If we followed the rules governing airport usage, funding, and compliance word-for-word, I guarantee you that every single hangar owner (and airport sponsor for that matter) would be in violation and expose their airports to the potential risk of losing their Federal grant funding for what is being stored in hangars built on land assigned as Aeronautical Use. If you are asking the question, “how does what I’m storing in my privately owned or rented hangar affect how my airport qualifies for Federal funding?” then you’ll be surprised at the answer.
In the last issue of HangarSphere, we published an article about how some airports were cracking down on individuals living in or storing unapproved items in rented hangars owned by the airport (HangarSphere May/June 2014). The crackdowns in Hawaii were a direct result from the fear of potentially losing FAA airport grant funding for violation of FAA Grant Assurance 19, Maintenance and Operations. The key wording to pay attention to is from 19.a…..”It [the sponsor] will not cause or permit any activity or action thereon which would interfere with its use for airport purposes.”
Assurance 19 and 29 (Airport Layout Plan) have directly impacted how plots of land within the Airport Layout Plan (ALP) are defined and utilized. Land is assigned to two primary categories as either Aeronautical Use or Non-Aeronautical Use. The methods of deciding how the land is defined can appear arbitrary at times. Hangars are built on land that is categorized as aeronautical use and therefore, any object or item not related to aeronautical use stored within the hangar could be considered a violation under Assurance 19 and/or 29. Violations cited in the past include tools, golf carts, cars, RVs, boats, and even aircraft that are being built or rebuilt.
Below are outtakes from the Airport Sponsor Assurances published by the FAA earlier this year.
The airport and all facilities which are necessary to serve the aeronautical users of the airport, other than facilities owned or controlled by the United States, shall be operated at all times in a safe and serviceable condition and in accordance with the minimum standards as may be required or prescribed by applicable Federal, state and local agencies for the maintenance and operation. It will not cause or permit any activity or action thereon which would interfere with its use for airport purposes.
It will keep up to date at all times an airport layout plan of the airport showing the location of all existing and proposed nonaviation areas and of all existing improvements theron.
As one may see, if you interpret it literally, things can get very ugly, not just for hangar renters but even for airport sponsors and those that built or plan to build their own hangar on leased airport land. Even if you built your hangar and are planning to amortize it over the course of the 15, 20, 30 or 40-year land lease, the FAA still stipulates that regardless of who owns the structure (airport sponsor or private entity), the structure is still subject to the rules governing the land’s usage upon which your hangar sits.
Therefore, it could be argued (and has already been argued per the crackdown in Hawaii) that just about anything NOT attached to your airplane must go….artwork, tools, the barbecue grill, the U.S. flag hanging on the wall, the tables and chairs stored for monthly Young Eagles and EAA Chapter meetings, the bicycle used to get to your friend’s hangar two alleys over, your modified golf cart aircraft tug, etc. Airport sponsors are also at risk as some have already been penalized for storing city vehicles and have been forced to evict police cars from hangars built on land designated as Aeronautical Use.
Many court cases, including Valley Aviation Services, LLP v. City of Glendale, AZ, have resulted in lawsuits where there really is no winner. Millions of dollars are at stake and regardless of who wins in the courtroom, lessons will be painfully learned by all sides. But what are the lessons learned? Does the end result actually improve the mission of the airport and how it serves aviation and the community in which it sits? Or, do the rules of compliance (Assurances) actually prohibit the airport from fully monetizing its land assets and diminish its ability from reaching the ultimate goal as outlined in Assurance 24 Fee and Rental Structure, to “make the airport as self-sustaining as possible…”
But before I start pointing fingers accusing airport managers of being completely unreasonable, hangar owners as being Prima donnas, and the FAA as being the evil stepfather, let’s take a further look at their perspectives. There’s an opportunity for a positive outcome here, I swear it.
The Airport Sponsor’s Perspectives (Administrator, Authority, Manager, City, County, etc)
The position the airport sponsor is in is probably the least desirable. Most airports are usually land rich but have operational and improvement budgets that leave more to be desired. When sponsors accept Federal grants for airport improvements, they do so knowing there exist many caveats, provisions, and obligations in the form of Assurances that must be met and adhered to. These grant assurances (not the grant money itself) are meant to protect, develop, operate, maintain, and keep the airport serviceable for the flying public as prescribed by the FAA.
