granted.
(f) Mat property or facilities are involved.
(g) Nov the property was acquired or obtained by the airport
(h) Mat is the present condition and what present use is
made of any property or facilities involved.
(1) Mat use r disposition will be made of the property or
facilities.
(3) Mat is the appraised fair market value of the property
or facilities.
(k) Mat proceeds axe expected from the use or disposition
of the property and what will be done with any net
revenues derived.
(1) A comparison of the relative advantage or benefit to
the airport from sale o other disposition a opposed
to retention for rental income.
A (m) A plan identifying the intangible benefits if any accruing
to the airport, the amount attributed to the intangible
benefits and the merit of their application asnoffset
against the falx market value of the property tobe
released. The pian should also Include as a minimum:
1 a statement of the airport's source and application
of funds for the preceding three yea .
2 a statement of future sources and application of
funds seeded for the continued operation and main-
tenance of the airport, and
3 a statement of the financial capability and intent
to accomplish the airport developmentincluded In
the current FAA national Airport System plan.
(3) Exhibits to be Furnished by Owner.
(a) Each copy of the request will have attached two scaled
drawings (see b(4) of this paragraph) showing all airport
Chap 6
Page 114 Par 115
]/6/)6
5190.6 CHO 1
property and airport facilities which are currently
obligated for airport purposes by agreements with the
United States. Other exhibits supporting or justifying
the request, such as maps, potographs, plans and
appraisal reports, shall be attached, appropriate.
(b) Height data computations (see paragraph 116c(3)).
(c) If the release action requested would permit a sale or
other disposition of airport property, FAA consent may
requirwner
Unitedean Statees fortFederaltfooda eexpmed, or, t to the apply
the net proceeds of a sale at fairmarket value for
maintenance, operation, improvement. or development of a
public airport (see paragraph124 and 138). If s'
binding commitment obligating the airport owner shall be
required. A unilateral resolution expressing asimilar
imilar
intent will not be acceptable 4
ceptable. For this r , the
request by airport own r fora release to ell or dis-
Pose Ofazport property order these circumstances most
include a written agreement to be bound by such conditions
citing asconsideration the Ooverment's release of the
Property. The request should also be accompanied by
evidence, which may be in the form of asolution, that
the public agency owning the airport and the official
executing such agreement are empowered to enter into
such an agreement.
(4) Explanation Of a Requirementfor Scaled
(a) PAAP/ADAT Develo ad Air Orts. The owners of airports
sObject to grant agreements are obligated under the
sponsor's assurances
s to maintain an airport layout plan
"up-to-date at all class" and approved by the FAA. A
release, modification, reformation Or mendment to my
agreement for such an airport which changes Or alters
the airport or
a
any of its facilities must also be
reflected a endment o revision to the approved
layout Plan, land use plan may be developed
as a
supplement to an airport layout plan and approved
forcompliance purposes. In either case, a showing of
proposed development or abandonment, which is not specifi-
cally approved in
accordance with the guidance of this
Chapter, shall not be construed as granted o consented to
by the FAA. The owner should be s advised iwriting.
A revision or amendment of a property map (Exhibit A of
a FAAp/ADAp Project Application) may also be required An
duplicate.
Chap 6
Far 115
Page 115
5190.6 CNC 1 )/6/)6
(b) Non-PAM/ADAP Developed Airports. Airport layout
plans are required for PAM/ADM airports and for
later surplus airports. However,
some instruments may
not contain compliance obligations requiring inclusion
of an airport layout plan. An airport owner, as
a
consideration for FAA consent to a change to the
existing obligations, must satisfy the reasonable
requirements of the PM. The airport owner
must
provide the FAA with two copies of a currentscaled
drawing of the airport and its facilities as an
exhibit to support any request for change affecting
the obligated usage of airport facilities. The
drawing shall, as a minimum, adequately identify and
reflect the curent status and use of the airport land
and facilities at the time of the request, including
the effect of the requested change.
