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HomeMy WebLinkAbout13 - Appendix F - Airport Rules and RegulationsAppendix F Airport Rules and Regulations LPESBURG EXECUTIVE AIRPORT RULES, REGULATIONS & STANDARDS APPROVED BY TOWN COUNCIL: December 13, 2011 TABLE OF CONTENTS CHAPTER ONE General Provisions 4 Purpose 4 Introduction 4 Policy regarding the conduct of commercial aeronautical activities 4 Definitions 5 Minimum Standards 8 Airport Director 8 Special Events 8 Public Use 8 Common Use Areas 9 Vehicular Traffic and Parking 9 Advertising and Signs 9 Acceptance of Minimum Standards by Use 9 Operators to Keep Minimum Standards Available 10 CHAPTER TWO Aircraft Operation and Airport Traffic Rules and Regulations 11 General 11 Disabled and/or Derelict Aircraft 11 Ground Rules 12 Taxiing 13 Traffic Rules 14 Fire Regulations 14 Federal Sponsor Assurances 15 CHAPTER THREE Airport Business Activities: Temporary Commercial Operating Permits, Leases, Licenses and Concessions 16 Airport Business Activities 16 Temporary Commercial Operating Permit 16 Procedures 17 Leases 18 Applications for Lease 19 Virginia Department of Aviation Approval 19 Licenses 19 Action on Application for Leases, Licenses, Temporary Commercial Operating Permits or Concession Permits 19 Supporting Documents 20 Airport License and Leases are Non - Transferable 23 Effect on Existing Leases 23 2 FBO /Tenant Approval not Required 23 Operation Area 23 Complaints 24 Refuse 24 Acts of God 24 Penalties 24 War or National Emergency 24 Leases Subordinate to Government Lease 25 Lease Termination 25 Waiver of these Provisions 27 Lease Clauses 27 CHAPTER FOUR Minimum Standards for Aeronautical Activities 30 General Requirements 30 Content of Standards 30 Minimum Standards 31 Insurance Requirements for all Activities 31 FBOS: Fixed Base Operators 33 Commercial Aeronautical Operators 35 Airframe and Power Plant Repair 35 Avionics, or Instrument or Propeller Repair 37 Aircraft Charter, Air Carriers, and Air Taxi 38 Aircraft Sales 39 Aircraft Rental 40 Flight Training 42 Specialized Commercial Aeronautical Activities 43 Hangar Rental 45 Commercial Operators 46 Concessionaires 46 Flying Clubs 46 CHAPTER FIVE Minimum Standards for Facilities and Improvements 48 Review Procedures 48 Paved Areas 48 Grading, Drainage and Landscaping 50 Fuel Storage and Distribution 51 Hangars, Buildings and other Structures 52 Chemicals and Hazardous Materials 57 3 CHAPTER ONE I. GENERAL PROVISIONS a. PURPOSE i. The provisions in this document set forth the Rules, Regulations and Minimum Standards for the management and conduct of commercial and non - commercial aeronautical and other activities by individuals or organizations at Leesburg Executive Airport. These Rules, Regulations and Minimum Standards are hereinafter referred to as the "Minimum Standards ". b. INTRODUCTION Prudent and proper administration requires that regulations and standards be established to ensure that aeronautical activity at the Airport is conducted in the public interest and provides protection from irresponsible and unsafe operations. Minimum operation and design standards ensure that acceptable qualifications of participants, level and quality of service, and other conditions of those conducting aeronautical activities at the Airport are established. The requirement to impose standards on those proposing to conduct commercial aeronautical activities at a public airport provides protection to the public from irresponsible, unsafe or inadequate service. The adoption and enforcement of these standards ensures that operators are reasonably fit, willing and able to discharge both their service obligations to their patrons and their economic obligations to the airport community and thereby protect established commercial enterprises, the aviation user and the public. The standards established for any particular commercial aeronautical activity must be relevant to that activity, must be reasonable in scope, and will be applied objectively and uniformly. Standards thus established and applied promote economic stability by discouraging unqualified applicants and fostering the level of services desired by the public and the Leesburg Executive Airport. c. POLICY REGARDING THE CONDUCT OF COMMERCIAL AERONAUTICAL ACTIVITIES It is the policy of the Leesburg Executive Airport to extend the opportunity to engage in commercial aeronautical activities to any entity meeting its published standards for that activity and subject to availability of suitable 4 space at the Airport to conduct such activities. The Airport's Master Plan and Development Program provide the basis for determining whether suitable space is available. d. DEFINITIONS The definitions and rules of construction provided in Section 1 -2 of the Town Code shall apply to these Minimum Standards. Additionally, the following words and terms shall have the meaning indicated below, unless the context clearly requires otherwise: i. "Aircraft ": Aeronautical devices including, but not limited to powered aircraft, gliders, kites, helicopters, gyrocopters, parachuting, ground- effect machines and balloons. ii. "Aircraft Maintenance ": The repair, adjustment or inspection of aircraft. 1. Major Repairs - Major alterations to the airframe, power plant, propeller and accessories as defined in Part 43 of the Federal Aviation Regulations. 2. Minor Repairs - Normal, routine annual inspection with attendant maintenance, repair, calibration or adjustment or repair of aircraft and their accessories. iii. "Airport ": the Leesburg Executive Airport and all of the area, buildings, facilities and improvements within the exterior boundaries of such airport as it now exists or as it may hereafter be extended or enlarged. iv. "Airport Director ": the officer appointed pursuant to Section 6 -20 of the Town Code who is solely responsible for enforcement of the provisions of this document. Any appeal of a decision of the Airport Director is appropriately addressed to the Town Manager for review. v. "Airport Commission ": an advisory body created by Section 2 -223 of the Town Code. vi. "Building ": Includes the main portion of each structure, all projections or extensions there from and any additions or changes thereto, and shall include garages, outside platforms and docks, carports, canopies, eaves and porches. Paving; ground cover, fences, signs and landscaping shall not be included. vii. "Entity ": A person, firm, corporation, partnership formed for the purpose of conducting the proposed activity. 5 viii. "Equipment ": All machinery, together with the necessary supplies for the upkeep and maintenance and all tools and apparatus necessary to the proper construction and completion of the work. ix. "Exclusive Right ": A power, privilege, or other right excluding or debarring another from enjoying or exercising a like power, privilege or right. An exclusive right may be conferred either by express agreement, by imposition of unreasonable standards or requirements, or by any other means. Such a right conferred on one or more parties by excluding others from enjoying or exercising a similar right or rights would be an exclusive right. Federal laws specifically prohibit granting an exclusive right to conduct a commercial aeronautical activity on an Airport developed or improved with Federal funds. x. "FAA": the Federal Aviation Administration. xi. "FAR": Federal Aviation Regulations. xii. "FBO ": Fixed Base Operator. Any airport-based business that provides services as defined in the classes below. FBOs must lease space at the airport. All FBOs must obtain an FBO license from the Town and pay the applicable FBO license fees. 1. "Full Service Operator ": A class of FBO that provides a variety of services to aircraft owners, pilots and passengers. Full- service Operators must lease space at the airport. 2. "Commercial Aeronautical Operator ": A class of FBO which is an individual or company engaged in commercial activity at the airport which provides a service to the flying community and utilizes the airport runway and surrounding facilities on a regular basis. Commercial Aeronautical Operators must lease space at the airport. 3. "Commercial Operator ": A class of FBO which is an individual or company engaged in commercial activity at the airport related to aeronautical activity, but which does not utilize the runway or surrounding facilities on a regular basis. A Commercial Operator must lease space at the airport. 4. "Concessionaire ": An airport-based business which is an individual or company engaged in commercial activity at the airport that is not related to aeronautical activity such as: restaurants, gift shops, parking facilities and car rental companies. All concessionaires must lease space at the airport and enter into a Concessionaire Agreement with the Town. xiii. "Improvements ": All buildings, structures and facilities including pavement, fencing, signs and landscaping constructed, installed or placed on, under or above any leased area by or with the concurrence of a lessee. The Town must approve plans and specifications for all improvements for conformity with its building and construction standards. xiv. "Lease ": A contractual agreement between the Town and an entity granting a concession or otherwise authorizing the conduct of certain activities, which is in writing and enforceable by law. xv. "Leesburg Maneuvering Area ": A specified area or "cutout" on the Washington Aeronautical chart as depicted by magenta boundaries. xvi. "MSL" Mean Sea Level: "still water level" —the level of the sea with motions such as wind waves averaged out — averaged over a period of time such that changes in sea level due to tides are "averaged out ". xvii. Notice to Airmen "NOTAM" system: Time - critical aeronautical information which is of either a temporary nature or not sufficiently known in advance to permit publication on aeronautical charts or in other operational publications receives immediate dissemination via the National NOTAM system. xviii. "Repair Facility ": A facility utilized for the repair of aircraft to include airframes, power plants, propellers, radios, instruments, and accessories. Such facility will require Federal Aviation Administration certification and will be operated in accordance with pertinent Federal Aviation Administration Regulations. xix. "Sublease ": A lease granted by a lessee to another entity of all or part of the property. xx. "Temporary Commercial Operating Permit ": A permit issued by the Town to conduct business at the Airport on a temporary basis. xxi. "Town ": The Town of Leesburg and its Town Council (or designated body or administrator). xxii. "Tenant ": Any entity entering into a contractual relationship with the Town for space to conduct its business. xxiii. "Tie- Down ": A paved area suitable for parking and mooring of aircraft wherein suitable tie -down points have been located. xxiv. "IFR": Instrument Flight Rules. xxv. "VFR ": Visual Flight Rules. xxvi. "VMC ": Visual Meteorological Conditions xxvii. "DOAV ": Virginia Department of Aviation e. MINIMUM STANDARDS All aeronautical activities at the Airport, all operation and flying of aircraft at the Airport and all business and other activities at the Airport shall be conducted in conformity with these Minimum Standards, and all pertinent rules, regulations, orders and rulings of the FAA and the DOAV, as appropriate, which are made a part of these Minimum Standards by reference. In the event of any conflict between these Minimum Standards and any law, rule, regulation or order of any governmental agency cited in this section exercising the same or similar jurisdiction, the latter shall prevail. f. AIRPORT DIRECTOR g. The Airport Director is authorized to take all actions necessary for the handling, policing, protection and safeguarding of the public while present at the Airport, to regulate vehicular traffic at the Airport and to oversee all airport operations consistent with these Minimum Standards, and the Town and State Codes, including the power of arrest provided in Section 5.1 -21.1 of the Code of Virginia of 1950, as amended. SPECIAL EVENTS No special event, including but not limited to air shows, air races, fly -ins, skydiving, Young Eagles flights, Discovery flights or other similar events requiring the general use of the Airport, other than normal or routine airport traffic, shall be held unless a permit for same has been issued by the Town of Leesburg. Said permit shall specify the areas of the Airport authorized for such special use, dates, insurance requirements and such other terms and conditions as the Airport Director may require. h. PUBLIC USE The Airport shall be open for public use at all hours of the day, subject to regulations or restrictions due to weather, the conditions of the landing area, the presentation of special events and like causes, as may be determined by the Airport Director and revocation of the right of use, for violation of these Minimum Standards as herein provided. 8 i. COMMON USE AREAS J. All runways for landing and take -off; all runway, marker, guidance, signal and beacon lights used to guide operating aircraft; all apparatus or equipment for disseminating weather and wind information, for signaling, for radio - directional finding or for radio or other electrical communication and any other structure, equipment or mechanism having a similar purpose for guiding or controlling flight in the air or the landing and take -off of aircraft; and together with such aprons, ramps, turnoffs, transient tie -down areas and taxiways (unless otherwise noted) shall be considered common use areas available for use, in common, by all persons flying or operating aircraft on the Airport and shall be kept clear and available for aircraft traffic. No Full Service Operator, Commercial Aeronautical Operator, or Commercial Operator or other person shall use any common use areas for the permanent parking, storing or repairing of aircraft or for any other purpose other than the flying and operation of aircraft without the prior consent or authorization of the Airport Director. Common use designations may be changed from time to time by Airport Director in consultation with the Airport Commission. All such changes shall be noted on the common use area map herein referred to. The Town shall be advised of all such changes. VEHICULAR TRAFFIC AND PARKING The traffic laws provided in Chapter 32 of the Town Code shall apply to the streets, roads and vehicular parking areas at the Airport, unless otherwise provided by law. Except for fire - fighting equipment, ambulance and emergency vehicles, no person shall take or drive any vehicle on the Airport, other than on established streets, roads and vehicular parking facilities, unless permissions has been first obtained from the Airport Director. k. ADVERTISING AND SIGNS No signs or other advertising shall be placed or constructed upon the Airport, or any building or structure or improvement thereon without having first obtained a permit for it from the Town of Leesburg and permission from the Airport Director. The Airport Director shall refuse permission for such signs if he finds that such are undesirable, unnecessary or may create a safety hazard. Additionally, signs shall be subject to applicable Town Ordinance as well as these Minimum Standards. 1. ACCEPTANCE OF MINIMUM STANDARDS BY USE The use of the Airport or any of its facilities in any manner shall constitute an assumption by the user of these Minimum Standards and shall create an obligation on the part of the user to abide by and obey these Minimum Standards. Flight instructors shall have the duty to fully acquaint their students with these Minimum Standards and shall be responsible for the conduct of 9 students under their direction as will the airport tenants be responsible for acquainting their employees and customers with these Minimum Standards. m. OPERATORS TO KEEP MINIMUM STANDARDS AVAILABLE All persons licensed to do business on or conducting operations of any kind on the Airport shall keep a current copy of these Minimum Standards in their office or place of business and make them available to all persons. 10 CHAPTER TWO I. AIRCRAFT OPERATION AND AIRPORT TRAFFIC RULES AND REGULATIONS a. GENERAL i. Every person operating an aircraft shall comply with and operate such aircraft in conformity with these Minimum Standards, and all pertinent rules, regulations, orders and rulings of the FAA, DOAV and Virginia Aviation Board and other appropriate governmental agencies. ii. As an uncontrolled airport, all pilots of aircraft having radio equipment permitting two -way communications shall contact the Airport Unicom (122.975) to obtain airport advisory information when they are within the airport traffic area. All aircraft within a five -mile radius of the Airport should conform to these Minimum Standards. iii. In the event any aircraft is wrecked or damaged to the extent that it cannot be moved under its own power, the Airport Director shall be immediately notified. Subject to governmental investigations and inspections of the wreckage, the owner or pilot of the wrecked or damaged aircraft, or the owner's agent or legal representative shall, as soon as reasonably possible, obtain the necessary permission for removal of the aircraft and shall promptly remove such aircraft from all landing areas, taxiways, ramps, tie -down areas and all other aircraft movement areas, and place or store where designated by the Airport Director. No such wrecked or damaged aircraft shall be permitted to remain exposed to the general public on the Airport for more than 24 hours after the site has been released by all appropriate investigatory or regulatory authorities. In the event the owner of the aircraft fails for any reason to remove promptly the wrecked or damaged aircraft from the Airport as may be requested by the Airport Director, the Airport Director may cause the removal and storage of such wrecked or damaged aircraft at the expense of the aircraft owner. b. DISABLED AND /OR DERELICT AIRCRAFT i. Subject to compliance with appropriate FAR, the aircraft owner shall be responsible for the prompt removal of disabled and/or derelict aircraft and parts of such aircraft at the Airport as directed by the Airport Director or his authorized representative. Such aircraft, and any and all parts thereof, may be removed by the Director at the owner's or operator's expense and without liability for damage which may be incurred as a result of such removal. 11 ii. No Person shall park or store any aircraft in non - flyable condition on Airport property, including leased premises, for a period in excess of thirty (30) days, without written permission from the Director. iii. No Person shall store or retain aircraft parts or components being held as inventory anywhere on the Airport, other than in an enclosed, authorized facility, or in a manner approved by the Director, in writing. iv. Whenever any aircraft is parked, stored or left in non - flyable condition on the Airport in violation of the provisions of this Section, the Town shall so notify the owner or operator thereof by certified and regular mail, requiring removal of said aircraft within thirty (30) days of receipt of such notice. If the owner or operator is unknown or cannot be found, the Director shall conspicuously post and affix such notice to the said aircraft, requiring removal of said aircraft within thirty (30) days from date of posting. Upon failure of the owner or operator of said aircraft to remove said aircraft within the period provided, the Director shall cause the removal of such aircraft from the Airport and the access gate card will be revoked. All costs incurred by the Airport shall be recoverable against the owner or operator thereof. c. GROUND RULES i. No person shall park, store, tie down or leave any aircraft on any area of the Airport other than that prescribed by the Airport Director. ii. No aircraft shall be parked or stored at the Airport unless it is properly tied down and secured. Aircraft owners are solely responsible for parking and tying down their aircraft, including any special security measures required by weather conditions or other conditions at the Airport. Aircraft owners shall also be responsible for securing aircraft in a manner necessary to avoid damage to other aircraft or buildings at the Airport in the event of winds or other severe weather. Owners of all aircraft shall be held solely responsible for any damage or loss resulting from the failure of such owner or the pilot of such aircraft to comply with this standard. The Town's sole obligation, unless otherwise provided by any lease agreement, shall be the maintenance of the aircraft parking space, exclusive of tie -down ropes and grass surfaces. The Town will not guarantee grass areas to be suitable for aircraft tie - downs. Unless otherwise provided for in the lease agreement, the individual lease holders shall be responsible for maintaining (i.e. cutting grass, snow removal, etc) their leased areas. iii. A specific tie -down space shall be assigned by the Airport Director to each aircraft renting on a monthly basis. Separate areas shall be designated by the Airport Director for FBO aircraft and itinerant tie- 12 downs. No person shall take or use any aircraft anchoring or tie -down facilities when such facilities are already in actual use by or leased to another person. iv. No repairs to engines or oil changes shall be made in tie -down spaces or on any apron (except in designated areas). v. No aircraft engine shall be started on an aircraft unless a competent operator is in control of the aircraft and brakes have been set or the wheels have been set with blocks that are equipped with ropes or other suitable means for removing such blocks. vi. The engine shall be started, warmed up and run only in places designated for such purposes by the Airport Director. No aircraft engine shall be run -up unless the aircraft is in such a position that the propeller or jet blast clears all hangars, shops other buildings, persons, other aircraft and automobiles or vehicles in the area, and the flight path of landing aircraft. vii. Each entity shall be responsible for the removal of snow and ice from all its leased area and areas in which it is authorized to operate, and shall keep its leased areas in which it is authorized to operate free and clear of all weeds, rocks, debris and other material which is unsightly or could cause damage to aircraft, buildings, persons or vehicles as the result of aircraft engine operation. n. TAXIING i. All aircraft shall be taxied at a low and reasonable speed and, if not equipped with adequate brakes, shall be towed by a tractor. ii. Aircraft awaiting take -off shall stop at designated hold lines off the runway in use and in a position so as to have a direct view of aircraft approaching for a landing and shall give full right -of -way to such aircraft. iii. No person shall taxi an aircraft until he has ascertained that there will be no danger of collision with any person or object in the immediate area by visual inspection of the area and, when available, through information furnished by airport attendants. iv. Aircraft on the taxiway must stop before entering the runway and allow aircraft, which are exiting main runway at intersection or far end to the runway to clear the runway. Aircraft clearing the runway after landing have the right -of -way over aircraft on the taxiway preparing to enter the runway. 