whats new in airport compliance ? charles c. erhard
TRANSCRIPT
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What’s New In Airport Compliance ?
What’s New In Airport Compliance ?
Charles C. ErhardCharles C. Erhard
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Residential Development On Federally Obligated Airports ?Residential Development On
Federally Obligated Airports ?
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Bring Housing on to the Airport???
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Airport HomeComplete with Hot-Tub!
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Bring Housing on to the Airport???
•Airport Homes = Future Access Restrictions
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Bring Housing on to the Airport???
•Airport Homes = Future Access Restrictions
•Airport Homes = Vehicle and Pedestrian Deviations
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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
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Balanced Approach in Evaluating Access Restrictions
Balanced Approach in Evaluating Access Restrictions
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Balancing the Federal and LocalInterest
Balancing the Federal and LocalInterest
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Balanced Approach
• Define the Noise Problem
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Balanced Approach
• Define the Noise Problem• Identify Non-Restrictive Measures Sponsor Has
or Could Implement
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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
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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
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Pre-selected Restriction by Aircraft Class or Type
(Stage 2 Ban)Unjustly Discriminatory
Pre-selected Restriction by Aircraft Class or Type
(Stage 2 Ban)Unjustly Discriminatory
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Rule of Unintended Consequences Stage 2 Ban
Rule of Unintended Consequences Stage 2 Ban
Sabreliner “Out”
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Rule of Unintended ConsequencesStage 2 Ban
Mig 17 “In”
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Rule of Unintended Consequences Stage 2 Ban
A-3 “In”
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Airport Real Estate ValuationsAirport Real Estate Valuations
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Third Party Developed Facilities
Fair Market Rent For The DeveloperFair Market Rent For The Developer
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Financial OfferAirport Paid Greater of!
Financial OfferAirport Paid Greater of!
Minimum Guaranteed Ground Rental OR
Percentage Bid of Gross Rentals
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Calculation of MinimumGuaranteed Ground Rental
Calculation of MinimumGuaranteed Ground Rental
Appraisal of Site $5.00 per sq. ft.
CAP Rate 7%
Ground Rental Rate $5.00 x 7% = $0.35 per
sq. ft.
Site Size 400,000 sq. ft.
Minimum Guarantee $140,000 per year
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Rent for the Airport’s FacilitiesRent for the Airport’s Facilities
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Rent for the Airport’s FacilitiesRent for the Airport’s Facilities
• Market or Cost Approach Rental
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Third Party Developed Facilities
Developer Facilities Revert to the Airport
“Beware of the Vice-President of Extensions”
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The Airport’s Residual Interest Has Value
The Airport’s 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?
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The Airport’s Residual Interest Has Value
The Airport’s 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.
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The Airport’s Residual Interest Has Value
The Airport’s 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?
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The Airport’s Residual Interest Has Value
The Airport’s 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
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Preserving Airport Rights and Powers
What is wrong with this picture?
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Airline Service Incentives Everyone Wants Low-cost Service
Airline Service Incentives Everyone Wants Low-cost Service
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Sarasota Petition to Subsidize Airline Service
Sarasota Petition to Subsidize Airline Service
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FAA Revenue Use Policy Prohibits a Subsidy with Airport Revenue
FAA Revenue Use Policy Prohibits a Subsidy with Airport Revenue
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Threshold Question — Is It An Operating Cost of the Airport
or Community Economic Development
Threshold Question — Is It An Operating Cost of the Airport
or Community Economic Development
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