(c) Relation to ALP Criteria. The scaled drawing required
to support a request for release need not fully Peet the
complete FAA type airport layout plan criteria, although
this is desirable. The drawing serves to graphically
explain or depict the effect on the airport if the
requested release is granted. It is not the document
by which the release is granted and no PAA approval
shall be given to any drawing inconsistent with the
airport owcurrent obligations until a release
has been executed in accordance with the guidance
contained in this chapter.
116. FAA ACTION ON OWNER REQUESTS.
a Evaluation. When a request for release has been received,
supported by the appropriate documentation and exhibits, a
valuation of the total effect of the owner's proposal shall
be made. This evaluation shall be based on the general
policy stated in paragraph 111 and shall include consideration
of such pertinent factors as.
(1) The past and present owner compliance record order all its
airport agreements and its bona fide actions to make
available a safe and usable airport for maximum aeronautical
e by the public. Include evidence that the owner has a
taken or agreed to take all actions possible to correct
noncompliance situations at the airport, if applicable.
Page 116 Chap 6
Par 115
9/6/]6
5190.6 Cxq 1
(2) The reasonableness and Practicality of the own ' request in
terms r
s of aeronautical facilities which a needed and the
Priority of the need. e
(3) The net benefit to be derived by civil aviation and the
compatibility of the proposal with the needs of civil
aviation,
(4) Consistency with the guidelines for specific types of
:leases in Section 3 of this Chapter.
Determinations The PM will not release more than that which the
owner requests. The decision to grant or deny the request, based
n the above evaluation factors Dust be guided by the statutes,
regulations and policy applicable is the specific types of Agree -
cents
involved. in addition, i must be determined that either
(1) the public purpose for 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 gra vent will not prevent accomplishment of
the public purposes for which the airport or its facilities
ware advancetheobligated, such
interestofthe tUnited States ion is ain civil aviation,
or
(3) the release, modification, reformation or amendment will
obligate the airport Ownerunder new terms, conditions.
ants, re
reservations or restrictions determined necessary
inVsthe publicinterest and to advance the interests
of the United States in civil aviation, or
(4) the release, modification, refereation or amendment will
conform the rights and obligations of the owner to the
statutes of the United States and the intent of the
Congress consistent with applicable law.
(5) Also, it must be determined if an environmental
uant to the
assessment
National EnvironmentalPolicyAct of 1969 ions of
the
(P.L. 91-190). -
c ComPeeton of Action uest.Upon completion
ov the
r[en<
review and evaluation of the request, and following tfi
of the regional office, Washington headquarters, the Departments
Of Defense, as applicable, the PAA will advise the airport owner
that its request is granted or denied. Any special conditions,
qualifications or restrictions to an approval shall be included.
Chap 6
Par 116
Page 117
5190.6 CHG 1
)/6/76
(1) FAA Approval Action. If the request or a modification of it
acceptable to the ower is approved, the ne ary instruments
or documents, approved for this purpose by the Regional Counsel,
will be prepared conforming to the extent possible with the
guidance of the General Counsel memorandum to all Regional
Counsels dated April 30, 1965, (Appendix 4 to this order).
Parallel action will be initiated to amend all related
FAA documents, e.g.,; WASP, airport layout plan, land use
plans, airport property map, FAA Form 5010, -as required, to
achieve Consistency with the release. The ow shall
thereafter provide the FAA with any acknowledgement (such
as a notary) or copies of executed instruments or documents
as required for FAA record purposes. The approval procedure
may include an FAA letter of intent to approve the request,
1f so, see paragraph c(4) below.
(2) Content of Release Document. The formal release by FAA shall
cite the agreements thereby affected and should identify
specific areas
on
r facilities involved. The owner shall be
notified ofthebinding effect of the revised obligations
as reflected by the scaled drawing or layout plan.
(3) Content of Release Document for Sale or Disposal. A total
release permitting sale or disposal of obligated land compris-
ing a part of an airport or in the vicinity of an airport
must specify that the ower is obligated to:
(a) Include in any deed, lease or other conveyance of a
property interest to others, arvation assuring the
public right to fly a raft Overthe land released, and
u
toe a inherent aircraft noisover the lana raises",
Or in to and from or by operation of the airport.