13 o. TRAFFIC RULES P. i. All operations of aircraft should be conducted in accordance with Title 14, Code of Federal Regulations (CFRs and SFARs) and the FAA Aeronautical Information Manual, with the following local variations noted: ii. The Leesburg Executive Airport is in Washington, DC Special Flight Rules Area (SFRA). As such, the FAA NOTAM must be followed for arrivals and departures to the Leesburg Maneuvering Area. iii. Runway 17 is designated as the `calm wind' runway and shall be used whenever practical. When the winds are 3 knots or less, pilots should prioritize the use of Runway 17 to accommodate noise - sensitive areas to the north of the field. iv. All aircraft operating in the traffic pattern should remain clear of the Dulles Airport Class B airspace and maintain a pattern of left hand turns. v. All pilots shall make position reports in the pattern in consonance with the AIM and should refrain from using local landmarks EXCEPT for the blue water towers. That position report should be phrased as `blue water towers three miles northeast' to assist transient pilots in the pattern. In all circumstances, avoid using any other local landmark. vi. Touch - and -go operations are permitted at such times as may be designated by the Airport Director. vii. All IFR approaches in VMC should be terminated before entering the pattern area. FIRE REGULATIONS The following shall apply, except where either insurance requirements or applicable codes differ, in which case the latter shall prevail. i. No aircraft shall be fueled or drained while its engine is running, or while in a hangar or other enclosed place. Fueling shall be done in such a manner and with such equipment that adequate connections for grounding of electricity shall be continuously maintained during such time. ii. Any FBO or Commercial Aeronautical Operator providing fuel service shall provide service to individual aircraft with trained personnel employed by the FBO or Commercial Aeronautical Operator. Individual aircraft operators shall not use FBO or Commercial Aeronautical Operator equipment to fuel their own aircraft. 14 Equipment, operation and maintenance of fueling facilities shall be in accordance with National Fire Protection Association guidelines and recommendation as published in NFPA 10, 30, 70, 77, 385, 409, 415 & 418. FAA Advisory Circular 150/5230 -3 Fire Prevention During Aircraft Fueling Operations and 150/5230 -4 Aircraft Fuel Storage, Handling and Dispensing On Airports are incorporated by reference. iii. The cleaning of power plants or other parts of aircraft shall not be carried on in any hangar, except with non - flammable substances. If flammable liquids shall be employed for this purpose, the operation shall be carried on in the open air. iv. All persons using in any way the airport area or the facilities of the Airport shall exercise the utmost care to guard against fire and injury to persons or property. v. All hangar and shop floors shall be kept clean and free from oil, gas and other flammable substances. No volatile flammable solvent shall be used for cleaning floors. No rags soiled with flammable substances shall be kept or stored in any building on the Airport in such a manner as to create any fire hazard. vi. No person shall smoke or ignite any matches, flares, lighters or other objects which produce an open flame within a hangar, shop, building or structure in which any aircraft is or may be stored, or within 50 feet of any aircraft or any fueling facilities. FEDERAL SPONSOR ASSURANCES i. Nothing contained in these Minimum Standards shall be interpreted in any manner so as to violate any FAA/Sponsor Assurances for Airport Improvement Program (AIP) grant funding. ii. Nothing contained in these Minimum Standards shall be interpreted in any manner so as to violate any DOAV /Sponsor Assurances for airport grant funding. iii. Applicable sections of the PART V ASSURANCES - AIRPORT AND PLANNING AGENCY SPONSORS shall be considered a part of these Minimum Standards by reference. CHAPTER THREE I. AIRPORT BUSINESS ACTIVITIES: TEMPORARY COMMERCIAL OPERATING PERMITS, LEASES, LICENSES AND CONCESSIONS a. AIRPORT BUSINESS ACTIVITIES Subject to applicable orders, certificates or permits of the FAA, or its successor, grant agreements with the FAA and the laws of the Commonwealth of Virginia, grant agreements with the Commonwealth of Virginia, acting by and through the DOAV, no person shall use the Airport or any portion thereof or any of its improvements or facilities for commercial, business or aeronautical activities who has not first complied with these Minimum Standards and obtained the consent and all required permits and licenses for such activities from the Town and entered into such written leases and other agreements prescribed by the Town or agreed upon by the Town and such person. Notwithstanding any other provision of these Minimum Standards where a conflict exists between these Minimum Standards and any lease agreement now or hereafter approved by the Town, the requirements of the latter shall prevail. Applicants for leases, licenses, permits or concession agreements will specify the activities for which they desire a lease, license, permit or concession agreement. Any person or entity which has been issued a license or permit or entered into a lease agreement or concession agreement, shall conduct only those services granted by the lease, license, permit or agreement. Licenses and permits must be renewed annually, and license fees and permit fees are due on or before July 1 of each fiscal year. The terms of the lease agreement shall govern the terms, fees and conditions of each lease entered into between and entity and the Town. Any entity that conducts a commercial business at the Airport shall have a business license issued by the Town. Additionally, any entity that conducts a commercial business at the Airport shall have a Fixed Base Operator License issued by the Town, or a Temporary Commercial Operating Permit issued by the Town, prior to conducting any commercial business at the Airport. b. TEMPORARY COMMERCIAL OPERATING PERMIT A Temporary Commercial Operating Permit shall be obtained by any person or company that wishes to conduct business on the Airport but which does not lease space at the Airport. This category of permits applies to, but is not limited to, food vendors and mechanics. 16 i. PROCEDURES: 1. The Town may issue a Temporary Commercial Operating Permit only upon receipt and approval of a signed application from the commercial entity on a form approved by the Airport Director containing the following information: 2. Name of Entity, address, phone number, type of business, type and description of vehicles to be operated, if any, on Airport property. 3. Name of principal(s) of the applying Entity. 4. Name, address and job title of the local manager, if different from the principal(s). 5. Provide adequate insurance and a certificate of insurance, naming the Town, its employees and agents as additional insured. ii. The submission of such application for a Temporary Commercial Operating Permit shall constitute an express understanding and agreement by such applicant that he /she shall: 1. Pay all Permit fees specified. 2. Covenant to obey and adhere to all security requirements, Rules, Regulations and Minimum Standards of the Airport now existing or hereafter adopted. 3. Indemnify and hold harmless the Airport and the Town, its employees and agents from any claim whatsoever arising from the applicant's business operations on Airport property. 4. Provide proof of a Town of Leesburg business license and proof of insurance coverage not less than specified in Appendix B. iii. In the event a Temporary Commercial Operating Permit is approved and there are subsequent changes in the facts or circumstances reflected on the application, the Permittee is required to file a written statement notifying the Director of the change within ten (10) calendar days from the date such change occurs. iv. Within thirty (30) calendar days after the application for a Temporary Commercial Operating Permit has been submitted to the Town, the 17 application will either be approved or denied. In the event the application is denied, the Director shall specify in writing the grounds for denial on behalf of the Town. The applicant shall have the right to appeal to the Town Manager in writing. The Town Manager shall issue a written determination to the Applicant as soon as practicable. The Town Manager may consult with the Airport Director and /or the applicant, if the Town Manager so desires. v. A Temporary Commercial Operating Permit may be revoked by the Director for cause upon five (5) calendar day written notice to the Permittee. Such notice shall be either hand - delivered or mailed by certified mail and regular mail to the address stated on the application. Such revocations are subject to an appeal to the Town Manager. The Town Manager shall issue a written determination to the Applicant as soon as practicable. The Town Manager may consult with the Airport Director and /or the applicant, if the Town Manager so desires. Causes for revocation include, but are not limited to: 1. Breach of any Agreement entered into with the Airport. 2. Failure to make timely payment of any fees, fines, or other moneys due to the Airport. 3. Violation of any rule, regulation, security requirement, or Minimum Standard of the Airport now existing or hereafter adopted. 4. Any act or omission of the Permittee adversely affecting the Airport operations or posing a danger to the public health, safety, or welfare. c. LEASES Applications for leases of ground on the Airport, (not to include tie -down leases) or for permission to carry on any commercial, business or aeronautical activity at the Airport, which do not fall within the terms of Section15.2 -2100, et seq., of the Code of Virginia, shall be made using Town forms. The Town shall, as soon as practicable, refer such application to the Airport Commission for review. The Airport Commission may, if it deems advisable, hold a public hearing upon receipt of the application. The applicant shall submit all information and material necessary or requested by the Airport Director to establish to the satisfaction of the Town that the applicant can qualify and will comply with these Minimum Standards. The application shall contain a statement of the names of every party owning an interest in the business, those 18 who will be managing the business, the sole proprietor or every partner of the partnership, or each director and officer of the corporation as the case may be, and such application shall be signed by such persons who shall have authority to do so under the laws of the Commonwealth of Virginia. The Town shall take such action as it deems appropriate, which may include acceptance or rejection, or denial or modification of such application. All lessees shall be provided with emergency contact information in the event that an emergency occurs outside of regular business hours. d. APPLICATIONS FOR LEASE All leases for ground and office space on the Airport are subject to the Virginia Public Procurement Act set forth in Section 2.2 -4300 et seq., Code of Virginia of 1950, as amended. e. VIRGINIA DEPARTMENT OF AVIATION APPROVAL All lease agreements on the Airport shall be reviewed and approved by the Virginia Department of Aviation in accordance with Section 5.1 -40, et seq., of the Code of Virginia of 1950, as amended. f. LICENSES g. All Fixed Based Operators must apply and obtain a Fixed Base Operator ( "FBO ") License from the Town in addition to a Business, Professional and Occupational License ("BPOL") before operating at the Airport, using Town supplied forms. ACTION ON APPLICATION FOR LEASES, LICENSES, TEMPORARY COMMERCIAL OPERATING PERMITS OR CONCESSION PERMITS The Town may deny any application or reject any bid or proposal as the case may be, if, in its opinion, it finds any one or more of the following: i. The applicant for any reason does not meet the qualification, standards and requirements established by these Minimum Standards; or ii. The applicant's proposed operations or construction will create a safety hazard on the Airport; or iii. The granting of the application will require the Town to spend Town funds, or to supply labor or materials in connection with the proposed operations to an extent which the Town is unwilling to enter into such arrangement; or the operation will result in a financial loss to the Town; or iv. There is no appropriate, adequate or available space or building on the 19 Airport to accommodate the activity of the applicant at the time of the applications; or v. The proposed operation, airport development or construction does not comply with the Master Plan of the Airport; or vi. The development or use of the area requested by the applicant will result in depriving existing operators of portions of the area in which they are operating; or will result in a congestion of aircraft or buildings; or will result in unduly interfering with the operations of any present FBO, commercial aeronautical operator or commercial operator on the Airport through problems in connection with aircraft traffic or service, or preventing free access to the operator's area; or vii. Any party applying, or interested in the business, has supplied the Airport Director with any false information or has misrepresented any material fact in his application or in supporting documents; or has failed to make full disclosure on his application or in supporting documents; or viii. Any party applying, or interested in the business, has defaulted in the performance of any lease or other agreement with the Town; or ix. Any party applying, or interested in the business, has a credit report which contains derogatory information and does not appear to be a person of satisfactory business responsibility and reputation; or x. The applicant does not appear to have, or have access to the operating funds necessary to conduct the proposed operation for a minimum period of six months; or xi. Any party applying or interested in the business has been convicted of any crime or violation of any Town ordinance of such a nature that it indicates to the Town that the applicant would not be a desirable operator on the Airport. Nothing contained herein shall be construed to prohibit the Town from granting or denying, for any reason it deems sufficient, any application to do business on the Airport for the purpose of selling, furnishing or establishing non - aviation products and supplies or any service or business of a non - aeronautical nature, or the application by a person for an area on the Airport for the personal non - profit use of such person as approved by the DOAV. h. SUPPORTING DOCUMENTS i. Applicants shall furnish evidence of organizational and financial capability to provide the proposed activities as may be requested by the Town. 20 ii. All applicants shall submit the following supporting documents to the Town, together with such other documents and information as may be requested by the Town: 1. A current financial statement prepared or certified by an independent certified public accountant, and certified by the chief financial officer(s) of the applicant, or by the proprietor. 2. A written listing of the assets owned or being purchased, which will be used in the business on the Airport. 3. A current credit report covering all areas in which the applicant has done business during the last ten years. 4. A written authorization for the FAA and all aviation or aeronautic commissions, administrators, or departments of all states in which the applicant has engaged in aviation business to supply the Town with all information in their files relating to the applicant or his operation. The applicant shall execute such forms, releases and discharges as may be requested by any of these agencies. iii. No person may conduct commercial aeronautical activities at the Airport until an agreement, license or permit, incorporating the applicable standards set forth herein, is approved by the Town, which may include establishing airport space lease terms, rental amounts and other terms and conditions required by the Town; has met the qualifications, standards and requirements of these Minimum Standards; and has paid the required fees and received an business license from the Town. Before any person is issued a Temporary Commercial Operator's Permit, he shall pay to the Town the permit fee, except that such fee may be waived for any government or governmental agency or department or person performing non - profit public services to the aircraft industry, or performing air search and rescue operations, or performing fire prevention or fire fighting operations. iv. Each Full- Service Operator, Commercial Aeronautical Operator or Commercial Operator (hereinafter referred to as "operator ") approved shall enter into an agreement with the Town which includes an agreement on the part of the operator to accept, be bound by, comply with and conduct its business operations in accordance with these Minimum Standards and to agree that the license and authority to carry on business at the Airport shall be subject to the terms and conditions set out in these Minimum Standards and the revocation or termination thereof as herein provided. v. Unless otherwise provided in a lease agreement with the Town, the operator shall, at its own expense, provide, construct, install, equip and maintain all utilities, buildings, structures, ramps, tie -down areas, taxi- ways, fences and all other facilities and improvements requested or approved by the Town as being advisable and necessary for the operator to carry on the activities or services authorized by the Town and Airport Commission. Facility maintenance shall include maintaining all grassed areas (i.e. cutting grass) and all snow removal. The Town may, at its discretion, provide Town assistance in the development of the operation area. vi. The operator shall promptly pay, when due, all charges for water, sewer, power, telephone service and all other utilities and services supplied to his operation at the Airport; and all wages or salaries and all rentals, fees and payments payable to the Town. vii. Unless otherwise provided by the Town or Airport Commission, all operations of the operator shall be conducted on an area of sufficient size to accommodate all services for which the operator is licensed, allowing for future growth and additional services as contemplated by the Town of Leesburg, or the applicant, at the time of application, to the extent, however, that space is available at the Airport. The operator shall carry on its business operations strictly within the areas assigned it by the Town or Airport Director and its operations shall not in any way interfere with: operations of the other operator's; agencies or other businesses operating on the Airport; the use of the Airport by the general public; or any common use areas. The operator shall not use any common use areas except as authorized by these Minimum Standards or the Airport Director. viii. For an operator to qualify for a license, it must have available sufficient operating funds to conduct the proposed business for a period of at least six (6) months. ix. An operator shall cooperate with the Airport Commission and the Airport Director in the operation, management and control of the Airport and shall do all things reasonable to advance or promote the Airport and aeronautical activities thereon and to develop the Airport into an attractive, efficient and modern facility. x. The operator agrees to indemnify, defend, and save the Town, its authorized agents, officers, representatives and employees from and against any and all actions, penalties, liability, claims, demands, damages, or loss resulting from claims or court actions, whether civil, criminal or in equity, and arising directly or indirectly out of acts of omissions of the operator, its agents, employees, servants, guests, or business visitors. xi. To guarantee performance of paragraph above, the operator shall secure, at its expense, public liability and property damage insurance on which the Town shall be named as an additional insured. Such policies of insurance shall be maintained in full force and effect during all terms of existing leases, agreements or business licenses or renewals or extensions thereof. Such policies shall be in minimum amounts, as specified herein in the Minimum Standards for each category of aeronautical activity, and shall be placed with a reputable company approved by the Town. Copies of all such policies of insurance shall be delivered to the Airport Director and shall be held for the benefit of the parties as their respective interests may appear. The amounts of said insurance shall not be deemed a limitation on the operator's liability to the Town and if the Town or any of its authorized agents, officers, representatives or employees becomes liable for an amount in excess of the insurance, the operator will save and hold them harmless for the whole thereof. i. AIRPORT LICENSE AND LEASES ARE NON - TRANSFERABLE J. No right, privilege, permit or license to do business at the Airport, or any lease of any area of the Airport or a part thereof shall be assigned, sold or otherwise transferred or conveyed in whole or in part without the prior express written consent of the Town. No lease, or portion thereof, may be assigned or sublet without prior approval of the Town and all assignees or sub - leases as approved by the Town shall comply with these Minimum Standards. EFFECT ON EXISTING LEASES Existing leases shall be required to uphold those standards on which their original leases were contingent. The Airport Director shall attempt to amend all existing leases within a reasonable time to ensure that these Minimum Standards are adhered to by the tenant. All new leases, new lease agreements and lease renewals entered into at the Airport after adoption of these Minimum Standards shall be required to comply with these Minimum Standards. k. FBO / TENANT APPROVAL NOT REQUIRED The Town may, without the consent or approval of any FBO or other person licensed to do business or use part of the Airport, make changes in the Master Plan of the Airport and its planning and policies in connection with the development of the Airport. 