Can a airport with active leases be closed?

Sinistar

Sinistar

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Brad
So we are looking into buying a hangar, 3rd time...we'll see. However there is one thing bothering us a bit. Its a city (municipal) airport which is fine. It is receiving FAA funding like all the other airports. Periodically the FAA wants some changes, including now. That means the city will have to provide some matching money. But hardly a soul in the city values the airport. So for a FAA "proposed" $1M update, lets say the city needs to put in $100K (give or take). That's big money to a small city.

This is hypothetical but based on some fact: Lets say they decline the latest FAA proposal (which really seems more like a requirement or mandate). So the city stops getting the FAA money. Just the snow removal, mowing and electricity are probably enough to approach the cheap hangar rental revenue. But there are also some pressing expensive repairs such as blacktop fixes, etc. So they decide to close the airport.

Well the renters are the easiest to handle. All renters are month-to-month so they could announce 6-12 months in advance (to be nice) and close the rental hangars. Obviously they would shut off the power. There is no water or gas. They could drop the insurance too.

Its probably not to hard to shut down the AWOS, disconnect all the runway lighting, notam it closed and X out the runway.

But there is one remaining issue. There are leased hangars on the field. One lease was just granted (15yrs). The remaining hangars are all on a 99yrs/$1. The city has no love for the 99/1's. Of course we want to buy one of those. Given how they contracted (incorporated) individual hangars are transferrable and thus very appealing.

So can the city close an airport with active leases? Has this been done before? If so, how did they terminate and resolve those leases?
 
Realistically yes. Totally legal, maybe not. Measure 20 years the out from the last FAA grant and that’s your closure date. The City can fully reimburse the FAA for the grants, but usually unlikely given the cash outlay. Depends on the term of the leases and financial wear withal of the Tennant’s.

The legal process would take years to likely play out.
 
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What do the leases say? What does your state's real estate laws say about priorities and the rights of downstream lessees?
 
Nothing is guaranteed...worst case scenario: Meigs Field. More realistic situation: Santa Monica.
 
Sinistar said:
So for a FAA "proposed" $1M update, lets say the city needs to put in $100K (give or take). That's big money to a small city.
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Many communities look at the required federal match as easy money. They see the federal grant as a benefit to the community. For 10 cents on the dollar, they can get a federal investment in their community, providing work for locals. Not too many other grant programs out there cities can get that kind of bang for their buck.
 
How much money does the muni have?
 
Our city could careless about the city owned airport, we are in the boonies and actually in a different county than the city.
They will not lay out any matching funds or pay for any improvements or repairs. The airport association through gas sales and renting hangars that they own have payed all matching funds to the FAA including maintenance/up keep. We have been getting along just fine.
We have about 15 years until the city could think about closing us down due to the last FAA grant as stated by the airport manager, who knows if it is true or not, but I doubt they would do that even if the grants had not been taken.
 
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I suppose you could ask your airport’s governing board what they have to say.

And you could ask your state transportation department if they have any say in the matter.

As for the FAA, I asked a FSDO once, what does it take for a municipal airfield in my state to close permanently, if a city doesn’t want it any more, and the FSDO’s answer was that it’s the city’s decision, not the FAA’s. That’s for airports around here, maybe it’s different elsewhere, but that answer suggests to me that if a city can permanently shut down runways and aprons on its own call, then surely at the same time it can dispose of its hangars without the FAA’s blessings.
 
I have never heard of the FAA requiring an improvement. Typically the airport authority applies for a grant. If the airport closed prior to fulfillment of the hangar leases, the language in the lease would prevail and you would likely have to go to court for damages.
 
This just happened recently in my neighborhood...LINK

I recently passed on a hanger purchase because the municipality wouldn't add guaranteed renewal language to the lease...
 
I’d say if the existing folks with leases have any sense they’ll all get together and find a good law firm and let the muni know they arnt amused, bonus points if you can name individuals, when they know the vale of government can be pierced folks act much more respectful
 
Kind of answering several things at once.

I don't know how much the municple actually has but I do know they are not liking the amount their match would equate to and I think that is around $100k for a grant in the neighborhood of $1M.