Mefollowing language shall be used:
"There is hereby reserved to the (grantor)
(lessor) its successors
and assigns, for the
use and benefit eofthe public, a right of
flight for the passage of aircraft in the
airspace above the surface of the premises
herein (conveyed) (leased). "is public
right of flight shall include the right to
cause in said airspace any noise inherent
in the operation of any aircraft used for
navigation or flight through the said air-
space or landing at, taking off from or
operation on the (official name) Airport."
Chap 6
page 118 Par 116
]/6/]6
Chap 6
Par 116
SI40.6 F.M. 1
(b) Include in any deed, lease or other conveyance of a
property interest to others a restriction:
(1) Prohibiting the erection of structures or growth of
natural objects that would constitute an obstruction
to air navigation, and
(2) Prohibiting 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
interfere with air navigation and cer saltation
facilities serving the airport, and
(3) Incorporating the Sponsors' Title VI Civil Rights
Assurance obligations into all leases and other cn -
veyances except fee title deeds. Fee title deeds
transfer ownership of the property and it no longer
serves an airport purpose. Accordingly, the Sponsors'
Civil Rights Assurance obligations are not required to
be transferred to the new
(OOT General Counsel
and Acting DepartmentalDirector of Civil Rights'
letter of August 21, 1971, to The Secretary regarding e
Standard DOT Title VI Assurances.)
(c) These restrictions shall set forth in the instrument of
release the applicable height limits above which n
structure or growth should be permitted. These limits
shall be computed according to the currently effective
FAA criteria as applied to the airport. Advisory Circulars,
Design Manualsr Federal Aviation Regulations or other
such documents shall not be incorporated by reference
in the instrument or releases issued by the FAA. Neither
should this be done in leases, deeds, or conveyances of
property interests used by the airport owner. The
specification of actual height limits will avoid a
burdensome at
t
confusing encumbrance
umbra n the title to the
land. Mean the applicable height limits cannot be
computed from available data at the FAA Airports field
Office, the airport owner shall be required to supply
any additional data needed to specify the correct
computations. -
(3) FAA Consent by Letter of Intent to Release
(a) Basis for Use.
(1) Release and disposal of facilities developed through
Federal assistance is often necessary to finance
replacement facilities. Airport owners may have to
assure the availability of the old Facilities for
disposal in order to obtain responsive proposals to
acquire or encumber the existing facilities. The
Page 119
5190.6 CHG 1
7/6/76
may therefore request a letter of intent as to
such relea Such a letter may be requested merely
to permit the Owner to determine the market demand
for portions of the available surplus revenue produc-
ing airport property.
(2) The FAA may issue such a letter of intent (to
release) appropriately conditioned and specifically
contingent upon adequate replacement facilities being
developed and becoming operable.
(b) Content. A letter of intent Issued by the FAA represents
a binding commitment and an advance decision to release
the property when specific conditions have been accom-
plished. The use
of such a letter i not to be
encouraged. It should only be employed when all of
the required conditions (as pertinent to the type of
release sought as outlined in this Chapter) have
been met or are specifically made a condition
of the pledgecontained in the letter of intent.
In addition, such a letter of intent should cite
by reference, any specific understandings reached on
anticipated problems in achieving the substitution
of airport properties (e.g., who pays for relocation
of various facilities and equipment, the Cost of
abating existing leases). Consideration should be
given to placing a reasonable time limit on the
commitment to release, especially where the intent
is to assess the market demand for airport property.
117. RELEASE EFFECT ON AIRPORT OWNER CONVEYING ALL OR PART OF PUBLIC AIRPORT
M A PEDERAL AGENCY.
a. The FAA cannot legally prohibit a airportowner from conveying to
a Federal agency any airport property which is subject to an
airport compliance agreement. The FAA Chief counsel has
indicated that such a conveyance, whether voluntary or otbeevise,.
does not place the conveying airport owner in default of any
obligation to the United States. Such a conveyance has the
effect of a complete release of the conveying owner.
b. when such aonveyance is proposed, or has been accomplished
without prior notice to the FAA, and it is determined there
would be or is an adverse effect on civil aviation, PM
objectionsshould immediately be made known t0 both the airport
owner and the Federal agency involved. If a satisfactory
solution to an adverse effect so civil aviation cannot be
obtained at the field office level, a full and complete report
should be submitted to the Airports Service without delay. "a
FAA shall make appropriate objection and take timely action
with the Federal agency involved.