1. OPERATION AREA No person authorized to operate or conduct business activities at the Airport shall do so on any area except those specified by the lease agreement, or approved by the Airport Commission. 23 m. COMPLAINTS All complaints against any operator for violation of these Minimum Standards shall be filed with the Airport Director and made in writing, signed by the party submitting the complaint and specifying dates, times and witnesses, if any. The Airport Director shall forward such correspondence to the Airport Commission as soon as practicable. n. REFUSE No person shall throw, dump or deposit any waste, refuse or garbage on the Airport. All waste, refuse or garbage shall be placed and kept in closed garbage cans or containers (i.e. commercial dumpsters) and all operating areas shall be kept in a safe, neat, clean and orderly manner at all times and in such a manner as to minimize any hazards. o. ACTS OF GOD P. q. Nothing contained in these rules and regulations shall be constructed as requiring the Town to maintain, repair, restore or replace any structure, improvement or facility which is substantially damaged or destroyed due to an act of God or other condition or circumstance beyond the control of the Town. PENALTIES In addition to any penalties otherwise provided by Town ordinance, law, the Virginia Department of Aviation or the Federal Aviation Regulations, and all other rules and regulations and the FAA, any person violating these Minimum Standards may be promptly removed or ejected, either temporarily or permanently, from the Airport by the Airport Director. The Town Manager may hear and decide appeals from the persons so removed in accordance with this chapter. The Airport Director shall, in writing, within seven days of any such removal or ejection, render to the person removed or ejected under this section, a letter to his last known mailing address delineating the specific violation of these Minimum Standards which necessitated such removal. The Town Manager shall hear appeals submitted by any person or persons so removed or ejected after receipt of such letter from the Airport Director. WAR OR NATIONAL EMERGENCY During time of war or national emergency, the Town shall have the right to lease the Airport, or the landing area, or any part thereof to the United States Government for military or naval use, and, any license or authority granted under these rules and any lease and agreement executed pursuant hereto shall be subject to such government lease and the provisions of the government lease shall control insofar as they are inconsistent with the said operators' agreement, lease or authority. 24 r. LEASES SUBORDINATE TO GOVERNMENT LEASE Any license, authority, lease or agreement entered into pursuant to these regulations shall be subject and subordinate to the provisions of any existing or future agreement between the Town and the Commonwealth of Virginia or the United States, relative to the operation or the maintenance of the Airport, the execution of which has been or may be required as a conditioned precedent to the expenditure of federal funds for the development of the Airport. s. LEASE TERMINATION The Town may, at its discretion and with 30 days notice, terminate any lease or other agreement authorizing the operator to conduct any services or businesses at the Airport, which said termination shall automatically revoke the operator's license, for any cause or reason provided in these rules and regulations, or by the law, and in addition thereto, upon the happening of any one or more of the following: i. Filing of a petition voluntarily or involuntarily, for the adjudication of the operator as bankrupt. ii. The making by the operator of any general assignment for the benefit of creditors. iii. The abandonment or discontinuance of any permitted operation at the Airport by the operator or the failure to conduct them on a full time basis without the prior approval of the Town and the Airport Commission. iv. The failure of the operator to remedy any default or breach of violations by it its personnel in keeping, observing, performing, and complying with these Minimum Standards and the terms, covenants and conditions in any lease or agreement entered into pursuant hereto on the part of the operator to be performed, kept or preserved, within 30 days from the date written notice from the Airport Manager has been mailed or delivered to the place of business of the FBO at the Airport. v. The failure to promptly pay to the Town, when due, all rents, charges, fees and other payments which are payable to the Town by the operator. vi. The operator, or any partner, officer, director, employee or agent thereof commits any of the following violations: 1. Violates any of these Minimum Standards; or 25 2. Engages in unsafe or abnormal or reckless practices in the operation of an aircraft on or in the vicinity of the Airport, which creates a hazard to the safety of other airport users, other aircraft, or the general public, or endangers property, or which could, if an emergency developed result in causing personal injuries or death to a person or damage to property; or operates the business of the operator in such a fashion as to create a safety hazard on the Airport for other airport users, aircraft or property at the Airport, the general public or the Airport, or any pilots, students or passengers. 3. The discovery that the operator, through its application, supporting documents, statements before the Airport Commission or Town, has misrepresented, misstated, falsified, or failed to make full disclosure of any information related to its application for an operator license or lease agreement with the Town. vii. In the event of such termination, the operator shall forthwith peaceably vacate the Airport and surrender possession of the premises to the Town and cease all business operations at the Airport. Should the operator fail to make such surrender, the Town shall have the right at once and without further notice to the operator, to enter and take full possession of the space occupied by the operator at the Airport by force or otherwise, and with or without legal process to expel, oust and remove any and all parties and any and all goods and chattels not belonging to the Town that may be found within or upon the same at the expense of the operator hereunder shall cease, and the operator shall immediately vacate any space occupied by it under this agreement or any lease or leases and shall make no claim of any kind whatsoever against the Town, its agents or representatives by reason of such termination or any act incident thereto. viii. In addition to all other rights and remedies provided in these Minimum Standards, the Town shall have any and all other rights and remedies in law or in equity, including the equitable remedy of injunction, to enforce these rules and regulations, to obtain compliance herewith and to impose the penalties herein provided. ix. To the extent necessary to protect the rights and interest of the Town or to investigate compliance with the terms of these rules and regulations, Airport Director or any authorized agent of the Town shall have the right to inspect at all reasonable times all airport premises together with all structures or improvements and all aircraft equipment and all licenses and registrations. x. Each operator shall be responsible for the removal of snow and ice 26 from all its leased area and areas in which it is authorized to operate, and shall keep its leased areas and areas in which it is authorized to operate free and clear of all weeds, rocks, debris and other material which is unsightly or could cause damage to aircraft, buildings, persons or vehicles as the result of aircraft engine operation. xi. The operator shall park and store the aircraft used in its operations and its customers' aircraft on its assigned area only, unless arrangements for such parking with another operator, or the Airport Director are made. t. WAIVER OF THESE PROVISIONS The Town Council may in its discretion, waive all or any portion of these Minimum Standards for the benefit of any government or governmental agency performing non - profit public services to the aircraft industry, or performing air search and rescue operations, or performing fire prevention or fire fighting operations, but only to the extent permitted by the rules of the FAA and the laws of the Commonwealth of Virginia. u. LEASE CLAUSES The following clauses will be included in all lease and concession agreements authorizing commercial aeronautical activities at the Airport: i. In addition to the premises specifically designated for its exclusive use, this Agreement grants lessee the non - exclusive right to use the airfield and associated operational areas in common with others so authorized, which right shall be exercised in accordance with the laws of the United States of America and the Commonwealth of Virginia, the rules and regulations promulgated by their authority with reference to aviation and air navigation, and all pertinent directives, rules and regulations of the Town of Leesburg. ii. Lessee shall keep and maintain at the Airport, or at such other place as may be approved in writing by the Airport Director, true and accurate books and records of its operations under the terms of any Agreement, in a form satisfactory to the Commission. Such books and records as well as certified financial statements, reports of any external audits prepared for lessee and its income tax return shall be made available to the Airport Director. Such books and records as well as certified financial statements, reports and any external audits prepared for lessee and its income tax return shall be made available to the Airport Director or to the Town's independent auditors, at the Airport, for inspection and copying at reasonable business hours during the term of any Agreement and for two (2) years thereafter. iii. Lessee shall furnish its services on a fair, reasonable, and non- 27 discriminatory basis to all its customers at the Airport and shall file a rate schedule for services provided, with the Airport Director. iv. Lessee shall maintain at its own expense all necessary permits and licenses required in the conduct of its business at the Airport. v. Lessee shall at all times retain qualified and competent personnel to conduct its authorized activities and said personnel shall be authorized to represent and act for lessee. vi. Lessee shall observe and obey all laws, ordinances, rules and regulations of the United States and of the Commonwealth of Virginia, Loudoun County and the Town of Leesburg which may be applicable to its operations at the Airport, and shall make no unlawful or offensive use of the leased premises. vii. Lessee shall bear all costs of its operation at the Airport and shall pay, in addition to the concession fees and payments herein, all other costs connected with the operation of said business including, but not limited to, insurance and taxes. Lessee shall be responsible for payment of such Town lease taxes as may be applicable. viii. Lessee shall provide the Airport Director a schedule of the hours of operation that lessee will be open to the public and the names and telephone numbers of company officials who shall be available at all hours of company's operations at the Airport to perform required management functions. ix. Lessee shall conform to all applicable safety, health, and sanitary codes and agrees to cooperate with the Town in its Fire Prevention efforts and to provide for the participation of its employees when Fire Prevention and Emergency training is conducted by the Town of Leesburg. x. Lessee is and shall be deemed to be an independent contractor in the conduct of its business and activities hereunder, and shall be responsible for all persons for its acts of omission or commission and the Town shall in no way be responsible therefore. In the use of the Airport lessee shall indemnify and save harmless the Town of Leesburg, its agents and employees, from any all liability that may proximately result because of any negligence on the part of lessee's officers, agents, or employees. xi. Lessee shall not discriminate in any manner against any employee or applicant for employment because of political or religious opinion or affiliation, sex, race, creed, color or national origin; and further, lessee shall include a similar clause in all subcontracts, except subcontractors for standard commercial supplies or raw materials. 28 xii. Lessee shall notify the Airport Director if it intends to base, or regularly service, any aircraft or service vehicles (i.e. fueling tenders /trucks) whose weight exceeds the design strength of the pavement utilized by the vehicle's operations. Notice shall be given at least 60 days prior to the commencement of operations. The Airport Director may require the lessee to make improvements necessary to accommodate these larger wheel loadings. xiii. Lessee shall cooperate and respond to questionnaires and inquiries by the FAA, DOAV and Town. xiv. Minority Business Enterprise Clauses - The following provision will be included in all leases: 1. The lessee assures that it will undertake an affirmative action program as required by 14 CFR 152, Subpart E, to insure that no person shall on the grounds of race, creed, color, national origin or sex be excluded from participating in any employment activities covered in 14 CFR Part 152, Subpart E. 2. The lessee assures that no person shall be excluded on these grounds from participating in or receiving the services or benefits of any program or activity covered by this subpart. 3. The lessee assures that it will require that its covered sub organizations provide assurances to them that they similarly will undertake affirmative action programs and those they will require assurances from their sub - organizations, as required by that subpart. CHAPTER FOUR I. MINIMUM STANDARDS FOR AERONAUTICAL ACTIVITIES These Minimum Standards have been developed to establish requirements for specific services, which may be provided at Leesburg Executive Airport. a. GENERAL REQUIREMENTS i. The minimum space requirements stipulated herein may be wholly or partially satisfied within suitable existing or planned structures at the Airport either through a lease of such space from the Town or a sublease of such space with the permission of the Town. ii. Preliminary plans and specifications for construction of any improvements required to satisfy these Minimum Standards shall be approved in writing by the Commission and the Town prior to formalization of a lease with the applicant. iii. All persons required herein to possess FAA and Commonwealth of Virginia licenses; certificates and ratings shall maintain the currency of such licenses, certificates and ratings. iv. With the exception of authorized repair facilities, lessees shall be authorized to conduct routine minor maintenance on their own aircraft only in buildings that meet applicable Minimum Standards detailed in this document. Authorized Owner or Routine Maintenance for the purpose of this paragraph is defined as maintenance that can be performed with ordinary hand tools and which can be performed by an owner not holding a FAA Airframe & Powerplant license in accordance with FAR Part 43. Owners that hold a FAA Airframe and Powerplant license may perform maintenance on their aircraft only if sufficient areas exist and are designated for such maintenance by the Airport Director. v. The requirement to provide paved ramp tie -down facilities may be waived by the Town if in its sole discretion they conclude that construction of such facilities for the common use of operators would better provide for the conduct of related operations. vi. If constructing the facility, handicapped parking shall be provided as required by local ordinance in addition to each individual activity minimum - parking requirement. b. CONTENT OF STANDARDS Although a financial commitment is a prime concern in establishing standards 30 for a potential commercial operator, other elements are equally important and are incorporated into the standards for commercial aeronautical activities. These include: i. Suitable space, improvements or facilities. ii. Adequate fixtures and equipment. iii. Adequate staff of employees with skills, licenses and certifications appropriate to the proposed activities. iv. Specified hours of operation. v. Compliance with safety, health and sanitary codes. vi. Evidence of financial stability and good credit. vii. Minimum levels of insurance and liability coverage. c. MINIMUM STANDARDS xv. The following standards have been developed after consideration of the above elements with special attention to their applicability at Leesburg Executive Airport. The standards set forth are applicable to the specific commercial aeronautical activity or combination of activities addressed and must be met by any applicant desiring to conduct such activities at the Airport. xvi. The standards set forth herein are the minimum which the Town will require in agreements authorizing commercial aeronautical activities, and unless specifically limited, do not preclude the applicant from seeking greater operating authority. xvii. Nothing contained in these Minimum Standards is intended to preclude the Town from requiring additional or different terms or conditions for the conduct of a proposed commercial aeronautical activity which may be reasonable or expedient in the opinion of the Town. d. INSURANCE REQUIREMENTS FOR ALL ACTIVITIES All lessees shall procure and maintain as a minimum the insurance as described below. i. Comprehensive General Liability: including products and completed operations: $1,000,000.00 combined single limit. ii. Hangar Keepers Legal Liability (if applicable): $ 250,000.00 each 31 aircraft $500,000.00 each occurrence iii. Aircraft Liability (if applicable): $2,000,000.00 combined single limit including passengers iv. Automobile Liability (if applicable): $2,000,000.00 each accident. v. Workers Compensation: as required by law vi. Employer's Liability (if applicable): $100,000.00 limits of liability. The Town of Leesburg is to be included as an additional insured in A (Comprehensive General Liability) and B (Hangars Keepers Legal Liability) above with a 10 day notice of cancellation. II. FBOS: FIXED BASE OPERATORS a. FULL - SERVICE OPERATORS An airport-based business that provides a variety of