However, the rules in which the airport must operate when accepting Federal grants can actually create an environment where following the assurances may actually prohibit its efforts to meet the goals stated above and most importantly, as outlined in Assurance 24 Fee and Rental Structure, make it more difficult to “make the airport as self-sustaining as possible….” For example, if the FAA is really going to follow through with enforcing rules of what can be stored in one’s privately owned hangar by forbidding anything outside of essential items for the mission of flight, airports will lose a tremendous amount of private sector investment as the incentive to invest is greatly diminished.
The Assurances have the potential to place the airport sponsor in a tough position. It prohibits cities, states, or counties who own airport land and are its sponsor from using their land designated as aeronautical use for nonaeronautical use purposes without FAA review and approval if fair market value rates aren’t applied. Instances have already occurred where city police cars have been forced from free storage in surplus aircraft hangars to commercial storage providers elsewhere in the city. If the FAA can write their own exemption from the rules in Assurance 19.a “…other than facilities owned or controlled by the United States…,” than it might be worthwhile to extend the same exemption to government counterparts at the state, county, and city levels but only when there is no demand for aircraft storage.
Here lies a simple question. Should sponsors follow the rules and potentially starve for grant money or break the rules and possibly be self-sustaining? It appears sponsors have been unwillingly painted into a corner with the only real option to entertain is to wait for that handout from the Feds, which may be a poison pill in disguise.
The Hangar Owner’s Perspective
Here is a typical scenario. The hangar owner took the financial risk, made the investment, improved the land, built the structure, provided high-paying trade jobs, increased the value and utility of the airport, and did so all on their own dime and all to the taxpayers’ benefit. The hangar owner did this in full awareness that he/she may lose the entire structure at the end of the land lease and essentially be evicted from the airport if no other land or hangar space can be secured if unable to successfully renegotiate the land lease.
In addition, the airport received capital improvement from the private sector with absolutely no cost for the new facility. The state and local municipalities will receive annual revenues for fees collected for land lease. Furthermore, some states will collect annual property tax based upon the value of the structure for the length of the lease. Taxes on fuel sales and other associated sales will continue to fill public coffers and keep skilled tradesmen and women employed.
In reality, no harm comes from storing non-aviation related items in a hangar if room permits and fire codes are respected. In fact, the FAA and the airport sponsor can not truly expect a private individual or corporation to incur the cost of building a hangar to house a $40,000 or $40,000,000 aircraft and not at least put some nice amenities within it to support not only the aircraft but your personal lifestyle and/or your professional brand. Storing one’s boat, classic car, and/or snowmobile in one’s hangar, in addition to an aircraft, is a concession the FAA should consider in exchange for the development of the airport. In absolutely no way, shape, or form does it “interfere with its use for airport purposes.”
In a world of legal precedents and with respect to Assurance 22 Economic Nondiscrimination we should all take time to review how the founders of Google have been able to impact Hangar 1 at Moffett Field. Through an investment in the tens of millions, they are demonstrating how private sector funds are revitalizing an airport and its facilities through brilliant compromises with federal agencies (GSA and NASA) and actually bring jobs and additional revenues to a region all through common sense business practices at no cost to the taxpayer. If it can work for Google and Moffett Field, it can work for thousands of hangar owners and their local airports. If Google’s subsidiaries are allowed to infuse their brand, business ideas, and culture within an airport, then GA and corporate flight facilities should not be discriminated against and prevented from doing the same.
The FAA’s Perspective
The FAA represents our Federal Government and its interests in providing a safe and efficiently operating network of airports and airspace. Aviation, as we all know, is expensive. Aircraft, infrastructure, fuel, and the human resources required to organize and manage the aviation machine requires tremendous amounts of public funding and private sector investment.
It is completely reasonable for the FAA to place provisos that must be met by airport sponsors when they elect to receive federal grants. These Assurances are meant to safeguard the operation and long-term use of the airport from possible abuses.
It would be unfair to point out problems in our aviation infrastructure and then not suggest possible solutions. Therefore, a moment will be taken to do just that. To the untrained eye, all airports appear the same. They have runways, hangars, fuel farms, an FBO or two, perhaps an airline terminal, etc. The differences are found in what isn’t seen. Airport ownership, funding, volume of air traffic, type of air traffic, surrounding infrastructure, surrounding demographics, and surrounding business activity create a unique environment at each and every airport.
A cookie cutter approach in grant assurances just isn’t equipped to meet the needs of these diverse airport settings. The growing debate over what can and cannot be stored in a hangar is just a symptom of a much bigger problem. However, by addressing this problem, we might actually explore options that might bring in greater airport revenues, permit greater flexibility as to what one may do with their rented or owned hangar, trigger greater private development at public airports by reducing needless bureaucracy, and reignite the dying flame of general aviation.
