SANTA MONICA AIRPORT COMMISSION JANUARY 27, 2014 MEETING AIRPORT TENANT REQUIREMENT EVALUATION

SANTA MONICA AIRPORT COMMISSION JANUARY 27, 2014 MEETING General Aviation Parcel 1948 Instrument of Transfer Marsha Parcel Acquired by City in 1949 Non-Aviation Parcel Released in 1984 AIRPORT TENANT REQUIREMENT EVALUATION

SANTA MONICA AIRPORT COMMISSION JANUARY 27, 2014 MEETING Presentation Airport Parcel Map ANCA of 1990 1948 Instrument of Transfer 1984 Santa Monica Airport Agreement 1994 Grant Agreement

SANTA MONICA AIRPORT COMMISSION JANUARY 27, 2014 MEETING The Airport Parcel Map identifies three parcels, each of which contains buildings and/or land rented to aircraft users, to for-profit aviation businesses known as Fixed Base Operators ( FBOs ) and/or to non-aviation users: 1) General Aviation Parcel is controlled by all three agreements. 2) Non Aviation Parcel was released from aviation use in 1984. 3) Marsha Parcel is controlled by the 1984 Airport Agreement and 1994 Grant Agreement. This parcel contains about 2,000 feet of the runway. City Attorney Marsha Jones Moutrie disclosed this parcel during recent litigation so it is referred to as the Marsha Parcel to simplify identification.

LAWS AFFECTING SANTA MONICA AIRPORT? AIRPORT NOISE AND CAPACITY ACT OF 1990 (ANCA) 1948 INSTRUMENT OF TRANSFER 1984 SANTA MONICA AIRPORT AGREEMENT 1994 GRANT ASSURANCES

Airport Noise and Capacity Act Prohibits Access Limitations. Penalties for Non-Compliance: No Future Federal Aviation Funds No Passenger Fees No Access Limitation lawsuit filed by FAA. Does not apply to Santa Monica Airport because we don t take federal aviation funds and don t charge passenger fees.

Airport Noise and Capacity Act e-cfr Data is current as of August 10, 2012 Title 14: Aeronautics and Space PART 161 NOTICE AND APPROVAL OF AIRPORT NOISE AND ACCESS RESTRICTIONS Subpart F Failure To Comply With This Part Browse Next 161.501 Scope. (a) This subpart describes the procedures to terminate eligibility for airport grant funds and authority to impose or collect passenger facility charges for an airport operator's failure to comply with the Airport Noise and Capacity Act of 1990 (49 U.S.C. App. 2151 et seq. ) or this part. These procedures may be used with or in addition to any judicial proceedings initiated by the FAA to protect the national aviation system and related Federal interests. (b) Under no conditions shall any airport operator receive revenues under the provisions of the Airport and Airway Improvement Act of 1982 or impose or collect a passenger facility charge under section 1113(e) of the Federal Aviation Act of 1958 if the FAA determines that the airport is imposing any noise or access restriction not in compliance with the Airport Noise and Capacity Act of 1990 or this part. Recision of, or a commitment in writing signed by an authorized official of the airport operator to rescind or permanently not enforce, a noncomplying restriction will be treated by the FAA as action restoring compliance with the Airport Noise and Capacity Act of 1990 or this part with respect to that restriction.

LAWS AFFECTING SANTA MONICA AIRPORT? AIRPORT NOISE AND CAPACITY ACT OF 1990 (ANCA) 1948 INSTRUMENT OF TRANSFER 1984 SANTA MONICA AIRPORT AGREEMENT 1994 GRANT ASSURANCES

1948 Instrument of Transfer Purpose: To transfer land leased to the federal government during the war back to the City in 1948. Expires: No expiration date. Land controlled: General Aviation Parcel only. Key Provision: the land, buildings, structures, improvements and equipment in which this instrument transfers any interest shall be used for public airport purposes for the use and benefit of the public, on reasonable terms and without unjust discrimination and without grant or exercise of any exclusive right for use of the airport. [Emphasis added]