services to aircraft owners, pilots and passengers. Full- Service Operators must lease space at the airport. i. MINIMUM STANDARDS A. GROUND SPACE AND IMPROVEMENTS: a. Lessee shall lease from the Town an area of land on which shall exist or be erected a hangar -type building (5,000 S.F. minimum) to provide: 1) sufficient hangar space for airframe and power plant repair services (1,000 S.F. minimum), and if contemplated, to include a segregated painting area (500 S.F. minimum) meeting local and State industrial code requirements; 2) hangar(s) or additional space (5,000 S.F. minimum) within the above mentioned hangar sufficient to store 2 aircraft; and 3) adequate office and customer facilities with a minimum of 500 square feet with sufficient accommodations for passengers and crew of transient aircraft and visitors, to include heating and air conditioning, sanitary restrooms and public telephone. b. Lessee shall provide a paved aircraft apron (2,500 S.F.) within the leased area to accommodate movement of aircraft from its facility to the taxiway complex. c. Lessee shall provide or lease above - ground fuel storage tanks at the Airport which will maintain an adequate supply of fuel of the grades required by the aviation users at the Airport on -hand at all times. Above - ground fuel storage tanks of at least 12,000 - gallon storage capacity shall be located in approved areas and fuel delivered into aircraft by truck (fueler) by trained personnel employed by the FBO providing the service. Individual aircraft operators shall not use FBO equipment to fuel aircraft. Any FBO providing fuel service shall provide service to individual aircraft with trained personnel employed by the FBO. d. If constructing the facility, the lessee shall provide: i. Adequate paved customer auto parking space 33 (10 spaces minimum) and a paved walkway to accommodate pedestrian access to its facility ii. Employee spaces shall also be provided (one space per employee shift). e. Equipment, operation and maintenance of the fueling facilities shall be in accordance with National Fire Protection Association recommendations as published in NFPA 10, 30, 70, 77, 385, 409, 415, & 418. f. Equipment, operation and maintenance of the fueling facilities shall be in accordance with applicable Regulations for the Control and Abatement of Air Pollution, the State Water Control Board, and the Environmental Protection Agency Resource Conservation and Recovery Act. Lessee shall be responsible for compliance with all applicable regulations including all reporting requirements. ii. SCOPE OF SERVICE: A. Lessee shall provide aviation fuel and oil dispensing service during the required operating hours, if leasee provides fuel dispensing services. Such services will be available to customers upon arrival or request in a reasonable amount of time. B. Lessee shall provide minor repair and cabin services to all types of aircraft using its facilities as can be performed efficiently on the ramp or tie -down areas, as permitted by these Minimum Standards. Such services will be available on a continuous basis. C. Lessee shall provide airframe and power plant service during the required operating hours. Coverage may be reduced during evenings and weekends upon the approval of the Airport Director, provided a reasonable on -call capability is confirmed. D. Lessee shall provide an employee to be in attendance in the facility office at all times during the required operating hours. E. Lessee shall provide, or lease with approval of the Town, and will maintain mobile pumping equipment for each grade of fuel dispensed with separate dispensing pumps and meters to efficiently service all aircraft normally using its facilities. Stationary fueling facilities located in approved fueling areas may be used in lieu of or in addition to providing mobile 34 equipment; however, the lessee shall provide trained personnel to deliver fuel into aircraft. Individual aircraft operators shall not use FBO equipment to fuel their own aircraft. F. Lessee shall provide suitable tractors, tow bars, jacks, dollies and other equipment as might be necessary to remove the largest type aircraft that normally would be expected to utilize its service at the Airport, tools, tire repairing equipment, energizers and starters, heaters, oxygen supplies, fire extinguishers and passenger loading steps as appropriate and necessary. G. Lessee shall establish and publish its hours of operation. Services shall be available, at a minimum, between the hours of 0800 and 1900 local time, five days a week and seven days a week for fuel. Lessee shall also provide assistance in moving aircraft into and out of its hangar (s) and provide fueling services between the hours of 1900 and 0800 if requested in advance by an aircraft operator. b. COMMERCIAL AERONAUTICAL OPERATORS An individual or company engaged in commercial activity at the airport which provides a service to the flying community, engages in commercial aeronautical activities and utilizes the airport runway and surrounding facilities on a regular basis. The following list, while not exhaustive, is examples of Commercial Aeronautical Operators and corresponding Minimum Standards. i. AIRFRAME AND POWER PLANT REPAIR A. GENERAL: An airframe and power plant repair facility operator is an entity providing one or a combination of airframe and power plant repair services. This category of commercial aeronautical service may also include the sale of aircraft parts and accessories. B. MINIMUM STANDARDS: a. GROUND SPACE AND IMPROVEMENTS: i. Lessee shall lease from the Town an area of land on which shall exist or be erected a hangar - type building (5,000 S.F. minimum) to provide: 1) sufficient hangar space for airframe and power plant repair services (1,000 S.F. 35 minimum), and if contemplated, to include a segregated painting area (500 S.F. minimum) meeting local and State industrial code requirements; and 2) adequate floor space (500 S.F. minimum) for office, customer lounge and restrooms which shall be properly heated, air conditioned and lighted and provided with telephone facilities for customer use. ii. Lessee shall provide a paved aircraft apron (2,500 S.F. minimum) within the leased area to accommodate aircraft movement from its facility to the other areas of the Airport. iii. If constructing the facility, the lessee shall provide: 1. Adequate paved customer auto parking space (10 spaces minimum) and a paved walkway to accommodate pedestrian access to its facility 2. Employee spaces shall also be provided (one space per employee shift). C. SCOPE OF SERVICE: a. Lessee shall provide sufficient uniformed, efficient and trained personnel in such numbers as are required to meet the Minimum Standards set forth in this category. These persons will be currently certified by FAA with current ratings appropriate to the work being performed. b. Lessee shall provide suitable tractors, tow bars, jacks, dollies and other equipment as might be necessary to remove the largest type aircraft that normally would be expected to utilize its service at the Airport. c. Lessee shall establish and publish its hours of operation. Services shall be available, at a minimum, between the hours of 0800 and 1630 local time, five days a week. c. AVIONICS, OR INSTRUMENT OR PROPELLER REPAIR i. GENERAL: An avionics, instrument or propeller repair facility operator is an entity engaged in the business of and providing a facility for the repair of aircraft radios or instruments, or propellers for aircraft. This category includes the sale of aircraft parts and accessories of the type repaired. A. MINIMUM STANDARDS: a. GROUND SPACE AND IMPROVEMENTS: i. Lessee shall lease from the Town an area of land on which shall exist or be erected a hangar -type building (2,500 S.F. minimum) to provide: 1) sufficient floor space (1,000 S.F. minimum) for avionics, instrument and propeller repair services and 2) adequate floor space (500 S.F. minimum) for office, shop, customer lounge and public telephone all of which shall be properly heated, air conditioned and lighted and provided with telephone facilities for customer use. ii. Lessee shall provide a paved aircraft apron (2,500 S.F. minimum) within the leased area to accommodate movement of aircraft from its facility to the other areas of the airport. iii. If constructing the facility, the lessee shall provide: 1. Adequate paved customer auto parking space (10 spaces minimum) and a paved walkway to accommodate pedestrian access to its facility. 2. Employee spaces shall also be provided (one space per employee shift. B. SCOPE OF SERVICE: a. Lessee shall have its premise open and services available during operating hours negotiated between the Lessee and the Airport Director so as to meet public demand for this category of service. b. Lessee shall provide sufficient uniformed, efficient and 37 trained personnel in such numbers as are required to meet the Minimum Standards set forth in this category. These persons will be currently certificated by FAA with current ratings appropriate to the work being performed. c. Lessee shall have an employee in the office at all times during the established operating hours. d. AIRCRAFT CHARTER, AIR CARRIERS, AND AIR TAXI i. GENERAL: An aircraft charter, air carrier, air taxi operator is an entity engaged in the business of providing air transportation for persons or property to the general public for hire, either on a commercial charter basis or as an air taxi operator. This category includes helicopter services. A. MINIMUM STANDARDS: a. GROUND SPACE AND IMPROVEMENTS: i. Lessee shall provide or lease from the Town an office area of at least 250 square feet suitably provided with heating, lighting, and air conditioning, and with accommodations for an office and public telephone. No separate freestanding building housing the required office space may be erected with less than 2,500 square feet without written approval of the Town. ii. Lessee shall provide or lease a paved tie -down area or hangar space (2,500 S.F. minimum) sufficient to store all aircraft utilized in its operation, with paved access to taxiways. If constructing the facility, the lessee shall provide: 1. Adequate paved customer auto parking space (10 spaces minimum) and a paved walkway to accommodate pedestrian access to its facility. 2. Employee spaces shall also be provided (one space per employee shift. B. SCOPE OF SERVICE: a. Lessee shall have available for charter and air taxi, either owned or leased to lessee, at least one (1) four -place 38 b. Lessee shall have in its employ a sufficient number of commercial or airline transport rated pilots, who are currently qualified to operate the lessee's aircraft under instrument flight conditions and are qualified under Part 135 of the Federal Regulations. Lessee may employ part- time pilots, provided they are qualified as outlined above. c. Lessee must present to the Airport Director prior to a lease being granted a FAA approved Part 135 Operations Manual and Training Manual. In addition the lessee must show the Commission that its Director of Operations and Director of Maintenance both meet the requirements of FAR Part 135. ii. Lessee shall have its premises open and services available during operating hours negotiated between the Lessee and the Airport Director so as to meet public demand for this category of service. iii. Lessee shall have an employee in the facility office at all times during the established operating hours. e. AIRCRAFT SALES i. GENERAL: An aircraft sales facility operator is an entity engaged in the sale of new or used aircraft through franchise or licensed dealership or distributor (either on a retail or wholesale basis) of an aircraft manufacturer or otherwise; and provides such repair, services and parts as necessary to meet any guarantee or warranty on new or used aircraft sold by it. A. MINIMUM STANDARDS: a. GROUND SPACE IMPROVEMENTS i. Lessee shall provide or lease from the Town an office area of at least 250 square feet suitably provided with heating and air conditioning and with accommodations for an office and public telephone. No separate freestanding building housing the required office space shall be erected with less than 2,500 square feet without written approval of the Town. 39 ii. If runway access is desired, Lessee shall provide or lease a paved tie -down area or hangar space (2,500 S.F. minimum) sufficient to store all aircraft used for sales, inventory or demonstration with paved access to taxiways. iii. If constructing the facility, the lessee shall provide: 1. Adequate paved customer auto parking space (10 spaces minimum) and a paved walkway to accommodate pedestrian access to its facility. 2. Employee spaces shall also be required (one space per employee shift). B. SCOPE OF SERVICE: a. Lessee shall employ, or have available on call, a sufficient number of pilots with instrument and instructor ratings, who shall also be current in all models to be demonstrated. b. Lessee shall have its premises open and services available during operating hours negotiated between the Lessee and the Airport Director so as to meet public demand for this category of service. c. Lessee shall have an employee in the facility office at all times during the established operating hours. f. AIRCRAFT RENTAL i. GENERAL: An aircraft rental facility operator is an entity engaged in the rental of aircraft to the public. A. MINIMUM STANDARDS: a. GROUND SPACE AND IMPROVEMENTS: i. Lessee shall provide or lease from the Town an office area of at least 250 square feet, suitably provided with heating and air conditioning and with accommodations for an office and public telephone. No separate freestanding building 40 ii. Lessee shall provide or lease a paved tie -down area or hangar space (2,500 S.F. minimum) sufficient to store all aircraft utilized in its operation with paved access to taxiways iii. If constructing the facility, the lessee shall provide: iv. Adequate paved customer auto parking space (10 spaces minimum) and a paved walkway to accommodate pedestrian access to its facility. v. Employee spaces shall also be required (one space per employee shift). B. SCOPE OF SERVICE: a. Lessee shall have available for rental either owned or leased to lessee, at least four (4) four -place or larger single- engine aircraft, all certificated and currently airworthy. b. Lessee shall have in its employ and on -duty during the appropriate business hours, trained personnel in such numbers as are required to meet the Minimum Standards in an efficient manner, but never less than one (1) person having a current commercial pilot certificate with appropriate ratings, including a current flight instructor rating, who shall be current in all models offered for rental. c. Lessee shall have its premises open and services available during operating hours negotiated between the Lessee and the Airport Director so as to meet public demand for this category of service. d. Lessee shall have an employee who is a trained dispatcher capable of determining that each customer is qualified in the aircraft to be rented and is qualified for the existing on forecast weather conditions in the facility office at all times during the established operating hours. g. FLIGHT TRAINING i. GENERAL: A flight training facility operator is an entity engaged in flight training, in fixed or rotary wing aircraft or flight simulators, and provides such related ground school instruction as is necessarily preparatory to taking a written examination and flight check for the category or categories or pilot's licenses and ratings involved. Biannual flight reviews and recurrent training is also included in this category. A. MINIMUM STANDARDS: a. GROUND SPACE AND IMPROVEMENTS: i. Lessee shall provide or lease from the Town an office area of at least 500 square feet suitably provided with heating, lighting and air conditioning with accommodations for customers and visitors to include office, and public telephone. In addition, adequate floor space (500 S.F. minimum) shall be provided for classrooms, pilot briefing room and lounge. No separate freestanding building housing the required office space shall be erected with less than 2,500 square feet without written approval of the Town. ii. Lessee shall provide or lease a paved tie -down area or hangar space (2,500 S.F. minimum) sufficient to store all aircraft utilized in its operation with paved access to taxiways. b. If constructing the facility, the lessee shall provide: i. Adequate paved customer auto parking space (10 spaces minimum) and a paved walkway to accommodate pedestrian access to its facility. ii. Employee spaces shall also required (one space per employees shift). B. SCOPE OF SERVICE: a. Lessee shall have available for use in flight training, either owned or leased to lessee, certificated and currently airworthy aircraft, to include at least four single- engine aircraft or one full motion (3 axis) simulator. 42 b. Lessee shall have in its employ sufficient flight and ground instructors who have been properly certificated by FAA to provide the type of training offered. c. Lessee shall have its premises open and services available during operating hours negotiated between the Lessee and the Airport Director so as to meet public demand for this category of service. d. Lessee shall have an employee in the facility office at all times during the established operating hours. h. SPECIALIZED COMMERCIAL AERONAUTICAL ACTIVITIES i. GENERAL A specialized commercial aeronautical activity is an entity engaged in providing air transportation and related services for hire for the activities listed below: A. Sightseeing flights. B. Aerial photography or survey. C. Fire fighting. D. Power line, underground cable or pipe line patrol. E. Aerial application of agricultural chemicals. F. Air Freight Transport. G. Specialized Aircraft Cleaning /Washing. H. Other operations specifically excluded from Part 135 of Federal Aviation Regulations. ii. MINIMUM STANDARDS: A. GROUND SPACE AND IMPROVEMENTS: a. Lessee shall lease from the Town an office area of at least 250 square feet suitably provided with heating, lighting and air conditioning, and with accommodations for customers and visitors to include office, and public telephone. No separate free standing building for housing the required office space shall be erected with less than 2,500 square feet without written approval of the Town. 43 b. Lessees providing services involving crop dusting, aerial application, or other commercial use of chemicals, shall provide a centrally drained, paved area of sufficient area (2,500 S.F. minimum) for aircraft loading, washing and servicing. Lessee shall provide for the safe storage, containment and disposal of noxious chemical materials. Such storage facilities shall be in a location on the Airport designated by the Airport Director, which will provide the greatest safeguard to the public. Lessee shall also be responsible for the safe, off - Airport disposal of used containers in compliance with State and Federal regulations. c. Lessee shall provide or lease a paved tie -down area or hangar space (1,000 S.F. minimum) sufficient to store all aircraft utilized in its operations with paved access to taxiways. d. If constructing the facility, the lessee shall provide: i. Adequate paved customer auto parking space (five spaces minimum) and a paved walkway to accommodate pedestrian access to its facility. ii. Employee spaces shall also be provided (one space per employee shift). iii. SCOPE OF SERVICE: A. Lessee shall provide and have based on its leasehold, either owned or leased to lessee, at least one aircraft which will be airworthy, meeting all FAA requirements and applicable regulations of the Commonwealth of Virginia with respect to the type of activity to be performed (if aircraft are used in the conduct of that business). B. Lessee shall have in its employ, and on duty during appropriate business hours, trained personnel in such numbers as may be required to meet the Minimum Standards, herein set forth, in an efficient manner. C. Lessee shall provide a point of contact either in person at the Airport or by telephone during established operating hours for the public desiring to utilize the lessee's services. Operating hours to be established agreed upon by the tenant and the Airport Director. D. Lessees providing services involving crop dusting, aerial application, or other commercial use of chemicals shall hold certificates for the commercial application of chemicals issued by appropriate State and Federal agencies and provide to the Airport Director a plan for disposal of all chemical and hazardous waste and wash water used in washing such aircraft. i. HANGAR RENTAL i. GENERAL: An in this classification provides hangars for the storage of aircraft only. A. MINIMUM STANDARDS: a. GROUND SPACE AND IMPROVEMENTS: b. Lessee shall lease from the Town an area of land on which shall exist or be erected hangar type buildings suitable for the storage of a minimum of ten (10) aircraft. Hangars may include T- hangars, executive type hangars for the storage of one aircraft, or capable of storing more than one aircraft. c. Lessee shall provide a paved aircraft apron within the leased area to accommodate movement of aircraft from its facility to the taxiway complex. d. Lessee shall provide adequate paved customer auto parking space (one space per aircraft stored) and a paved walkway to accommodate pedestrian access to its facility. Employee spaces shall be required (one space per employee shift). B. SCOPE OF SERVICE: a. Lessee shall have in its employ, and on duty at the Airport during appropriate business hours, a resident manager for the hangar complex and sufficient uniformed, efficient and trained personnel as are required to assist owners in moving their aircraft into and out of its hangars unless hangars are subleased. b. Lessee shall provide suitable tractors, tow bars and other equipment as might be necessary to move the aircraft stored in its hangars unless hangars are subleased. 