118.-120. RESERVED. Chap 6
Page 120 Par 116
7/6/76
SECTION 3. SURPLUS PROPERTY AGR%EMENTS
121. GENERAL.
5190.6 CHG 1_
a Basic and Coastal Policies and Procedures. Part 155 of the FAR 'a
sets faith the basic and general policiesnd procedures applicable
to all such agreements. A copy of Part 155 should be available
for review by all owners
of surplus airport property, particularly
upon a change in local administration or political office which
could affect the airport and its place in the community. Changes
inaurplus property agre consistent with the purposeof the
FAA to foster the development, improvement, operation ormaintenance
of a system of public airports or to foster a source ofx
for such purposes from nonaviation business epublic airports,
should be encouraged when it is an the public'interest.
b. Authorized Uses of Surplus Property. Surplus airport property
agreements obligate the grantee owner to obtain the written
consent of the Administrator, FAA, to use, lease, sell, salvage,
or dispose of transferred airport property for other than airport
purposes. Section 13(g) of the Surplus Property Act of 1944
(as amended by P.L. 80-289), in authorizing the conveyance of
surplus Federal property for airport purposes, includes --as within
such "alrpart purposes"-- the conveyance of property "needed to
develop so of revenue from nonavfatlon businesses at a
public airport." In administering the Act the FAA recognizes
a distinction between aeronautical property (aviation use) and
noreviation-use property, both of which may be, and have been,
conveyed a wing a airport purpose (See definition in
paragraph 112.) It is the position of the FPA that surplus
Federal property conveyed under the Act for airport purposes
may be used to support a nonavistion activity only if, among
other requirements, such use produces anable income
available for the development, improvement, operation
public airport facilities. No other seeof such property, or
the income it produces was contemplated by the Act.
Property Identification. Very few older deeds of conveyance
separately identify x iation use property from
aviation use property. The original application of the grantee and
the FAA (CAA) disposal report initially established which areas
of an airport were being recommended for transfer asrevenue-
producing property and which for aviation a Mec current scaled
drawing referred to in paragraph 115b(3) reflects subsequent
FAA actions pursuant to the authority of P.L. 81-311. Such
actions (e.g., approving a land -use plan for compliance purposes)
may confirm and/or modify the land usage authorized by initial
disposal and recommendations for specific areas of a surplus
airport.
Chap 6
Par 121 Page 121
5190.6 CHG 1 )/6/)6 { 11/2'
Lend Transferred Under Regulation 16War Assets Administration.
Prior to the amendment of the Surplus Property Act in 1947 by
P.L. 80-289, surplus Federal properties were nveyed for airport
purposes under the procedures of WAA Regulation 16. MIS
Regulation did not specifically identify those land uses coming
within an airport purpose. It did require that the building
areas
and no aviation facilities shall be used only in a manner
notto interfere with the efficient operation of the landing
The actual conveyances under this regulation vary in
format but many of them stipulate that existing facilities
may be used for compatible nonaviation purposes until such time
s the FAA (CAA) decides they are
needed for a aviation
purpose. The regulation and the conveyance documents are
silent as to the income from such nonaviation use.
It is the
position of the FAA that the usage contemplated by WAR,
Regulation 16 is no more extensive than that by P.L. 80-289.
Consequently, aoaviation use of property may be authorized only
when it s ae
airport purpose. This purpose is served
when the income from such property, including the netproceeds
of a sale following release, is applied to the development,
improvement, maintenance, or operation of a public airport.
122. RELEASE FROM SPECIFIC CONDITIONS.
e Industrial Use Restrictions. Certain surplus property conveyances
prohibit the use of the property as an industrial plant, factory
or similar facility. P.L. 81-311 repeals this prohibition.