1948 Instrument of Transfer The ground lease rights transferred by 1948 IOT from FAA to City of Santa Monica expired in either 1947 or 1953 so there are no remaining reversionary rights. 1948 Instrument of Transfer (IOT) Penalty Provision: Summary - The rights transferred by the Instrument of Transfer shall be returned to FAA 60 days after City doesn t correct default. Analysis: Since no rights were transferred to the City on the ground leased property in 1948 or the rights expired in 1953, the City does not have to transfer any rights back to FAA on ground leased property. Conclusion: The City does not have to use the property ground leased to FAA in 1941 and returned under the 1948 IOT as an airport. The FAA [CAA] rights on that property expired.

1948 Instrument of Transfer Worst Case Assumption: We have to operate the General Aviation Parcel in perpetuity so we are going to remove both the parcel and law from the discussion. The 1948 Instrument of Transfer DOES NOT SAY we: A) Have to maintain a 5,000 foot runway B) Have to sell aviation fuel C) Have to rent space to aircraft companies We only must operate the airport for public use and on reasonable terms without unjust discrimination or granting exclusive rights.

LAWS AFFECTING SANTA MONICA AIRPORT? AIRPORT NOISE AND CAPACITY ACT OF 1990 (ANCA) 1948 INSTRUMENT OF TRANSFER 1984 SANTA MONICA AIRPORT AGREEMENT 1994 GRANT ASSURANCES

1984 SM Airport Agreement Purpose: To settle litigation with the FAA in 1984. Expires: July 1, 2015. Land controlled by this agreement: General Aviation Parcel and Marsha Parcel. Key Provisions: 1) Runway configuration (Sec 9) - City must maintain the 5,000 foot runway until July 1, 2015. 2) Aircraft parking and fuel sales (Sec 13) City must provide aircraft parking and allow fuel sales until July 1, 2015. 3) Rent space to aviation companies (Sec 14) City must rent land and buildings to aircraft companies until July 1, 2015.

LAWS AFFECTING SANTA MONICA AIRPORT? AIRPORT NOISE AND CAPACITY ACT OF 1990 (ANCA) 1948 INSTRUMENT OF TRANSFER 1984 SANTA MONICA AIRPORT AGREEMENT 1994 GRANT ASSURANCES

SANTA MONICA AIRPORT COMMISSION 2015 VISIONING PROCESS General Aviation Parcel 1948 Instrument of Transfer Marsha Parcel Acquired by City in 1949 Non-Aviation Parcel Released in 1984 AIRPORT PARCEL MAP

1994 Grant Assurances Purpose: Requirements for the use of funds provided by the FAA for aviation improvements. Expires: June 28, 2014 (20 years after date of acceptance of grant offer, not funding). But City took additional $250,000 Grant in 2003 so FAA contends Grant expires in 2023. Land controlled by this agreement: General Aviation Parcel and Marsha Parcel. Key Provision: Economic Nondiscrimination (Sec C.22) [City] will make its airport available as an airport for public use on fair and reasonable terms and without unjust discrimination, to all types, kinds, and classes of aeronautical uses. Assumes FAA is correct that grant runs until 2023.

1994 Grant Assurances Worst Case Assumption: We have to operate the Airport until 2023. The 1994 Grant Assurances DO NOT SAY we: A) Have to maintain a 5,000 foot runway B) Have to sell aviation fuel C) Have to rent space to aircraft companies

Penalties for Non-Compliance: No Future Federal Aviation Funds No Passenger Fees 1994 Grant Assurances

Summary Result No Aviation Tenants Are Required After July 1, 2015 No Fuel Sales Are Required After July 1, 2015. If FAA Conducts An Administrative Hearing and Broadly Interprets A Provision in One of Our Other Agreements or ANCA to Require Aviation Tenants, The Penalty is 1) No New Airport Funds; and 2) No Passenger Fees. A Small Class-B airport with limited operations.