45 J. c. Lessee shall provide assistance in moving aircraft into and out of its hangars, at a minimum, between the hours of 0800 and 1900 local time, seven days a week. Lessee shall also provide assistance between the hours 1900 and 0800 if requested in advance by an aircraft owner unless hangars are subleased. d. Lessee shall provide a point of contact either in person at the office located on the Airport or by telephone during established operating hours unless no office is established. COMMERCIAL OPERATORS Commercial Operators (as defined in Chapter 1, Definitions) offer services that do not require access to a runway and other airport facilities dedicated to aviation. These activities are subject to all general Minimum Standards contained herein. Minimum requirements for these activities shall be considered on a case -by -case basis using the intent of these Minimum Standards. All other applicable local, state and federal regulations pertaining to these types of services shall govern in case of conflict with any of these Minimum Standards. The Town shall determine final lease conditions. In all cases, commercial non- aeronautical activities must, in some fashion, support the aviation community. Commercial Operators who do not lease space at the Airport shall not operate at the Airport without a Temporary Commercial Operator Permit. k. CONCESSIONAIRES Other non - aeronautical related activities including services such as snack/sandwich deli's, restaurants, catering services, etc. are subject to all general Minimum Standards contained herein. Minimum requirements for activities not specifically identified shall be considered on a case -by -case basis using the intent of these Minimum Standards. All other applicable local, state and federal regulations pertaining to these types of services shall govern in case of conflict with any of these Minimum Standards. The Town shall enter into a Concessionaire Agreement with the Concessionaire and determine any associated fees along with lease conditions. Concessionaires shall not operate at the Airport without a Concessionaire Agreement. 1. FLYING CLUBS In an effort to foster and promote flying for pleasure, develop skills in aeronautics, including pilotage, navigation, and an awareness and appreciation of aviation requirements and techniques Flying Clubs are permitted to operate under the Rules, Regulations, and these Minimum Standards. All flying clubs desiring to base their aircraft and operate on the Airport must comply with the applicable provisions of the Rules, Regulations, and 46 these Minimum Standards. However, they shall be exempt from regular fixed base operator requirements upon satisfactory fulfillment of the conditions contained herein. i. The club shall be a non - profit entity (Corporation, Association, or Partnership) organized for the express purpose of providing its members with an aircraft for their personal use and enjoyment only. The ownership of the aircraft must be vested in the name of the flying club or shall be owned ratably by all of its members. The property rights of the members of the club shall be equal and no part of the net earnings of the club will inure to the benefit of any member in any form (salaries, bonuses, etc.). The club may not derive greater revenue from the use of its aircraft than the amount necessary for the operations, maintenance, and replacement of its aircraft. ii. Flying clubs may not offer or conduct air charter, rental, or maintenance (other than individual routine maintenance in designated areas). They shall not conduct aircraft flight instruction and only members of the flying club shall operate the aircraft. No flying club shall permit its aircraft to be utilized for flight instruction except when instruction is given by an employee of a lessee based on the airport that holds an FBO license for flight training. iii. All flying clubs and their members are prohibited from leasing or selling any goods or services whatsoever to any person or firm other than a member of such club at the airport except that said flying club may sell or exchange its capital equipment. iv. The flying club, with its permit request, shall furnish the Airport Director a copy of its charter and by -laws, articles of association, partnership agreement or other documentation supporting its existence; a roster, or list of members including names of officers and directors, to be revised on a semi - annual basis; evidence of insurance as required in Chapter IV; number and type of aircraft; evidence that aircraft are property certificated; evidence that ownership is vested in the club; and operating rules of the club. The books and other records of the club shall be available for review at any reasonable time by Airport Director or his authorized agent. v. The flying club shall abide by and comply with all Federal, State, and Local laws, ordinances and regulations. vi. Any flying club which violates any of the foregoing, or permits one or more members to do so, will be required to terminate all operations in accordance with the provisions of the Rules, Regulations, and these Minimum Standards. CHAPTER FIVE I. MINIMUM STANDARDS FOR FACILITIES AND IMPROVEMENTS a. REVIEW PROCEDURES: i. No buildings, structures, tie downs, ramps, paving, taxi areas or any other improvement or addition on the Airport shall be placed or constructed on the Airport, or altered or removed without prior approval of the Town. In the event of any construction the Town may, at its discretion, require an appropriate bond to guarantee the completion of the construction in accordance with its approval. The Airport Commission shall consider conformance to the Airport Master Plan prior to the approval or denial of any construction or development at the Airport. ii. A site plan will be required to be submitted to the Town and Commission for any proposed new facilities. All plans and construction drawings for buildings, paved areas, and other facilities shall meet at least the Minimum Standards set forth herein and shall be reviewed by the Airport Commission and approved by the Town. Recommendation by the Airport Commission shall precede submission to other regulatory agencies. Final plans and specifications for any construction required or proposed by an operator shall be submitted to the Airport Commission for review and recommendation within 60 days from the insurance of the operator's license, and construction shall commence within 60 days from the Town's approval of the plans and specifications. In the event that a phased construction program is provided in the lease agreement, the agreement should specify completion dates for each phase. Submittals of final plans and specifications to the Airport Commission for recommendation and Town for approval shall follow the lease agreement schedule. The deadlines provided in this paragraph may be recommended by the Airport Commission and extended by the Town for a good cause upon request by the operator. iii. All facilities shall be in conformance with the adopted Airport Master Plan. In addition to specific design standards for Leesburg Executive Airport, all facilities are subject to the applicable standards and regulations of the FAA, Commonwealth of Virginia, Loudoun County, and the Town of Leesburg. b. PAVED AREAS i. AIRCRAFT PARKING AND MANEUVERING AREAS 1. Pavement sections are to be designed to accommodate aircraft 48 with wheel loadings of 30,000 lbs. single gear; or 70,000 lbs. dual gear as specified on the Layout Plan. FAA accepted design criteria should be used. In addition to aircraft wheel loadings, pavements are to be designed to accommodate fuel trucks servicing the aircraft. Computations supporting the pavement design shall be submitted to the Town, DOAV and FAA for their review and approval. 2. All aircraft pavements shall be constructed in accordance with Advisory Circular 150/5300 -13 Airport Design using FAA approved materials. Locally obtained materials may be used where suitable and so authorized by the Town, DOAV and the FAA. 3. Grades shall not exceed 1.5% or applicable FAA standard whichever is governing. Grades in aircraft fueling areas shall be no greater 1 %. 4. All drainage structures shall be located within infield areas. In- pavement drainage structures are discouraged and must be approved for use by the Town when proposed. 5. All aircraft parking areas shall contain approved tie -down installations. Method of tie -down shall be approved by the Town. Parking positions and taxi lanes shall be clearly marked. 6. Aircraft parking areas shall be configured to allow ease of ingress and egress. The minimum gross area required for based aircraft push - in/power -out parking is 3,500 square feet for single - engine aircraft and 4,500 square feet for twin- engine aircraft. Transient aircraft parking areas require power - in/power -out spaces with minimum gross areas of 5,650 square feet for twin - engine aircraft. Ramp space for transient jet aircraft will vary with the size of the design aircraft. ii. AUTOMOBILE PARKING LOTS AND SERVICE DRIVES 1. All automobile parking lots and service drives shall be asphalt. 2. Pavement design shall consider the types of vehicles using the lots /drives, the amount of traffic and subsoil conditions. Computation using approved FAA or local requirements for pavement design shall be submitted to the Town for approval. As a minimum, vehicle pavement shall consist of a 2" bituminous concrete surface over an 8" crushed stone base. The maximum grade in any direction is 5 %, the minimum is 1 %. 3. Parking lots shall be configured to allow ease of ingress and 49 egress and parking spaces shall be clearly marked. Loading zones, handicapped spaces, and fire lanes shall be marked appropriately. Minimum parking space area per automobile shall be based on Town standards. c. GRADING, DRAINAGE AND LANDSCAPING i. INFIELD AREAS 1. Unpaved areas within and adjacent to the runway /taxiway system and other aircraft operating areas shall have grades adhering to FAA recommendations for Basic Transport Airports. 2. All site plans shall comply with applicable state and local storm water management requirements. As a minimum, infield areas shall be designed to have a ponding (storage) capacity sufficient to accumulate the runoff from a 10 -year design storm. 3. Grates and inlet structures shall be manufacturer certified to support aircraft of the same weight as the adjacent pavement. 4. All drainage pipes shall be Reinforced Concrete Pipe (RCCP) Class III or IV (CL. IV shall be used under all paved areas) as specified in Virginia Department of Transportation Specification 232.02 regarding pipe wall thickness and pipe burial depth. 5. All drainage facilities shall be sized in accordance with FAA and local requirements and procedures considering existing, proposed and future site conditions. Computations supporting the drainage designs shall be submitted to the Town for their review and approval. ii. GRADING 1. Grading operations will meet all applicable erosion and sediment control regulations as required by the Town of Leesburg and Loudoun County and other governing agency requirements. d. LANDSCAPING i. All graded areas will be fertilized, seeded and mulched with an approved mixture of grasses. Seeds will be applied at rate to achieve a minimum coverage of one (1) sprig per square centimeter. ii. Non - aircraft areas shall be landscaped with grass, trees and shrubs. Landscaping may be used for screening of facilities, providing shade in parking areas and to produce a visually interesting complement to buildings. Plant materials should be chosen for ease of maintenance, 50 disease resistance and suitability for local climatic conditions. All plantings must be approved by the Airport Director for adherence to FAR Part 77 height restrictions. iii. A landscape plan shall be part of every facility proposal. e. AIRCRAFT WASH RACKS Aircraft wash racks shall be equipped with oil/water separators and oil catch tanks to prevent oil from being discharged into the storm water or sanitary sewer system. f. SECURITY AND LIGHTING g. i. Fencing shall be provided between aircraft and non - aircraft areas to limit pedestrian and vehicular interference with aircraft movements, and to provide security for parked aircraft. ii. Area lighting shall be provided for safety and operational needs at the following minimum intensity levels: Area Foot Candles' Access Roads 1.0 Auto Parking Lots 2.0 Exterior of Terminal Building, offices and other required public spaces 4.0 Hangar areas Storage 1.0 Maintenance 2.0 Apron Areas 0.5 Fuel Farm 2.0 iii. All lighting fixtures shall be shielded from glare for aircraft on the runway /taxiway system, helipads, or in the air. iv. All electrical and telephone cable shall be underground. Conduits under paved areas or planned pavement shall be concrete encased. v. Lighting designs shall avoid violations to the FAR Part 77 height restrictions. Any obstructions to FAR Part 77 surfaces shall be properly marked and lighted. FUEL STORAGE AND DISTRIBUTION i. All fuel shall be stored in above - ground or above - ground tanks located in designated approved areas within leased areas on the Airport. Distribution of fuel into aircraft shall be via mobile pumping equipment (fuelers) by trained persons employed by the FBO providing the service. Individual aircraft operators shall not use FBO fueling equipment to fuel 1 Measured at most remote point of areas involved (+ 200 feet) 36 inches above ground. 51 their own aircraft. ii. Tanks shall be corrosion resistant materials designed for the storage of aviation fuels and meet criteria established by National Fire Protection Association (NFPA) Standard No. 30, Flammable and Combustible Liquids Code. iii. Fueling equipment and procedures shall meet criteria set forth in NFPA Standard No. 407, Aircraft Fuel Servicing and applicable Commonwealth of Virginia Air Pollution Control Board regulations. iv. Other National Fire Protection Association recommendations as promoted through NFPA publications 10, 70, 77, 385, 409, 415 & 418 shall be enforced. v. Equipment, operation and maintained of the fueling facilities shall be in accordance with the Environmental Protection Agency Resource Conservation and Recovery Act. Leases shall be responsible for full compliance with these regulations including all notification and reporting requirements to the state utilities control Board. h. HANGARS, BUILDINGS AND OTHER STRUCTURES i. CODES 1. All hangars, buildings and other structures shall conform to building and safety codes applicable for the intended use. These include (but are not necessarily limited to): 2. Building Officials and Code Administrators (BOCA) Building Code 3. Commonwealth of Virginia (Uniform Statewide Building Code) 4. Town of Leesburg 5. Loudoun County 6. Federal Aviation Administration (FAA) 7. Occupational Safety and Health Administration (OSHA) 8. Access for the handicapped American National Standards Institute (ANSI) A117.1 -1980 and Federal Guidelines for Accessible Design 36 CFR Part 1190) No office /mobile trailers shall satisfy these requirements except as approved by Town for temporary facilities during construction of permanent facilities. 52 ii. LOCATION AND HEIGHT 1. The locations of lessee buildings shall be guided by the adopted Airport Master Plan and standards established in FAA Advisory Circular 150/5300 -48 and 150/5300 -12 for utility and Basic Transport Airports - Group II. No structures may be of such a height as to penetrate the runway or approach imaginary surfaces specified by FAR Part 77. 2. Windows and large areas of glass shall be oriented to avoid reflections, which could distract pilots landing or taking off. iii. UTILITIES 1. Buildings, or portions of buildings, (such as lean -to structures adjacent to hangars) used for offices, customer lounges, waiting rooms or other public spaces shall be provided with heating, air conditioning, lighting, sanitary restrooms, public telephone and sprinkler system. Such buildings shall be separated by a firewall meeting all applicable codes when adjacent to any hangar, building or area in which aircraft are stored. 2. Buildings, or portions of buildings, used for maintenance shops or aircraft repair, shall be provided with heating, lighting, sanitary restrooms, telephone service and sprinkler system (if required by applicable law). 3. Hangars 2,000 square feet or greater, not including T- hangars, used for aircraft maintenance or aircraft storage, shall be provided with electrical service, lighting, heating and sprinkler system (if required by Code). 4. Hangars less than 2,000 square feet and T- hangars used for aircraft storage shall be provided with electrical service, lighting, smoke detectors and fire extinguishers. 5. All buildings requiring water service shall connect to the public water system if available at time of construction. If public water is not available, private wells approved by Town of Leesburg shall be utilized. When public water service is made available, a connection shall be made within one year after date of availability. 6. All buildings requiring sanitary waste disposal shall connect to the public sewer system if available at time of construction. If public sanitary sewer is not available, individual septic systems, 53 approved by the Town of Leesburg, shall be utilized. When public sanitary sewer is made available, a connection shall be made within one year after date of availability. 7. All new electrical and telephone service shall be underground. iv. ACCESS 1. Pedestrian and vehicular access to buildings normally open to the public shall avoid crossing aircraft operating areas. 2. Vehicular access to aircraft storage hangars shall minimize crossing of aircraft operating areas. Automobile parking shall be provided for aircraft storage hangars in locations, which do not interfere with aircraft operations. 3. For hangars larger than 2,000 square feet a personnel door shall be provided. 4. Hangar doors may be of either sliding or bi -fold type. However, sliding doors may not be used in hangar configurations where the open door of one hangar interferes with access to an adjacent hangar. v. MATERIALS AND FINISHES 1. The objective of the Commission is to insure that all new construction is of high quality and utilizes materials and finishes which will maintain their appearance with low maintenance. To this end, the following guidelines have been developed. 2. Hangars and other buildings may be constructed with steel, aluminum or masonry exteriors. All exterior metal surfaces shall have a durable finish applied at the point of manufacture. 3. Exterior colors and textures should harmonize with other buildings and structures. The Airport Director reserves the right to disapprove exterior materials or finishes, which it feels would detract from the overall visual impression of the Airport. 4. The Airport Director shall also approve interior materials, finishes, fixtures and graphics, which are part of waiting rooms, lounges or other public spaces. 5. Signs shall adhere to appropriate regulations of the Town of Leesburg and be approved by the Airport Director. No signs, logos or other graphics may be painted on the roofs of buildings, nor may any illuminated signs be placed in locations where they 54 could distract pilots or interfere with airfield lighting. vi. AIRCRAFT MAINTENANCE IN STORAGE HANGARS 1. PERFORMANCE OF AIRCRAFT MAINTENANCE Aircraft owners /lessees and their employees may make repairs and perform maintenance on their own aircraft, not in violation of Federal Aviation Administration Regulations, in Aircraft Storage Hangars, subject to the Leesburg Executive Airport Minimum Standards, the limitations contained in this document and any restrictions on such activities as may be promulgated by Franchise Holder lease agreements. 2. ASSEMBLY OF AMATEUR -BUILT EXPERIMENTAL AIRCRAFT Lessees of hangars operated by Franchise Holders may accomplish assembly of an amateur -built experimental aircraft project in his/her leased storage hangar. The aircraft builder must maintain compliance with the Franchise Agreement, Hangar Lease Agreement, the By -Laws of the hangar association if applicable, the Leesburg Executive Airport Minimum Standards and with the limitations contained in this document. 3. SPECIALIZED REPAIRS /MAINTENANCE An aircraft owner /lessee requiring specialized repairs /maintenance may employ a certified specialist for such repair /maintenance activity to his/her own aircraft in an Aircraft Storage Hangar provided the certified specialist is registered with the Airport prior to performing repairs or maintenance as defined herein, and provided that the certified specialist complies with the Leesburg Executive Airport Minimum Standards and with the limitations on maintenance activities specified in this document. 