The FAA will Issue needed releases orcorrections to effect
the elimination of such restrictions forr ord. This does
not authorize industrial use of land otherwise obligated
and needed for airport aeronautical use purposes.
b. Reservation of Fissionable Material. Many surplus property
agreements reserve to the U.S. the right to explore for mine
and extract fissionable material. Section 68 of the Atomic
Energy Act of 1954, as
amended, released and quitclaimed to
the grantees under such agreements all such rights. The
FAA will i needed releases o corrections to effect the
elimlratiov of such reservations for the record.
C. Other Reserved Subsurface Interests.
(1) Minerals and Petroleum. Some surplus property agreements
reserve to the U.S. all subsurface minerals and petroleum
other than fissionable materials. It has been determined
that the reservation of subsurface minerals and petroleum
is not a covenant or
restriction n
Sction that may be released, conveyed
or quitclaimed by the FAA under P.L. 81-311. Disposition
of this reservation Is the responsibility of the Federal
Page 122 Chap 6
Par 121 Chap
Par _
11/25/77 5190.6 MG 2
agency controlling or having Jurisdiction over
reserved sub-
surface interests. Requests concerning such interests should
be referred to the controlling agency.
(2) Residual Interest. Routinely, in disposing of these reserved
mineral rights to an approved applicant, the GSA imposes s
prohibition against exploring for or extracting such minerals
r petroleum in any way that would interfere with the operation
and maintenance of the airport involved. Other Federal than -
ties normally would do the same. Such an imposed prohibition
constitutes a residual interest in the subsurface minerals
retained by the Government which theoretically could be con-
veyed to the airport ow under P.L. 80-289. As a matter of
policy, the FM will not recommend to GSA or another Federal
agency anveyance to a grantee of the mineral rights reserved
to the U.S. (in asurplus airport property deed). In those
where GSA oro
another Federal agency has already conveyed
to other parties the mineral rights so conditioned, the FAA
will not recommend conveyance of the Government's residual
interest to the airport owner.
d. National Emergency Use Provision
(1) She FAA may grant a release of this provision which is often
referred to as the recapture clause. However, concurrence
of the Department of Defense (Doo) must be specifically
requested and obtained by the FAA when the airport subject to
capture is either listed in the current "Airports Required By
Department of Defense for National Emergency Use," list or has
a based Federal military aviation activity. a
(2) If the only reason for requesting release of the National
Emergency Use Plan (NEUP) is an alleged difficulty in selling
bonds or attracting private capital, this should be clearly
established and documented. A mere statement is notenough.
There should be copies of letters from lending institutions or
bond brokers to support the allegation.
(3) For a release of the recapture clause, the airport owner ust
provide two scaled drawings (see paragraph 115b(3)and(4))and
two copies of other exhibits, a appropriate, for each DOD
Federal military activity (Army, USAF, Navy (including MCAS))
and USCG, listed in the currently applicable list currently
[
based s the airport. TheNational Guard and the Air Guard
are not Federal military activities until mobilized by the
United States.
Crap 6
Par 122 Page 123
5190.6 CHC 2
11/25/71 If 716/76
(4) When requested, the Office Of Airports Programs will obtain the
required concurrence of the DOD upon submission of the summary
memorandum (see paragraph 115x) together with required copies
of scaled drawings and ether exhibits specified above. Tee
region's request must indicate its determination to grant the
release if DOD concurs. Additionally, the Office of Airports
Programs, AAP -1, Attention: AAP-600,shall be provided one
complete set of scaled drawings and exhibits for beadquartera
internal coordination and record purposes. s
e. Reduction or Change in Aviation Use Property. Economic growth Or
changes in aviation needs may make it desirable to convert dedi-
cated aviation use property to the status Of r ne-production
property. The conversion may receive FAA approval provided the
present/future civil aviation needs are met or red and the
public benefit in civil aviation is enhanced.Further, in all
such conversions,
s
rsions, PAA shall require assurance that all such
converted will be utilized to produce a fair return
for civil airport purposes consistent with its original con -
veyance and 1n support of the owner's
endeavor to make the air-
port as self-sustaining as possible.
f. Lease, Sale or Disposal Considering Intangible Benefits
(1) Surplus Federal property conveyed to local public agencies
under the Surplus Property Act must be used for airport
purposes. As amended by P.L. 80-289 this statute r cognizes
that the use
of surplus property to generate revenues for
the airport from n aviation business activity eathe
airport is an authorized airport purpose. A use
r lease
of such property with less than its fair rental value
accruing to the airport (Or a sale and disposal of such
property for less than its appraised fair market value)
is inconsistent with the intent of the statute and shall
not be authorized. P.L. 81-311 empowers the FAA to
extend this concept on request to surplus airport property
conveyances antedating P.L. 80-289.