I believe the last grant was either 7 or 8 years ago. I believe the city did the match to put in about 3400ft of taxiway (which is awesome!) and great for busy days and events. So if there is a 20yr clock perhaps it reset with that grant?

When I say proposal I mean the FAA wants a change on one approach end. Perhaps it's in response to the city asking for an improvement grant? It would mean tearing down their newest rental hangars (who thinks of this stuff) but the majority of the grant is to regrade and resurface everything around all the hangars after that teardown. And that is all because the previous grading for water was so bad the blacktop just crumbled from the water soaking underneath each spring. But I don't think the city wants to shell out the roughly $100k because in the end they have fewer hangars to rent, new blacktop to care for and hardly any leases. Of course they are their own worst enemy on leasing and just don't get it...if they were good about it many would build including us.

I believe they have requested a variance or exception to the removal of the building in the new approach zone but I still have not heard any official response.

Fortunately the leased hangars are outside this new keep out zone. Throw in the 99yr lease and they are very appealing. I will be looking at the lease carefully. One of the 99/1's is the lawyer who drafted up the lease and I see him often during EAA chapter meetings.

I see it this way. I do not want to offer any more than the estimated value × 80% which is the remaining percent of the lease. If I owned it and they closed the airport I would want at least that much back via legal action. In this case the hangar isn't all that fancy so our offer would be even lower.

They just recently granted the first new lease in over 10yrs...but only for 15yrs so we don't dare build under those short of terms. Another reason the 99 for $1 is so attractive.

I've got some research to do. If there is anything in the lease agreement regarding airport closure it should be obvious. If there is no airport closing consideration stated then it sure seems gray and potentially litigious.
 
midwestpa24 said:
Many communities look at the required federal match as easy money. They see the federal grant as a benefit to the community. For 10 cents on the dollar, they can get a federal investment in their community, providing work for locals. Not too many other grant programs out there cities can get that kind of bang for their buck.
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I don't think this city sees it the same way. They seem to only ask for Grant's when problems arise vs asking for larger improvements to grow the airport.
 
Clip4 said:
I have never heard of the FAA requiring an improvement. Typically the airport authority applies for a grant. If the airport closed prior to fulfillment of the hangar leases, the language in the lease would prevail and you would likely have to go to court for damages.
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Thanks for clarifying. In a previous post I mentioned that this whole thing probably started from a grant request vs a FAA mandate. Clearly the FAA wants the approach and cleared up but perhaps they never would have said a thing until the city asked for money.
 
Gilgamesh said:
This just happened recently in my neighborhood...LINK

I recently passed on a hanger purchase because the municipality wouldn't add guaranteed renewal language to the lease...
Click to expand...
Actually I wanted to click unlike but we dont have one. I had heard about Silver Lake but didnt realize that MNDOT closed it. Sucks. Thank god you didnt sign a lease and build.
 
"potentially litigious," yes. This is not the same but illustrative.

There was a privately owned public use airport in northern Colorado (Ft Collins Downtown for those who remember). The airport property was sold to developers who decided to close it - with a lot of controversy. A group of very unhappy adjacent property owners who had easements for taxiway and runway access filed suit in 2006 to enforce their rights.

Eleven years, a full trial to the Court (no jury), a bankruptcy, a foreclosure of the airport property, the death of one of the easement holders, and two appeals (the second one of which was never heard because the appealing party didn't meet deadlines) later...

Now you know a little why I asked those questions.
 
Perhaps try and raise part of the funds to lessen the blow to the city.

They just resurfaced our town airport and lit it up like a Christmas tree. I posted a thread on it. I drive by it several times a day. I haven't seen so many new planes using it since we moved here in 2016.

We're a tourism town. We have more Realtors and antique stores than any other types of businesses, it seems. If the town invested in the airport, it was a wise decision for our town and it will eventually pay off.

I've seen the future phases of the airport plan, they're ambitious, I don't know that they'll ever be able to justify that future expansion, unless GA gets back to its heyday when all theses old planes were built in the first place.
 
Gilgamesh said:
This just happened recently in my neighborhood...LINK

I recently passed on a hanger purchase because the municipality wouldn't add guaranteed renewal language to the lease...
Click to expand...

Sounds like a good decision by both parties.
 
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