4. LIMITATIONS ON MAINTENANCE ACTIVITIES IN AIRCRAFT STORAGE HANGARS a. Except for oil in containers, no flammable liquid or gases, including but not limited to gasoline, dope, paint, thinner, or solvent (other than fuel in aircraft fuel tanks), shall be stored in any facility housing aircraft, except as is necessary for use inside repair shops by approved Fixed Base Operators or Certified Repair Stations. Storage of such fluids shall be in NFPA, DOT or UL approved containers or unopened original containers. A separate 55 building for such storage may be required for insurance purposes. b. Washing of aircraft with running water within the hangar is prohibited. c. No alterations will be made to a storage hangar structure. d. Tenants of all Aircraft Storage Hangars will exercise reasonable care to keep oil, grease, etc. off the floor. e. Smoking in Aircraft Storage Hangars or surrounding area is strictly prohibited. f. Tenants shall conduct no commercial activity of any kind whatsoever in, from or around Aircraft Storage Hangars. g. Space or building heating systems or devices in any Aircraft Storage Hangar shall only be approved systems or devices as listed by the Underwriters Laboratories, Inc., and shall be installed in the manner prescribed by the Underwriters Laboratories, Inc., and approved by the County of Loudoun Fire Marshal. Use of kerosene heaters or any type of open flame heaters or apparatus is prohibited in Aircraft Storage Hangars. h. The proper and legal disposal of used oils, fluids, tires etc. is the sole responsibility of the hangar tenant. i. Hangar tenants shall not cause an electrical overload. J. Aircraft Storage Hangars shall not be used for any purpose that would constitute a nuisance or interfere in any way with the use and occupancy of other buildings and structures in the neighborhood of the leased premises. k. No person shall operate any machinery or equipment producing unshielded sparks in any Aircraft Storage Hangar. 1. No aircraft or aircraft component shall be suspended or lifted utilizing the Aircraft Storage Hangar's structure or any component of the building. Lifting devices resting on the floor but not attached to any portion of the hangar are permitted. m. Tools, equipment, and material that constitute a fire hazard are prohibited in Aircraft Storage Hangars. 56 Section I Page 5 y • y L J, 0 . 0 o ° y w •0, 0 0 0 Ay y 0 Q C 0 0 0 Range of Options mmfflmm 0 0 0 C 0 0 U 0 0 -0 n(1 U U 0. U U 7 N �^ cL E 0 C 0 0 U 0 0 U 0 c 0 U 0 a" 0 a 1 ^ L 0 C) O-0 0 0. C O _ . 0 to O b 0. 0 CG i 0 N 0 O L 0. Ground Lease Termination Provision Analysis Jackson County Airport Authority Rogue Valley International- Medford Airport February 2006 PROJECT ACTIVITIES AND PROCESS ABS met and talked with County Commissioners, County staff, Airport personnel and Airport tenants during the research and discovery phase of this effort. During the months of October and Siam November 2005, ABS traveled to Medford for meetings with the County and tenants. Individual meetings were made available to the commercial tenants and open meetings were conducted for all tenants, and were conveniently located on the Airport in the Boeing KC 97 meeting space. Additionally, we made ourselves available via telephone and e -mail for any interested tenant to contact us with their thoughts and comments throughout the course of this project. Due to the importance lease language, and the high interest of the County to allow all interested parties the opportunity to express their thoughts, the project was extended to provide more than ample time for all entities to submit additional or new information to Airport Business Solutions. Section I Page 6 of the decision on reversionary Comments and written materials were collected from Airport tenants and carefully reviewed and considered. In addition, ABS staff contacted several Northwestern U.S. airports for details on their respective approach to reversionary lease conditions. Comments received from tenants are included within this report in Section II, and information from other airports is in Section III. ABS reviewed and researched more than 1,000 pages of information provided by varied sources within the County. Aiiport Business Solutions Ground Lease Termination Provision Analysis Jackson County Airport Authority Rogue Valley International- Medford Airport February 2006 SECTION II TENANT MEETINGS AND CONTACTS Section II Page 1 Both the County andAirportBusiness Solutions believed that communications with the Airport tenants was a very important part of this process. In order to arrange for unrestricted access to the project process, ABS provided multiple avenues for the tenants to access our staff in order to provide comments and input into the research process. This included: • On -site open tenant meetings • Individual tenant meetings as requested • Private meetings with FBO management • Full access to e-mail • Toll free telephones • Full telephone access, office phones and cell phones • Extended project time to allow tenants additional time for comments The on- Airport open tenant meeting was held over an eight -hour period during afternoon and evening hours on November 15, 2005. A total of 15 different tenants attended the meetings, provided comments, and presented concerns. Five of the attendees presented ABS with documents relative to the issue. These tenants' tenures on Airport property ranged from 6 years to 55 years, with an average Airport tenancy of 18.5 years. Six e -mails were received from tenants, and seven individual postal mailings were received during the project. Four of the mailings contained packets of varying data regarding the current Jackson County reversionary policy, hangar leases, and copies of the State of Oregon Reversion Policy. TENANT - SUPPLIED INFORMATION Many tenants either verbally or via written documents, referred to the State of Oregon reversion policy. An excerpt from this policy is proved herein for clarification: Reversion: Under NO circumstances is there any reversion of ownership of tenant improvements to the State for either commercial or non - commercial tenants. At the end of the lease, the tenant is responsible for removing their improvements if a new lease is not entered into. The above excerpt can be found in the State of Oregon's Leasing Policy, which was adopted in 2001. Despite references by tenants, it should be noted that by definition, the State's policy is a form of reversion. Moreover, it is similar to the language found within County leases prior to the adoption of the 2000 reversion policy in April 2000. Also included in the policy is a condition that if at the time of the lease expiration the - Airport Business Solutions Ground Lease Termination Provision Analysis Jackson County Airport Authority Rogue Valley International- Medford Airport February 2006 Section II Page 2 land is needed for Airport development, the tenant will be responsible for removing their improvements. This would be at no expense to the Lessor. In 2001, the State of Oregon owned and operated 31 separate airports located all over the State. Today, that number is down to 28, with a few of the more active airports being transferred to local governmental entities. When Airport Business Solutions was under contract to the State of Oregon to develop a series of documents, including the aforementioned Leasing Policy, we visited each of the 31 airports as part of our research. Most of those airports had less than 20 based aircraft (or no based aircraft at all), no or limited available services. As such, they are very different operationally from MFR. In addition, the State's Airport Division staff is very small, and having the responsibility to maintain structures hundreds of miles away would not be prudent. Furthermore, there is no motive for the State to operate on a "for- profit" basis, but rather only be "revenue- neutral ". While it is certainly helpful to research how other airports have approached this issue, the research must include an analysis of the similarities of an airport's mission and operational activity. Some tenants providedABS with copies of their individual hangar agreements. ABS is aware that lease language varies in the older leases, and to a great extent, that is what has lead to the current policy controversy. In a recent lease agreement reviewed by ABS, the term reflects a ten -year term with one ten -year option, as long as the tenant is not in default. Item 17 of the agreement reviewed states: Title to Improvements. Title to the hangar constructed on the leased premises shall be and remain in the Tenant and upon the end of the lease term including any option periods, Tenant shall remove the hangar from the leased premises and restore the property to the condition it was at the commencement of this lease. This, in essence, is the same reversion policy adopted by the State of Oregon in their Leasing Policy in 2001. Within the lease agreement, the County does retain the right to assert a possessory lien against the hangar for any amount of unpaid rent. In Section B, 3, it states: If Tenant fails to remove its hangar, the County may remove it from the leased premises and store same on the County's property. At the end of a one-year period, the County may offer the same at public or private sale upon ten (10) days notice to Tenant, at Tenant's last known address, and from the proceeds satisfy the County's claim for unpaid rent, reasonable moving and storage costs, and expenses, including attorney's fees. In Section B, 4, it states: At the end of a one-year storage period referenced above, the County may, at its option, decide not to sell the hangar, declare it the property of the County, and use it for whatever purposes the County chooses. Airport Business MEI Solutions Ground Lease Termination Provision Analysis Jackson County Airport Authority Rogue Valley International- Medford Airport February 2006 AIRPORT DE VELOPMENT Section II Page 3 Many tenants presented information on a 1996 effort on behalf of the County to generate revenue by fostering private investment in developing vacant land on the Airport. As seen in this aerial photo from the 2001 Master Plan, the Airport has consumed much of its aeronautical property. o: ya:` 4; w::•: a�' �sarssa: ssr:?.+v:,cvxas�:.r:�%�9K?(??M; •::4h�• ua:��s:;:u;: ' aM°' RuneeAY racer LEGEND O N aynat WOZnor Sonico 0 Pal. A3 Research © Er'unon Ay Group 0 Logan and Reao'.s o U3. Pwwst Smvv ED Men: 0'144s O h1Odprd Al Samce w Jet COnlcr•South O Suponor At: Solo, ®Mtn°Teneual o Ma:nxn.r.• LWrd AJ ® IAaEWrd Ar Cargo O IJS1c, Flirts Hangar Arport Fre $data, Fvderat Eapren CrcJ Ar Paint 0) Jot Center • North A•rpof Adrnle ttal. Sloraee.Recennylnspeceon Faetly ©i d:9 Fad'.ly ® Federal Inspect." 018:e FooTdy IWjfiL 1 OUN1 A number of the existing hangar leases at MFR have entered or are near the end of the 10 -year option period, and as such would be impacted by the policy as adopted in 2000. Hangar Rows H and I would be the first leases to be directly impacted by the existing reversion policy. Included in the hangar lease document reviewed in Paragraph 9: Airport Development. County, at its sole discretion and as designated by the Airport Director, shall determine, and may from time to time change the routes of surface ingress and egress on the Airport, but agrees to locate such routes as conveniently as may be donefor tenant, having in mind reasonable Aifport Business Solutions Ground Lease Termination Provision Analysis Jackson County Airport Authority Rogue Valley International - Medford Airport February 2006 Section II Page 4 requirements of the County with respect to the operation of the Airport. County also reserves the right as it sees fit, regardless of the desires or view of Tenant and without interference or hinderance. Some of the tenants that contacted ABS referenced a meeting where the Airport Director stated that the County had no intention to implement this clause within their leases. While we have no way of knowing exactly what may have been said during such a meeting, the County and tenants are likely bound by the terms and conditions of their signed agreement, barring a legal challenge. There were several statements by tenants that the leases would not have been acceptable if they had known that four years later, the County reversion policy would be modified. They further suggested that the Airport Director and/or County were considering changes for four or more years, although no documents were provided to ABS support this theory. Additional comments from Airport lessees stated a concern that the April 2000 reversion language was inserted into leases after the leases were signed. There is no indication that the County has done this, as the policy was for new leases only. Four suggested alternatives from tenants include the following: 1. Exempt this group of private leases from the reversion policy on the very firm ground that the policy was neither in effect at the time of the signing of the original agreement, nor specifically addressed in the terms of the agreement. a. ABS comment: Policies adopted after agreements are written do not impact the agreements until the term expires. The tenant entered the agreement with the knowledge that the agreement was for a 10 year period with a 10 year option. There was no indication that these were perpetual leases. It is unreasonable to concur that the County knew four plus years in advance what policies may be needed relative to the management of County real property assets. 2. Issue new leases that substantially extend the terms of each lease in order to allow leaseholders to receive a fair return on their investment. a. ABS comment: Upon expiration of the original term and renewal option, the tenant will have had 20 years to amortize the investment in a hangar facility. This term is adequate for depreciation and amortization purposes, and is consistent with lease terms at other airports for similar investments. Any financing of improvements was predicated upon the 20 year term stated in the lease document. No lending institution would extend an amortization period beyond lease expiration as specifically stated in a lease agreement. Airport Business NMI Solutions Ground Lease Termination Provision Analysis Jackson County Airport Authority Rogue Valley International - Medford Airport February 2006 Section II Page 5 3. Allow reversion on the condition that the County pay leaseholders the fair market value of the "seized" improvement, such value to be established by an independent appraisal, acceptable to both parties, and made at the time of reversion. a. ABS comment: To determine the value of each individual hangar by the County through an appraisal process, and to negotiate with the owner to agree on value would be extremely time - consuming and costly. In order to be accurate and fair to both parties, the process would require a structural engineering analysis to determine condition, in addition to the appraisal. Who would pay for the appraisal or engineering evaluation and how would the rate for lease term to value be established? What if the County does not have a need for a particular individual hangar? What if the County /Airport does not have sufficient funds at that time to purchase hangars because they are allocatedfor Airport maintenance, matchingfunds for federal grants, or other items that benefit the entire Airport population and community? Moreover, the Airport has a residual contract with the airlines for airfield expenses. Would purchasing hangars create a situation which further enhances the subsidy of general aviation by the airlines, which in turn may raise landing fees to the point to make Medford unattractive to the airlines? 4. Continue renewals indefinitely, but maintain a fair revenue stream to the County by adjusting the unimproved land lease rates in accordance with periodic independent appraisal. a. ABS Comment: Perpetual renewals are not in compliance with the FAA Order 5190.6a. This would be considered as the giving of property to the lessee, even with periodic rent adjustments. If there is demand for property, the Airport is obligated to seek competitive bids to maximize revenue opportunities. Research indicates that there is substantial demand in Medford. OTHER TENANT DOCUMENTS OR COMMENTS As part of our research, we also reviewed tenant mailings and correspondence sent to the Airport and County prior to the beginning of this project. In addition, ABS read all minutes provided from County Commission meetings with comments or discussions regarding the reversion policy. In minutes from a 1999 Airport Advisory meeting, it indicates the Airport Director brought to the table an item on reversions. It was stated in the meeting that the Airport leases had a variety of options when leases termed, and that it was time for the County to look at an Ordinance on a reversion policy. It was recommended Airport Business Solutions Ground Lease Termination Provision Analysis Jackson County Airport Authority Rogue Valley International - Medford Airport February 2006 Section II Page 6 that the County write leases for a longer period, and that title to improvements would revert at the end of the lease. The motion passed unanimously. Tenants' correspondence includes a letter to Senator Gordon Smith. Senator Smith subsequently made an inquiry to the FAA in May 2002. The following is an excerpt from the FAA Northwest Regional Office's response to his inquiry that was forwarded to Medford tenants. Regarding the reversion issue, in the past, Rogue Valley International had a conglomeration of lease requirements, some allowing improvement removal, others requiring reversion of the title to the County. The County and the Airport made a policy decision (County Policy 7 -16) to make all leases the same, thus treating all tenants similarly. The Federal Aviation Administration (FAA) supports that decision, because it helps promote consistent treatment of tenants. A mixture of requirements for the same type lease would result in disparate treatment. The change in policy, to require reversion of improvements to the County at lease termination, or to require their removal, is entirely within the prerogative of the County. The County policy, in development for about a year, was established in a public process, and is not unjustly discriminatory or unreasonable. Capital improvements include such things as buildings, fences, paving, landscaping, and anything fixed to a building or land. We support the County's decision to implement a standard reversionary clause in its leases, in order to bring about a degree of uniformity. It is common for permanent capital improvements made to or on land to become the property of the landowner at the termination of the lease. Other Airport tenants contacted the Seattle Airport District Office, and received a response from the Northwest Regional Office. These responses generally restated the comments of the May 2002 letter from that office. In February 2002, the County responded to a request to "exercise an option to extend" from five hangar owners. This extension does not fall under the April 2000 policy, but continues with the earlier policy for removal of the hangar, if requested. Based upon information provided to ABS, it does not appear that these tenants ever signed the extensions, because they did not agree to the terms. The extensions, as written, would have served to extend each of their leases until 2016, and at the end of the lease, the Lessee would have to negotiate a new lease with the County. Certain tenants that were recent purchasers of individual hangars shared multiple concerns. While certain issues were raised by the newer tenants on the ability to obtain information, we have not commented because it was not part of the scope of this assignment. Moreover, the tenants' interpretation of the events that transpired have previously been provided to the County. However, it is our position and opinion that it is the buyer's responsibility to protect themselves via a thorough review of any and all relative documents prior to consummating a transaction. Airport Business Solutions Ground Lease Termination Provision Analysis Jackson County Airport Authority Rogue Valley International- Medford Airport February 2006 Section II Page 7 As a result of the audit of County leases, and subsequent to the adoption of the current reversion policy, the County developed a more comprehensive non - commercial ground lease which addresses the concerns of property maintenance over time, added a section on "Title to Improvements ", addressed security deposits and inspection authorization, as well as many other areas not included in earlier leases. Considering the County has historically allowed at least 20 -year occupancy for individual hangars, this new lease is much more appropriate, although still fails to address many of the concerns /issues as they relate to reversion at the termination of the existing agreements. Airport Business Solutions Ground Lease Termination Provision Analysis Jackson County Airport Authority Rogue Valley International- Medford Airport February 2006 SECTION HI REVERSION CLAUSE RESEARCH Section III Page 1 The following pages will present the results of multiple interviews and comments from the FAA and other airport management and/or sponsors. It is important to remember, and this will become obvious as you read the following lease