(2) In determining whether fair marked value is to be received
from a proposed nonaviation use
of surplus airport property,
the consideration need not bem ary. Thus, for example,
conveyanceof a property interest in a right of way over
surplus airport land to a railroad or highway may be con-
sistent with the intent of the lav if the resulting
trackage or roadway will directly benefit the airport o
enhance its efficiency or utility t0 a degree commensurate
with the value of the property involved. aerators, the
hap 6
Page 124 Par 122
]/6/76
Chap 6
Par 122
5190.6 cN; 1
value of these intangible benefits may be used as offset
against fair market value in determining the monetary con-
sideration to be received for the property.
(3) Also in the interests of equity, an exemption may be made in
the case of property that was originally owned or acquired in
fee simple title by the present airport Owner then leased to
the Government and subsequently reacquired for public airport
Purposes under the Surplus Property Act. In such instances
property not otherwise needed to meet any present or foresee-
able airport purpose may be leased or conveyed at less than
fair market value for use that is completely compatible with
the operation, maintenance, development and improvement of
the airport.
g. Consent to Divert Excess Revenue from Surplus Property, The
requirement to use surplus property assets for airport purposes
also applies [o threvenues derived therefrom. The approval of
n
a lease for aviation purposes does not release the grantee from
its obligation to apply the resulting income to the maintenance,
operation and development of the airport. However, under
P.L. 81-311, the FAA may, under certain circumstances, release
a grantee from its obligation to devote such revenues
exclusively
to airport purposes.Approval may be given to divert to other
public purposes excess revenues derived from surplus airport
property when the conditions have been met:
(1) The level of maintenance and quality of operating supervision
provided to the airport is and has consistently been acceptable
to the FAA as meeting the obligations of the grantee,
(2) There are
nviolations or defaults of the transfer deed o of
subsequent agreements with the Government applicable to the
airport.
(3) The FAA has determined (by appropriate review, especially of
the HASP, airport layout plan, land -use plan, airport prop-
erty map) that there are
no foreseeable improvements, exten-
sions, rehabilitations o additions to the capital plan that
could result in improved
e
aeronautical services to the public.
Any release approval to divert excess revenues under
these conditions shall be Specifically limitedto past
accumulations of income in a of operating costs
ans
shall not authorize furtherdiversions of revenues
subsequently received.
Page 125
)/6/]6
5190.6 CHU 1
h. Release of Reverter Clause. Frequently, in order to promote
private investment in airport facilities, the owners of surplus
airports seek the removal of the provision givingthe United States
the option to revert
title in the event of default. This is an
Important remedy intended to be reserved to the Government. In
unusual circumstances such a proposal with full Justification may
be referred for individual consideration by FAA headquarters.
I. Release of Obligations for Property Nat Received. The FAR may
release an airport owner of all inventory accountability obliga-
tions for specific items of property When itis determined that
the items were not, in fact, received by the owner even though
m
specified in the instrument ofdisposal.
123. TOTAL RELMSFS FOR SALE SALVAGE, RELOCATION REMOVAL OR OTHER DISPOSAL.
a Personal Property, Equipment, Structures or Facilities. Surplus
airport property in these categories may be released from all
inventory accountability (whether or not the airport at which
it is located is included in the MRNAP or has a based Federal
Military aviation activity). whenever it has been determined that
such property:
(1) has outlived its useful life, has deteriorated beyond
economical repair or rehabilitation, is no longer needed,
has been replaced, is to be traded to obtain similar or
other property needed for the airport; o
(2) has been destroyed or lost by fire or other uncontrol-
lable c and the insured value, if any, has been
credited to the airport fund; or
(3) has been, or should be, removed or relocated to permit
needed airport improvement or expansion including salvage
or other use elsewhere on rte airport.
b. Utility Systems (Includes Railroad Utilities).