Here are some ideas….
Laissez Faire – A culture of storing incidental items in hangars has existed and grown with aviation since the Wright Brothers’ first flight. I usually don’t side with the French but perhaps a laissez faire approach would be best in this instance. Here is why.
- Nearly every tenant and every airport sponsor would be in violation.
- Enforcement would suppress further an already deflating general aviation industry.
- Enforcement would kill any further efforts for hangar condo developers and airports would lose out on private investment for capital improvements.
- Enforcing a rule that is little known among airport tenants and airport managers would trigger a mountain of lawsuits that would divert too much of the FAA’s already limited resources.
- It would kill a culture that is uniquely American. Any reason to get out to the hangar to work on the airplane, enjoy a BBQ cookout, work on your other toys, and host a social event or fundraiser should be embraced by the FAA and the airport sponsor as an airport with no activity is a dead airport.
Develop an FAA Approved Guideline –
Develop an FAA Approved Guideline – While researching this article, I found a letter on the web written from FAA’s Manager of Airport Compliance, Kevin Willis, outlining his interpretation of what can and cannot be stored in a hangar. This is the only itemized list found to date and it is in the form of a letter, not part of any official guideline or manual. It was written on July 12, 2012, which ironically, shares the same date of HangarSphere’s launch. You can view this letter HERE. The list is very short.
Later in the year on November 8, 2012, an FAA-sponsored slide show was created by Steve Engebrecht, P.E. entitled Compliance Update and Topics. On page 30 of this 33-page presentation, it states below the header of “Non-Aeronautical Use of Hangars-Lessons Learned” that “Incidental non-aeronautical is okay.” A boat, an antique car, or an ATV tucked in the corner of a hangar could definitely be argued as “incidental use.” This is a grey term and I beg the FAA to develop a standardized list that isn’t grey as it only obfuscates the rules and conflicts with the letter written by Kevin Willis only four months earlier that same year.
Fortunately, after a failed attempt to speak to Mr. Willis directly, he had Marcia Alexander-Adams from the FAA’s Office of Communications reach me. Through friendly conversation and further email correspondence, I learned that the FAA is, in fact, in the “process of producing specific guidance on what may be allowed in hangars.” I requested to be part of that discussion but have not heard back as of the time of this writing. HangarSphere along with airport sponsors, developers, FBOs, and hangar owners should all participate in this discussion.
Implement a FMV (Fair Market Value) Schedule –
It is very clear, while reading the list of grant assurances, that any land labeled as aeronautical use but used as nonaeronautical use must be charged at the FMV. In the case of storing boats and other non-flying vehicles in one’s hangar, determine a schedule that best reflects the FMV for storage space per square foot and charge the owner based upon the total square footage of the vehicle’s footprint. This is a common formula for renting hangar space in a community hangar and is a simple solution to this potential Goliath of a problem. It creates greater utility of one’s hangar and their investment, creates a modest increase in revenue for the airport, avoids the need for lawsuits, satisfies the grant assurances as outlined by the FAA and therefore enables the airport to receive more grant funding.
Create Experimental Airport Enterprise Zones–
Let’s take a couple dozen existing airports and allow their sponsors to write their own rulebook AND keep grant funding in place. These airports can serve as an experiment to see what airports can do under rules they were empowered to create. Let’s learn from them and take what works and discard what does not. If this model is successful, let’s continue to broaden the number of airports that can operate in this fashion.
Privatize, Privatize, Privatize!!!–
There exist thousands of airports in the United States. Most are public but there are many great success stories of privately owned airports both large and small. Their business models take advantage of their land resources, for-profit perspectives, financial flexibility, and freedom from having to comply with sometimes-constrictive FAA Assurances. Good examples of private airports include Poplar Grove Airport (C77) in northern Illinois and Texas’ West Houston Airport (KIWS) as both airports offer fee-simple land allowing homes to be constructed with access to the runway.
Anyone of the above ideas presents a solution to the growing debate and conflict about what one can store in your OWN hangar. But more importantly, the ideas above may also help airports with the deeper problem of achieving the most important assurance, self-sustainability.
The key takeaways here are that of critical review, concessions, compromises, clarifications of the rules, and common sense. Together, these will help create a paradigm shift in how publicly funded airports will be funded and managed in the future. I swore I would present some positively beneficial solutions to the problem. All it takes is a blank sheet of paper to get the ball rolling.