Private hangar transition to airport-owned

JordanGrant · #1 08-12-2018, 02:52 PM

We are going through a little airport drama recently and it's made me wonder about what others have experienced around the country. The hangar land leases here are written such that the airport may take possession of the hangar structure (a free-standing building) at the termination of the land lease period. So I'm wondering - have any of you had experience with a privately-owned hangar transitioning to an airport-owned hangar after a refusal to renew a land lease? What did the new lease terms ended up looking like to you? At one airport here, the director has stated his plan NOT to renew land leases, and instead take possession of the hangars so he can triple the lease rate, under the logic that the airport would then be leasing a hangar structure and land. Is this a typical experience out there?

Thanks for any insight you have,

Vern · #2 08-12-2018, 03:02 PM

Same drama going on here in Peachtree City,ga
The faa policy seems to be prompting this. Once any organization taps into the ?free? government money source they own the organization in spite of it being the people?s money in the first place

We had a huge turnout of Falcon RV members last week at our airport authority meeting to fight this battle

Our airport managers keep quoting the faa as requiring these policies

Sue · #3 08-12-2018, 03:04 PM

If he wants be unreasonable about it contact
An attorney and see if there can be at least an
Injunction filed, if not there?s always that dreaded
Spontaneous combustion?

dmaib · #4 08-12-2018, 03:17 PM

I used to own a hangar on a city owned airport. The land lease for the hangar was an initial period of 20 years and an option to renew for another 20. I believe that kind of arrangement is not unusual in this situation. If the lease does not have a right to renew clause, you will probably have a hard time fighting it.

JordanGrant · #5 08-12-2018, 03:30 PM

David, this lease has a renewal clause, but with "mutual consent" of the airport. So, if they decide not to consent, there will be no renewal. That's what it sounds like the airport is going to do, and I don't think there are any realistic legal options to fight it. The airport seems to be on pretty solid legal footing. I know those kinds of terms are out there in other places, but I'm curious how many airports have actually gone all the way on that kind of option and taken over the buildings. I'm aware of a couple of situations where the airports stopped renewing leases so they could re-purpose the land under the hangars, but I'm not personally familiar with any that actually took over the buildings and then just turned around and leased them out at higher rates. It's probably happened, I'm just not familiar with them personally.

alpinelakespilot2000 · #6 08-12-2018, 05:06 PM

Quote:

Originally Posted by JordanGrant

We are going through a little airport drama recently and it's made me wonder about what others have experienced around the country. The hangar land leases here are written such that the airport may take possession of the hangar structure (a free-standing building) at the termination of the land lease period. So I'm wondering - have any of you had experience with a privately-owned hangar transitioning to an airport-owned hangar after a refusal to renew a land lease? What did the new lease terms ended up looking like to you? At one airport here, the director has stated his plan NOT to renew land leases, and instead take possession of the hangars so he can triple the lease rate, under the logic that the airport would then be leasing a hangar structure and land. Is this a typical experience out there?

Thanks for any insight you have,

Does your existing lease allow you to remove the hangar at the end of the lease?

My airport previously gave out leases that, at the end of the term (25 years), allowed the county to terminate the lease or sign a new lease at its discretion, but also allowed the owner to remove the hangar if they so chose. This is good for us, in that it gives the county incentive to offer a new lease to the existing owner. This is the situation I'm in until my existing 25-year lease is up in 2021.

However, the current attitude and lease language in newer leases includes a "reversion" clause. This means that at the end of the next lease (length still to be determined), the county will assume ownership of my hangar. This appears to be a growing trend as airport authorities, especially those in cash-strapped localities, see renting out originally privately built/owned hangars as a future revenue source.

As long as there is a reversion clause in your new lease, I doubt there's much you can do about it, short of trying to get airport users to pressure the airport authority into better lease terms, perhaps on the grounds that it would bring in more new leaseholders rather than drive the existing ones away.

Tankerpilot75 · #7 08-12-2018, 05:14 PM

I?m wondering, since they don?t technically yet own the structure can?t the group of hanger owners just tear down and remove their structures. Taking the hangers down and people moving their planes to another airport I think would send a pretty strong message to the airport board.

Jrskygod · #8 08-12-2018, 06:13 PM

I'm on the airport board of our local city owned airport. The ground lease requirements were just recently updated and more closely resemble FAA wishes. We have a 20 year lease with an additional 20 year option by mutual agreement. We have no individually owned hangers and no applicants.

As a developer/builder I expressed my opposition to the situation to no avail. We desperately need hangers at our airport but the city will not fund them unless they get a grant. My argument centered basically around the fact that no one in their right mind would take the financial risk to construct hangars and then give them to the city after 20 years if the city chose to not renew. Heck with the rent structure in the area it will take 10 or more years to just pay them off. Now the city is discussing assessing a lease rate hike if you do not fly often enough or buy fuel from them. This will not happen but it just goes to show the mindset. What they will do however is just not renew the year to year leases they have when renewal time comes around to hopefully fill the hangar with a plane that is used often enough according to their criterion.

Issues like this are prevalent across the country where there is a shortage of hangar space and cities and counties own the property most of which was given to them as abandoned air bases. If you are in an area where there is space in excess - lucky you. For the rest of us we just have to deal the best we can with these unfair leases and hope for the best, or join a private airport community and build, buy or lease there.

And for those that want to fight city hall - well good luck to you. Unless they have violated a FAA regulation or mandate there is no way FAA or the State DOT will get involved and when they do they just seem to drag their feet to the point of non-involvement. Oh and by the way, you get to pay legal fees twice - yours directly and theirs through your taxes.

rv7charlie · #9 08-12-2018, 06:22 PM

The lease is the lease. But putting it on the FAA? I'd be asking for proof.

OkieDave · #10 08-12-2018, 06:36 PM

Quote:

Originally Posted by Tankerpilot75

I’m wondering, since they don’t technically yet own the structure can’t the group of hanger owners just tear down and remove their structures. Taking the hangers down and people moving their planes to another airport I think would send a pretty strong message to the airport board.

That will depend upon the terms of the lease. It is very common for any "attached" improvement to become a permanent part of the property, not removable without the owner's permission.

In other words, ask a (local) lawyer.