language, that airports are different and develop differently, and as such the same terms and conditions are not necessarily practical for every airport. FAA Airport District Office, Oregon/Idaho Section (SEA -640) This office advisedABSthat the FAA does not track airports with reversion clauses. They recommend reversion clauses to make it clear to the tenant what occurs at the end of a lease. It is their opinion that if the lease is silent on the issue, improvements automatically revert to the airport at lease termination, since tenants cannot own the public land. Problems tend to occur because tenants often fail to consider what occurs at the end of the lease term. FAA Safety and Standards Branch, Southwest Region (ASW -620) ABS believed the FAA Region could provide insight because they are currently involved with a reversion situation at the White Sands Regional Airport in Alamogordo, New Mexico. This office echoed the SEA -640 FAA office by stating that the FAA does not have a set policy on reversion clauses. They also indicated that it is a good business practice to include a reversion clause, and that problems occur when the clause is included in a lease, but not enforced. At Alamogordo, the FAA had to pressure the City to charge market rates for the "improved land ". During a review of leases at the Airport, it was revealed that the City had renounced or removed its claim to building improvements on 19 of 27 ground leases on leased Airport land. This was a conflict with the "reversion terms" of the leases. In 2002, the Airport inserted new language to the leases that stated that the City shall not assert any claim to improvements, pre- existing or not. This was done at the request of the leaseholders at the Airport. Now, the Airport is in jeopardy of losing its Federal, as well as State funding, since it is not in compliance with the Grant Assurances. In a letter to the City from the New Mexico Department of Transportation, it was pointed out that the normal State -wide procedure is to rent bare land at a subsidized rate, with any improvements reverting to the airport after the lease term has expired. These facilities are then owned by the airport, who then rents the land and improvements at a rate of 10 to 20 times greater than the bare ground rental rate. This then allows the airport to become a self - sustaining entity, thereby lessening the burden on the local taxpayer. The State also Airport Business Solutions Ground Lease Termination Provision Analysis Jackson County Airport Authority Rogue Valley International- Medford Airport February 2006 Section III Page 2 advised that some of the leases they reviewed were giving away the sponsor's property interest, which was a violation of the New Mexico law under the "anti- donation" clause. Here are some of the situations /cases that have occurred at the Airport, according to an article from the Alamogordo News. In 1994, Hangar 0 was sold to Ed Pavelka for $10.00, according to City records. In November of that year, the Airport Advisory Board took up the matter as a potential violation of the advance notice requirement in the lease. Three years later, Hanger 0 was sold again, this time to Tina Cesa, for $36,000. In 1998, the City amended the lease with Cesa to state that Alamogordo has the right to purchase the property at its undepreciated value when the lease expires. In the case of Hangar G, it was first leased by Black Hills Aviation in 1975. In 1991, the lease rate was increased from $0.04 to $0.08 per square foot when the lease was up for renewal. The City received no notice of Black Hills' intentions until Jan. 27, 1992, 13 months after the lease expired. The City then renewed the lease after waiving "any irregularities in the extension of the term of the airport lease agreement," and set the lease rate at $0.04 per square foot. Two years later, Black Hills sold the assets to Neptune Aviation, with the reversion clause still in effect. In 2002, the City agreed to eliminate the reversion clause in Neptune's lease. It was noted in an September 19 internal memo that Neptune had been in default of its lease at least twice. One lessee was improperly using City property to secure a loan. The FAA advised the City that a tenant's hangar construction loan involved a mortgage on the building and the land it sits on. The City owns the land, not the tenant. On the other side of the issue, the Mayor of Alamogordo wrote a letter to the FAA in July 2005 arguing that the reversion clauses could lead to increased City spending. He stated that assuming that the City takes possession of the improvements may not take into consideration the economic burden that the City would be assuming. In addition to the Mayor, several tenants do not like the reversion clause, since many have sold their interest to third parties for substantial financial gains. Port of Portland Diane Trudo, Contract Administrator III Aviation Business and Properties Ms. Trudo advised that the Port of Portland has standard reversion language for both the Hillsboro and Troutdale Airports. The sample ground lease for Hillsboro included a very typical reversion clause, as follows. Airport Business - Solutions Ground Lease Termination Provision Analysis Jackson County Airport Authority Rogue Valley International- Medford Airport February 2006 Title to Improvements upon Termination Section III Page 3 All Improvements (whether constructed by Lessee or the Port) located on the Premises at the expiration of the Initial Term or earlier termination of this Lease, shall become the property of the Port. Notwithstanding the foregoing, the Port reserves the right to require Lessee to remove any Improvements that have not been adequately and reasonably maintained by Lessee, from the Premises upon termination of this Lease. Such Improvements shall be removed within the time frame set forth in Section 10.5. The Port will give Lessee notice of such unmaintained Improvements it will require Lessee to remove at least ninety (90) days in advance of the Expiration Date. The Port reserves the right to require removal of Improvements on shorter notice if Lessee has allowed their condition to deteriorate during the last ninety (90) days of this Lease. Eugene Airport Carrie Martin, City of Eugene Public Works - Airport Division Eugene Airport has a policy that addresses reversion, which is entitled "Policy for Non - Commercial Hangar Site Leases." This policy is very similar to its Commercial Policy. Within the policy, it states the following: Termination - Removal of Improvements prior to expiration of an existing lease, Lessee may submit a written request to negotiate a new lease. Removal of improvements will not be required if a new lease is negotiated. If a new lease fails to be negotiated, or if the required notice is not received from the Lessee, then the Airport Manger will require the removal of the hangar and improvements and restoration of the premises at the Lessee's expense in accordance with the provisions of the lease, unless other arrangements satisfactory to the Airport Manger are made for the disposition of the hangar and improvements, whether sale, removal, or otherwise. For leases that contain automatic transfer of ownership clauses, the Airport will work with the Lessee during a reasonable period of time, not to exceed six (6) months, to retain title in the Lessee's name until a new lease is negotiated or arrangements satisfactory to the Airport Manager are made for the disposition of the hangar and improvements, whether sale, removal, or otherwise. If, after the six (6) month period of time, Lessee fails to negotiate a new lease or dispose of the hangar and improvements, then the hangar and improvements will be deemed abandoned by the Lessee. The Airport will not require automatic reversion of hangar facilities upon expiration of the term of the lease. However, the airport retains the right to withhold a new lease if the Airport Manager determines that the property needs to be used for other purposes, such as airport development, or if the hangar owner fails to maintain and renovate the hangar to comply with the minimum standards for non - commercial hangars in effect at the time. Aizport Business Solutions Ground Lease Termination Provision Analysis Jackson County Airport Authority Rogue Valley International - Medford Airport February 2006 City of Redmond Linda Pepin Section III Page 4 The City of Redmond has a standard reversion clause for their hangar leases. Ms. Pepin sent the following standard language. Ownership of Improvements. Title to all improvements, including the Hangar, to be constructed on the Premises by Lessee shall be owned by Lessee until expiration of thirty (30) years from the commencement date of this Lease or earlier termination of this Lease. All improvements, including the Hangar, on the Premises at the expiration of the term or earlier termination of this Lease shall, without compensation to Lessee, then automatically and without any act of Lessee or any third party become City's property. Lessee shall surrender the improvements to City at the expiration of the term or earlier termination of this Lease, free and clear of all liens and encumbrances, other than those, if any, permitted under this Lease or otherwise created or consented to by City. Lessee agrees to execute, acknowledge, and deliver to City any instrument requested by City as necessary in City's opinion to perfect City's right, title, and interest to the improvements and the Premises Redmond Airport Mr. Carter He advised ABS that if the property reverts, then they usually lease it back to tenant. Moreover, new airport agreements contain language that gives the tenant the first right of refusal. Termination Upon termination of the agreement, Tenant shall surrender the leased premises in good condition. Buildings constructed by the Tenant with permission from the Lessor shall not be removed. Depreciation and wear from ordinary use of the purpose for which the Tenant is responsible shall be completed prior to surrender of the lease premises. Upon termination of the agreement, the building and all improvements which are a part of the lease shall become the exclusive property of the Lessor. Upon termination of the agreement, Tenant shall have the right of first opportunity to lease the property and improvements from the Lessor for five (5) years and renewable every five years, thereafter with annual rent equal to ten percent offair market value of land and improvements. Same conditions for adjustments as set out in Section 3. Airport Business Solutions Ground Lease Termination Provision Analysis Jackson County Airport Authority Rogue Valley International- Medford Airport February 2006 Oregon Department of Aviation - Aurora State Airport Jennifer Anderson The following lease language was provided by Ms. Anderson. Section III Page 5 Surrender at Expiration - Upon expiration of the term of this Lease or earlier termination on account of default, Lessee shall surrender the Premises in good condition. Lessee's Improvements - Before expiration or other termination of the Lease term, LESSEE shall remove all furnishings, furniture, and trade fixtures that remain its property. If LESSEE fails to do so, this failure shall be an abandonment of the property, and AVIATION may retain the property and all rights of LESSEE with respect to it shall cease or, by notice in writing given to LESSEE with 30 days after removal was required, AVIATION may elect to hold LESSEE to its obligation of removal. If AVIATION elects to require LESSEE to remove, AVIATION may effect a removal and place the property in public storage for LESSEE'S account. LESSEE shall be liable to AVIATION for the cost of removal, transportation to storage, and storage, with interest at the legal rate on all such expenses from the date of expenditure by AVIATION. LESSEE hereby appoints AVIATION its agent for the limited purpose of obtaining adequate storage for the personal property of LESSEE in the event that LESSEE fails to remove its personal property as described above. LESSEE authorizes AVIATION to incur reasonable and necessary costs to store LESSEE 'S personal property in LESSEE'S name and at LESSEE'S expense, and LESSEE shall fully reimburse AVIATION for all costs so incurred. Klamath Falls Airport Linda Tepper, Business Manager Ms. Tepper advised that they have two types of leases with regard to reversion. One is a reversion lease, and the other has a buyout clause. A tenant chooses which one they want, and both reflect essentially 45 -year terms. However, the rent charged on the "buyout leases" reflects a premium rent fee. Buyout Lease Surrender of Possession Buyout Provision - In consideration of the premium rent fee referenced in Section 7. Rent, Subsection B., the Airport agrees to purchase the improvements at an appraised value. The appraiser shall be mutually accepted to the parties and shall be an MAI (or equivalent) appraiser with special knowledge in aviation and airport properties. The cost of the appraiser to be split equally between the parties. At the 45 "' year of this lease, Airport will be obligated to buy the improvements at the appraised value unless the parties agree to some other agreement prior to that date. Airport Business MEV Solutions Ground Lease Termination Provision Analysis Jackson County Airport Authority Rogue Valley International - Medford Airport February 2006 Section III Page 6 Tenant Termination - If Tenant should elect to terminate this lease at any time, the above Buyout Provision will not apply. (Sale of improvements and transfer of this lease, is not considered a termination by Tenant.) Upon early termination at Tenant's sole discretion, Tenant shall have the option of removing all improvements and restoring the property to its original condition, or giving title to said improvements to Airport. If Tenant elects to remove improvements, this must be done within ninety (90) days after termination of this lease. If Tenant fails to remove improvements, Airport may take possession of the premise. Reversion Lease Surrender of Possession - Title to all Improvements constructed by Tenant upon the Premises, and all alterations or additions thereto required by Airport to remain, shall remain in Tenant until the expiration, cancellation, or other earliest termination of this Lease. Upon said expiration, cancellation, or earlier termination of this Lease, Tenant shall have the option of removing all improvements to Airport, title to said Improvements shall vest in the Airport, and said structures, buildings, and improvements shall remain upon and be surrendered with the Premises as part thereof Title to personal property belonging to Tenant shall at all times during the term of this Lease, or any extension thereof remain in Tenant, and Tenant shall have the right at any time to remove any or all personal property of every kind and nature whatsoever which Tenant may have placed, affixed, or installed upon the Premises, provided that upon Tenant's removal of such personal property, Tenant restores the Premises to its original condition. Tenant shall have the right to remove same provided that upon any such removal, Tenant shall repair, at its own expense, any damages resulting therefrom and leaves the Premises in a clean and neat condition, with all other improvements in place. If Tenant elects to remove improvements, this must be done within ninety (90) days after termination of this lease. If Tenant fails to remove improvements, Airport may take possession of the premise. Ashland Municipal Airport Dawn Lamb The following lease language is for a commercial service provider lease. Ownership of Improvements. Title to all improvements made by Lessee of a permanent nature shall be the property of Lessee. Lessee, however, shall be required to enter into a ground lease with the City prior to any improvement being made that increases the footprint of existing structures or that utilizes additional land at the airport. Ground lease fee shall be at fair market rental value. Ai; port Business sismr Numr- Solutions Ground Lease Termination Provision Analysis Jackson County Airport Authority Rogue Valley International- Medford Airport February 2006 Section III Page 7 Prior to construction of any improvements, the parties agree to negotiate in good faith as to ownership of the improvements to be constructed. Unless previously agreed in writing between the parties, the improvements shall become property of City, free and clear of all claims of Lessee, any one claiming under Lessee or caused, permitted or suffered to attach through Lessee upon completion of construction and issuance of a certificate of occupancy. Lessee, or any one claiming under Lessee, shall indemnify and defend City against all liability and loss arising from such claims. Upkeep. The premises shall be kept in good repair, free of waste material and debris. Landscaping shall be maintained and properly watered in a reasonable fashion. Right offirst refusal. For other than month -to -month rentals, City shall have the following described right offirst refusal with respect to the interest of Lessee under this lease: Lessee shall not sell, sublease, assign or transfer to anyone other than City, unless Lessee shall have first communicated to City, by written notice, a written offer to sell, sublease, assign or transfer this lease or any interest, which offer shall specify, in commercially reasonable detail, the rates, terms and conditions upon which Lessee is willing to sell, sublease, assign or transfer this lease or any interest. City shall have a period of 30 days, following the notice, within which to accept the offer by giving Lessee written notice of acceptance. If the offer is accepted, the parties shall be obligated to close the sale, sublease, assignment or transfer in accordance with the terms of Lessee's offer. Closing shall occur within 60 days following acceptance or within such longer closing period as may be specified in the offer. If City does not accept the offer, Lessee may sell, sublease, assign or transfer the lease or any interest to any other party, provided that such a sale must be consummated within 60 days following the earlier of the expiration of the 30 day acceptance period specified in paragraph 18.1.2 for the offer or the date of any written rejection of the offer by City, and for and upon the same price, terms and conditions as those specified in the offer. City's rights under this paragraph shall apply to any subsequent or contemporaneous offer made to Lessee or Lessee's successor or successors in interest. For the purposes of this subparagraph, a devise under a will by the Lessee shall not be considered a sale, sublease, assignment or transfer. Option to Purchase Lessee's Interest. For Type B leases, in addition to the right of first refusal described above, City shall have the exclusive right and option to purchase all of Lessee 's right under this lease upon the following terms and conditions: If City exercises this option, the purchase price during the initial year of this lease for Lessee's rights under this lease will be the actual reasonable construction cost of the hangar plus 10 %. The purchase price during each subsequent year shall be the purchase price determined in the immediately preceding sentence less 1/25'x' of such purchase price for each full year the lease has been in effect. This option shall be exercised by written notice given by City to Lessee at any time, which notice shall specify that City has elected to exercise this option. Closing shall occur as soon as possible following Aiigort Business Solutions Ground Lease Termination Provision Analysis Jackson County Airport Authority Rogue Valley International- Medford Airport February 2006 Section III Page 8 exercise of this option by City and, in any event, not later than the 35th day following the date of exercise of this option. At closing, Lessee shall deliver to City a duly executed and acknowledged statutory quitclaim deed quit claiming all of Lessee's rights and interest in the premises free and clear of all liens and encumbrances of Lessee, anyone claiming under Lessee or caused, permitted or suffered to attach through Lessee. At closing, City shall pay to Lessee in cash the entire amount of the purchase price. City's rights under this paragraph shall apply to any successor of Lessee and shall apply whether or not City exercises its rights under the right offirst refusal paragraph. City may not exercise its rights under this paragraph while the Lessee who signed this lease is in possession and has not sold, subleased, assigned or transferred its interest in the lease. For the purposes of this subparagraph, a devise under a will by the Lessee shall not be considered as sale, sublease, assignment or transfer. Subleases without consent. Lessee may sublease portions of the premises for the purpose of placing other aircraft within the hangar without consent of City. Arcata/Eureka Airport Jeff Moore, County of Humboldt Mr. Moore provided this Ground Lease Language utilized by the County. OWNERSHIP OF IMPROVEMENTS Title to all improvements, including the hangar, to be constructed on the premises by LESSEE shall be owned by LESSEE until expiration of thirty (30) years and any options from the commencement date of this Lease or earlier termination of this Lease. All improvements, including the hangar, on the premises at the expiration of