(1) Utility distribution systems may be released to permit
demolition or other disposal when they have deteriorated
beyond economical repair o no longer needed for the
airport. Also, where
a irportOwner r is unable t
maintain a utility systembecause of lack of adequately
skilled personnel, financial ability, etc., it may be
released from the terms, conditions, reservations and
astrictions of any applicable surplus property instrument
of disposal to permit Conveyance of the System to a utility
company forcontinued operation, provided the bill of sale
includes the following provisions:
Chap fi
Page 126 par 122
7/6/76 51go.6 CNG 1
(a) Utility services will be supplied to all present and
future Occupants of the airport{ and _
(b) The Government shall have the option to lease or purchase
the system under mutually acceptable terms upon military
activation of the airport, andshall be granted right
of entry and use of such system pending its acquisition
from the utility company.
(2) In the event the airport or the utility system is subject to
the National Emergency Use Provision and The airport is either
listed in the current NRNAP or has a based Federal military
vi fan activity, no release of a utilitsystem, whether to
permit demolition or sale to a utility company, shall be
granted until the D00 has advised FAA in writing that it has
0 objection to such release. If the airport is not listed in
the MRS" or does not have any based military activity,
paragraph b(1)(b) above need not apply.
124. TOTAL RELEASE OF AIRPORT LAND
e General Policy. Airport land is A valuable asset. A total release,
permitting the sale and disposal of real property acquired for
airport purposes under the Surplus Property Act, shall not be
granted unless and until all other avenues
s
and a of such
property to benefit civil aviation have been fully explored.
(1) If any such property is no longer needed to directly support an
airport urpose o activity (including the generation of revenues
for the airport), it may be released for sale and disposal
only upon a demonstration that such disposal will produce an
equal On greater benefit (to the airport which it Is a part o
pother public airport) than would the continued retention of
the land. Such a release constitutes in effect an authoiiza-
Lioet(cash sz tconvert a real property asset into another form of
assPhysical improvements) which better serves
the purpose for which the real property was initially conveyed
This objective is not met unless a amount equal to the net
Proceeds of a sale of the property at its current fair market
value is realized as a consequence of the release and such
amount is firmly committed to be applied to airport purposes
as outlined in this paragraph.
(2) This policy does not apply when the release involves the land
owned in fee by the sponsor and leased to the Federal Goverment
for a term of years and Men included with other properties a
part of a surplus property agreement. In this case, there Is
no requirement for the disposition of the net proceeds from the
Chap 6
Par 123 Page 127
5190.6 CHO 1 ]/6/]6
sale or disposal. However, the airport owner should be
encouraged to use the money for airport development.
b. Purpose of Release.
(1) As indicated in paragraph 115b(2), the airport owner
requesting a release of surplus airport land must identify
and justify the z n for which the release is requested.
One such justification could be a showing that the expected
net proceeds of a sale of the property at its current
market value will be required to finance items of airport
development and improvement; the need for which is concurred
in by the responsible FAA official. In approving a release
n this basis, consideration will be given to the amount
of funds already accumulated from prior airport revenues
and the amount of land needed to be disposed of to adequately
finance the development or improvement items proposed.
band will not be released merely to make it available for
private or public development regardless of its collateral
benefits to the community.
(2) However, in some instances, the conversion
n
of unneeded
airport land into a re productive a set may bejustified
even though no specific items of airport development o
improvement are Immediately required. At some airports,
for instance, land in a of present and future
care-
autical requirements does not and cannot generate adequate
revenues for the airport from rentals and leases in its
existing state. Frequently such land has a potential
market value if developed for specific no aviation uses
far exceeding that Indicated by its present rental value.
As ene xample, a tract of undeveloped land ata airport
may becapable of yielding only $1,000 a year as income
to the airport from agricultural or grazing leases.
Secs of its location, it might have a ent market
valueof $50,000 for compatible industrialdevelopmevt .
r
The $50,000, if invested at 8 percent interest would
yield $2,000 or twice the Present aual rental income.
Under then circumstances, a melee and sale may b
justified a tu
consistent with the terms of the original
conveyance if the proceeds are adequately protected
and accounted for.
Determining hand values. The value to be placed on land for
which a release has beenrequested shall be based on the
present appraised value(for its highest and best ase) of the
land itself and any Federal improvements initially conveyed
with the property. Iv many cases, the original buildings
Chap 6 Chap
Page 128 Par 124 Par
1/6p6 Si90.fi CHG 1
and Improvements may have outlived theiruseful life and a
determination may have been made (by FAA) that no further obliga-
tion to prey r maintain them exists. If they have been
replaced under s
such circumstances if additional improvements
have bee added without Federal financing the value of such
improvements need not be included for puposesof determining
the financial commitment Of a release grantedunder the guidance
In this paragraph. Also, intangible benefits, if any, must be
considered in determining this financial commitment. +
d. Appraisals With the exceptions noted in this subparagraph,
release authorizing the sale and disposal of airport land shall
not be granted unless the fair market value has been supported
by at least one Independent appraisal report. (See Uniform
Appraisal Standards for Federal Land Acquisition booklet for
guidance.) Additional appraisals by more than one appraisal
rganization may be required by the FAA when it is deemed x
appropriate. Appraisals shall be made by noninterested appraisers
qualified by experience and who have professional statue as
appraisers of real property. If any appraiser is involved I,
negotiations for the purchase or sale of the property or if
there iss vidence of collaboration between appraisers, such
appraisalreports are invalid and shall not be considered by
FAA in determining the fair market value of the land involved.
The costa of obtaining the appraisals shall be borne by the
airport owner but may be considered as
aoffset to the proceeds
realized from a sale in determining net proceeds. (See paragraph
112d.) The requirement for an appraisal may be waived if the
responsible FAA official acting on the request for release
determines that:
(1) The approximate fair markets salvage value of the property
released is less than $1,000, or
(2) The property released is a utility system to be sold to a
utility company and will accommodate the continued airport
u and Operational requirements, or
(3) It would be in the public interest to require public
advertising and sale to the highest responsible bidder in
lieu of appraisals.
e Lone -term Leases Where it is determined necessary to establish
fair market v of land in connection with long-term leases of
the airport property, similar requirements for appraisal shall
prevail.
Chap 6
Par 124 Page 129
5190.6 CNG 1
716176
f. Application of Proceeds.
(1) Any release
of airport land shall be subject to a firm
commitment the airport owner with respect to a
amount equal to the net proceeds of a sale of the property
at Its current fair market value. Note that the actual
proceeds realized are not controlling. Following a valid
release the airport owner may discount the selling price
or give the land away as a subsidy or inducement to
attract industrial development or he may use the land
for another local public purpose (city or county maintenance
buildings, parks, etc.), provided it is compatible with the
airport operations.
(2) An FAA release must, however, insure that the current value
of the land asset previously dedicated to airport purposes is
replaced by its equivalent value in new development or improve -
eat at the airport or retained for such purposes while generat-
ing'interest or dividend income to operate the airport. this
implies a contractual commltmenq as consideration for the
release, to apply an amount equal to the net proceeds of A
fair market value sale to specified items of airport develop -
meat and improvement.
(3) while the income from such anaunt, where no immediate
improvements z contemplated, may be used farent
operation and maintenance of aviationuseairport property
(see paragraph 112a) the obligated amount itself must be
used for the following purposes in the order of priority
indicated:
* (a) eligible items of airport development see forth in
PAR Part 152 (and as appropriate, in the HASP by
priority of need) to beaccomplished i ordance
with currently applicable FAA design criteria.
(b) Any aeronautical items of airport development
ineligible under the ADAP.
* (c) Deposit at interest in an identifiable account for
deferred a within a reasonable time for items
in priority
(a) and (b) above. The interest o
dividends from these deposits can be used for the
current operation and maintenance of the aviation -
use airport property. e
(d) Retirement of airport bands which are secured by pledges
of airport revenue, including repayment of loans from
other Federal agencies for such development.
Page 129a
Chap 6
Par 124
�c