the term or earlier termination of this Lease shall, without compensation to LESSEE, then automatically and without any act of LESSEE or any third party become COUNTY'S property. • LESSEE shall surrender the improvements to COUNTY at the expiration of the term or earlier termination of this Lease, free and clear of all liens and encumbrances, other than those, if any, permitted under this Lease or otherwise created or consented to by COUNTY. LESSEE agrees to execute, acknowledge, and deliver to COUNTY any instrument requested by COUNTY as necessary in COUNTY'S opinion to perfect COUNTY'S right, title, and interest to the improvements and the premises. LESSEE shall have the right to remove such personal property, machinery, and equipment as may be removed without threat to the structural integrity of any building or improvement. If damage results from the removal of any such items, LESSEE shall repair such damage at its sole expense. Aispoi't Business MIMI NV Solutions Ground Lease Termination Provision Analysis Jackson County Airport Authority Rogue Valley International- Medford Airport February 2006 SECTION IV OPTIONS ANALYSIS Section IV Page 1 As researched, reviewed and presented in Section III of this document, airports have various approaches to reversions. We have considered those approaches, further researched the industry, and offer the following scenarios as possible options for consideration. Since all existing leases have generally different terms, conditions and circumstances, a range of conditions have been considered. For the purpose of Option A, buildings are assumed to be in good shape and the leasehold is not needed for a specific purpose. Option A No reversion: Existing tenant receives new ground lease The least restrictive approach to reversion would be to give an existing tenant a new ground lease and let them continue to use the total improved property. This pragmatic approach may be appropriate if the building is in reasonably good shape, and the type of land use for the leasehold property meets the needs of the Airport and its tenants. This alternative provides an incentive for tenants to maintain their buildings /hangars and make improvements over time, as well as to make sure that all Airport rules and lease conditions are met at all times. This option is also easy to manage and provides a certain stability on the Airport. However, providing an existing tenant with a new (long -term) lease may not meet Federal non- discrimination requirements if there is demand for the leasehold. This is because it would preclude opportunities for new tenants. If the ground lease is renewed without requiring the tenant to make a major new investment in the structure, the County may be in violation of the Grant Assurances because this action could be considered as a perpetual lease or the giving /donation of Airport property to a private entity (similar to the Alamogordo issue). If the County were to consider a new ground lease on existing buildings, in response to a tenant proposal involving major reinvestment in the leasehold, it would require a rational, equitable approach to determining the threshold level of investment that triggers this strategy. Moreover, a new ground lease rate must be determined inclusive of consideration of all new terms and conditions. To avoid equity problems, expenditures necessitated by deferred maintenance should not count as new improvements, even if those costs are substantial. Finally, consideration must be given to the fact that the airlines are under a residual financial structure, whereby the revenues generated by leases on the Airport serve to offset some of their costs. As such, the lack of future revenues from reverted properties may have a negative impact on the airlines. Airport Business Solutions Ground Lease Termination Provision Analysis Jackson County Airport Authority Rogue Valley International - Medford Airport February 2006 Option B Reversion: County takes over the total property Section IV Page 2 For the reversion options under which the County takes over the land and improvements, a number of issues must be considered. A major advantage of this approach is that the County would gain more control over the Airport, as there would be no tenant subleasing arrangements. The County would also gain additional revenue. However, the County would be required to commit staff time and resources to maintaining and managing the buildings. Initial building maintenance and long -term management needs for facilities that have reverted will vary. However, it is assumed that the most buildings could be re- leased in their "as -is" condition, with the new tenant responsible for all deferred and on -going maintenance (triple net lease). Without further analysis, it is not clear if the increases in rent would be sufficient to cover the increased management costs that would accrue to Jackson County. However, it has been our experience that the incremental costs associated with the management of reverted properties are nominal. If the County reverted an entire facility (not individual hangars) and re- leased it to a single entity, who would then be responsible for securing subleases, it would be appropriate for a new lease to be entered into on a triple net basis, with the new lessee responsible for all deferred and on -going maintenance. The new lease would include requirements transferring all building maintenance requirements to the Lessee, and the right for the County to make periodic inspections as to the fulfillment of this requirement. If the County decided to take over and manage a building leased to multiple tenants (T- hangars with multiple bays), building management and maintenance would require a more active and on -going presence on the part of the Airport. If facilities are surrounded by ramp or apron areas, the lease must allocate the responsibility for maintaining those areas, and for inspecting them for Foreign Object Debris (FOD). A major concern of many airports with regard to this approach, is the fear that if tenants know their property is going to revert, they are less likely to make improvements or provide routine maintenance efforts during the latter years of their lease. However, it is our experience that this is not a significant problem, and it has been averted by requiring tenants to allow for periodic inspections by Airport staff and/or engineering personnel. As a condition of their lease and to be considered as a potential continuing leaseholder, tenants are required to remedy any deficiencies discovered during the inspection within a reasonable time frame. The County could enforce this in all new leases with an eviction clause in case of non - compliance, set forth in its leasing policy. However, it should be noted that the ownership of structures and subsequent leasing of existing structures would mean that Jackson County may incur certain nominal expenditures upon vacancy and turnover of facilities. Aiipoi•t Business limmor NMI Solutions Ground Lease Termination Provision Analysis Jackson County Airport Authority Rogue Valley International- Medford Airport February 2006 Option C Property reverts to County and is re- leased to existing tenant Section IV Page 3 Under this approach, the total property (land and improvements) reverts at the end of the lease term, plus all existing option periods. However, the existing tenant would have the "right of first refusal" to lease the total property at a new "all- inclusive" rate. This is considered by some to be the least disruptive of reversion options for an airport. It is reasonable to assume if the tenant intends on re- leasing the property at lease termination, there is an incentive to maintain the improvements. In addition, the tenant is likely to adhere to Airport rules and lease conditions. This option results in less of a burden for the Airport with regard to repairs and maintenance, efforts that are generally required to attract new tenants. Moreover, the County gains more control of the Airport over time as facilities revert, yet the requirement for maintenance is reduced. This also reduces the number of subtenants. The drawback for this option is the potential that as the Airport becomes more built out, legal challenges arise if the leaseholds are not open to a competitive process. Additional challenges may be experienced in arriving at a mutually agreeable new lease rate for the land and improvements. Option D Property reverts to County and is leased through a competitive bid process The next option would be for the existing property to revert to the County, and is then re- leased through a competitive bid process. This approach generally works if the facilities do not require significant investment to make them attractive to new tenants. The County would prepare a Request for Proposal to identify the most qualified prospective tenant, as well as one who is willing to pay, at a minimum, current market rent for the land and improvements. This would satisfy the Federal non - discrimination requirements by ensuring fair access by all interested individuals. Option E Compensation for residual value of improvements The next option would be to develop a policy whereby the County purchases the improvements on the leasehold at a pre - determined residual value at the termination of the lease. Said pre - determined value could potentially reflect a percentage of the initial, verified construction costs for the improvements. The percentage would vary based upon the term of the ground lease. However, this option would likely require a review of the undelying ground rental rate to compensate for the payment of a residual improvement value. Airport Business Solutions Ground Lease Termination Provision Analysis Jackson County Airport Authority Rogue Valley International- Medford Airport February 2006 Section IV Page 4 A variation of this option was recently utilized by the Klamath Falls Airport. In Klamath Falls, the City gives two options for long -term ground leases to prospective new tenants who intend to develop aircraft storage hangars for private or corporate purposes on Airport leaseholds. The options are as follows: 1. A contract with a traditional reversion option after 40 years 2. The City reimburses the tenant for the residual value of the facility after a 45 -year lease period. Tenants choosing Option 2 are required to pay a 20 percent premium over the standard ground lease rate during the entire duration of their lease. It is Klamath Falls' opinion that the second option has the advantage of providing an incentive for the tenant to maintain the facility, and tends to make reversion less contentious because there is another option available. To make this work at MFR, the County and Airport must be prepared to implement thorough building inspections, especially in the later years of the lease. Utilizing an appraisal process at the end of the lease would not likely be cost effective, therefore a pre - determined residual schedule would need to be developed prior to entering into any new lease agreements. It should be noted that this option would work well for new leases with new improvements, but alternative options must be explored for existing improved properties, unless each existing property is appraised and a modified residual value is assigned based upon a new lease term. However, it would be recommended that new leases for existing developed properties be of a much shorter term than those for new facilities, since existing improvements would be a minimum of 20 years old at the expiration of their existing agreements. Option F Improvements are not salvageable or land is needed for other purposes Another option to assess is the scenario whereby improvements on an existing property reflect poor condition and /or utility, and are not deemed salvageable in the opinion of a County engineer after a study and inspection of the building and its systems. In this option, upon reversion at the expiration of the existing lease, the tenant would be required to demolish the building, as well as to clear and decontaminate the site. At that point, the Airport can make the site available for proposals or use the site for sponsor -built facilities or other Airport- related purposes. Under any of the building removal options, environmental remediation efforts may be required. This can be difficult and potentially contentious if the tenant indicates that the contamination was present prior to their lease. There are three options for developing new uses for newly vacated land. Airport Business Emily Solutions Ground Lease Termination Provision Analysis Jackson County Airport Authority Rogue Valley International- Medford Airport February 2006 Section IV Page 5 1. The County can lease the land back to the existing tenant, who is then required to make a new investment 2. Lease to a new (or existing tenant) after a competitive bid process 3. The Airport develops the land Ai'port Business Solutions Ground Lease Termination Provision Analysis Jackson County Airport Authority Rogue Valley International- Medford Airport February 2006 SECTION V CONCL USIONS AND RECOMMENDATIONS Section V Page 1 Whenever a governmental entity is working with the private sector, disagreements are going to occur. Discussions will be interpreted differently by each side, and documents will be reviewed and interpreted with sometimes opposing perspectives. With the addition of fmancial components, these differences can become extreme. As such, in our analysis of this issue, ABS had to continually remain cognizant that regardless of the best intentions of tenants and the County in trying to reach a mutually agreeable solution on the reversion issue at MFR, it may not be possible without external assistance. Therefore, ABS had to utilize our experience and knowledge gained from many years of experience working with other airports and other airport tenants to come to a fair and equitable and non - discriminatory solution for tenants, while still maintaining the fiduciary responsibility of the Airport and compliance with its Federal obligations. In the preparation of this document, it was obvious that certain facts had been adjusted by emotion. Moreover, after six years that included multiple meetings, intervention by elected officials, and opinions by the FAA, the County still believes that they are utilizing a fair and reasonable County -wide policy with adjustments for Airport requirements. At the same time, the tenants are convinced they are being misinformed and taken advantage of. Nevertheless, after extensive due diligence, the facts of the issue, as we find them, are as follows: • There was no conspiracy or closed door activities on the part of the County. Meetings were held as they normally were, in some cases even televised. Public notices were not provided for meetings that did not require them as a matter of policy. • The adopted policy did not impact currently existing leases. The existing agreements of hangar ground leases generally have a requirement that upon expiration of the lease, the County has the right to require the tenant to remove the improvements at the tenant's cost. • Some of the hangars are inter - connected, making removal of one hangar a problem for the remaining units. • The Airport has a waiting list for hangars and interested parties in building hangars. • Interest in Airport development from the private sector still continues since the policy was enacted. The most dominant example of this is the current and on -going expansion of two of the FBOs. • Leases prior to the adoption of the reversion policy were varied, and an audit indicated discriminatory language. As property is leased over time, it is not unusual for this to happen. Aiipoz•t Business O M▪ NI Solutions Ground Lease Termination Provision Analysis Jackson County Airport Authority Rogue Valley International - Medford Airport February 2006 Section V Page 2 • It is impractical and potentially discriminatory to place a specific dollar amount as being equal to a set lease term, as set forth in the current "investment dollars per year of lease term" policy utilized by the Airport. While it is fair to allow a private investor adequate time to amortize the cost of their investment, the ability of an individual to finance construction should not be a consideration of lease term. • Reversions cannot all begin on the same date for all tenants, since leases have been executed over a number of years and all have different lease termination dates. • County -owned property that is not part of the Airport requires improvements to vest with the County when the lease terminates. (Lease reviewed dated 1994) • The Airport is an Enterprise Fund and does not have the available capital to purchase private hangars. Past acquisitions of hangars were at depreciated value, or a property exchange without any transfer of funds. • The prospective financial impact of the lack of reversion clauses may have a negative impact on the airlines serving Medford, as they operate under a residual financial structure at MFR. • Passenger enplanements, cargo tonnage, based aircraft population and flight operations have all been forecasted to increase in the short and long -term in the Airport Master Plan. • FAA Order 5190.6a requires the airport to make all facilities and services available on a fair and reasonable term without unjust discrimination. A perpetual lease would violate this condition. After a thorough and independent analysis of all materials presented Airport Business Solutions recommends the following: 1. All new leases at the Airport should contain a provision for the leasehold improvements to revert to the County upon lease termination. Title of improvements should be vested with the County. 2. No lease term or option period of an existing lease terms would change. The terms as now stated in the lease would apply and be enforced. At the end of the term of the lease, to include any option, the tenant should have the option to remove the improvements or have the "right of first refusal" to enter into a new lease with the County under new lease terms. Rental rates for the new leases would be at the prevailing market rate for land and improvements. Ai, ort Business - Solutions Ground Lease Termination Provision Analysis Jackson County Airport Authority Rogue Valley International- Medford Airport February 2006 Section V Page 3 3. Existing hangar leases scheduled to terminate prior to 2012 would be granted an option to extend their lease to 2012 at their current lease terms. Beginning in 2012, they would have the "right of first refusal" to enter into a new lease with the County. The rental rate for the new leases would be at the prevailing market rate for land and improvements. 4. The term for new non - commercial ground leases would be 15 years, with one 10 -year option. If the new hangar is to be sublet or used for commercial purposes, commercial rules and regulations, in addition to commercial lease rates and terms, would apply. 5. The term for non - commercial leases of improved properties, whereby the improvements are owned by the County /Airport, shall have a term not to exceed 1 year, with no renewal options, and a 60 -day cancellation clause. 6. The term for commercial ground leases would reflect a term based upon the level of capital investment and contribution to the economics of the Airport. Lease terms would be at the discretion of the Airport Authority, but shall not exceed 50 years, to include all option periods. 7. The term for commercial leases of improved properties, whereby the improvements are owned by the County /Airport, shall have a term not to exceed 5 years, with no automatic renewal options. 8. Non - commercial leases should have a provision that if a hangar is sublet or used for commercial purposes, the County /Airport shall be paid ten (10 %) percent of the sublease rent and /or commercial revenues, in addition to the required land/property rent. 9. No "formula" for lease term predicated upon investment is suggested. Rather, it is recommended that each lease be carefully reviewed and compared to similar and competing lease terms on the Airport to maintain a "level playing field" and avoid any concerns over inequitable treatment of commercial tenants on the Airport. 10. Lease rates for land, hangars and other structures would be at the prevailing market rental rate, and should be adjusted annually during the term of the lease at a fixed percentage of not less than three (3 %) percent, or the Consumer Price Index (CPI). 11. Property maintenance requirements in any revised lease documents must be clearly defined and strictly enforced, and any variance from the requirements should be considered a condition of default. Air port Business Solutions Ground Lease Termination Provision Analysis Jackson County Airport Authority Rogue Valley International - Medford Airport February 2006 Section V Page 4 12. In the case of involuntary early termination of a lease (not including default), which is caused by the County's need to further develop the Airport, a depreciated value for the improvements will be established for an equitable settlement. 13. In extreme and special circumstances, on a case -by -case basis, the County Administrator may review a lease due to unusual circumstances and make recommendations to the Board of Commissioners relative to lease terms offered to a tenant. Aiiport Business Solutions