FAA Docket No. 16-08-01 Director's Detern1ination

DeKalb County, FAA Docket No. 16-05-13 (February 1,2006) (Director's Determination)

(Gate 9), the Director stated:

The FAA fully expects that pursuit of aeronautical development would reasonably

include pursuing any necessary and appropriate alteration or added detail to an

Airport Layout Plan. Infact, the airport layout planning process is a tool in

planning for appropriate development to meet aeronautical demand ...

The Director's role in determining compliance is to determine whether or not a

sponsor has a program in place that reasonably adheres to its Federal obligations.

While a sponsor is not obligated to agree to a specific lease proposal, a sponsor is

responsible for exercising its rights and powers to be responsive to aeronautical

demand to provide aeronautical facilities in a manner that is consistent with its

Federalobligations.]7 [Gate 9 DD, p. 14]

The Director also notes here that Montrose County is not simply citing its ALP as

prohibiting it from accommodating JetAway and walking away, as was the case in~.

Instead, the County has engaged in extensive discussions with JetA way to attempt to

accommodate JetAway's preferred location for an FBO, despite a problematic throughthe-fence access point. It has cited actual reasons for not preferring the FBO alternatives

at JetAway's location and it has offered an alternative location.I8 The County

summarizes its reasons, stating that it

wants any JetAway FRO operation [to be J on the Airport and it wants the throughthe-fence issues of the Off-Airport Agreement created by JetAway, resolved and

addressed The County submits it is acting consistently with the Director's

Determination in Docket No. 16-06-01. Based on feasibility studies conducted by

the County's expert and the unjustly discriminatory effect of the Off-Airport

Agreement for the on-airport commercial aeronautical activities, the County has

identified a second FBO location. It is clear from the Director's Determination that

an on-airport, non-adjacent site is acceptable. [FAA Exhibit 1, Item 3, pp. 37-38J

It is JetAway that has constructed this red herring. JetAway holds this perception that the

ALP process mandates that the County must accept JetAway's off-airport parcel, because

it was once depicted on an ALP as a potential future location for an FHa. This is clearly

not the case and the Director believes it is again important to stress that an airport's

planning process is dynamic, not static.

Considering the above, the Director grants the County's motion to dismiss the allegation

of the violation of grant assurance 29, Airport Layout Plan. The County's planning has

been consistent with the requirementhat airport development be safe, useful and efficient.

17 The Director distinguishes the extant case from ~ by noting that DeKalb did not cite an airport

benefit obtained by adhering to its ALP, nor did it provide any reasonable option for access and the FAA

had independent knowledge of stymied aeronautical development at DeKalb's airport. 18 This alternative location has in fact been 'identified' in part in draft planning documents submitted to the

record by JetAway, and had been noted by the Director in the 2006 JetAway DD at fn. 302. See FAA

Exhibit 1, Item 1 exh. 12, p. D.13, exh. 17, p. 2, exh. 26 and Item 5, exh. 43, pp. E.13 & E.17.

Page 25 of 50
FAA Docket No. 16-08-01 Director's Determination

Issue 3

Whether the County has granted an exclusive right for the use of the Airport in

violation of grant assurance 23, Exclusive Rights, 49 V.S.C. § 40103(e) and 49

V.S.C. § 47107(a)(4) by means of land leases to Jet Center Partners (JCP).

Specifically, in its Complaint, JetA way alleges that the Respondent has granted exclusive

FBO rights to JCP in conscious and intentional violation of the guidance contained in AC

No. 150/5190-6 and FAA Order 5190.6A 19 [FAA Exhibit 1, Item 1, p. 22] JetAway

presents nine (9) counts of the granting of an exclusive right. Under Issue 3, we examine

the allegations associated with the express granting of an exclusive right by the leasing of

available property to JCP, counts 1-5,8 & 9. Counts 6 & 7 are discussed under Issue 4.

Express Exclusive Right Count 1

'Identified' on-Airport FBO parcels

In its Complaint, JetAway alleges, "The County has leased all Airport land identified for

FBO locations to JCP ." [FAA Exhibit 1, Item 1, p. 22]

The County answers that the allegation is untrue, stating, "the Airport has a 418,698

square-foot on-Airport site identified and available." (the "9-acre Site) [FAA Exhibit 1,

Item 3, p. 28 and exh. D] Also, in its Answer, the County moves to dismiss the allegation

that the County has granted an exclusive right, stating:

...as contemplated in the Director's Determination in Docket No. 16-06-01, the

County has identified and made availablefor leasingforFBO operations a 418,698

square foot on-Airport site [9-acre Site] which is not adjacent to JetAway's throughthe-fence operation. If JetAway wishes to lease this site for FBO operations, the

County will issue an RFP. [FAA Exhibit 1, Item 3, p. 4]

JetA way contradicts its own argument, stating, "At all times relevant there has been and

presently is sufficient land available on Airport for a second FBO as the Director noted in

his Determination in FAA Docket No. 16-06-01." [FAA Exhibit 1, Item 1, p. 18] JetAway

also states:

Land is and has been available on the Airport for a second FRO, as the Director

noted in his Determination, and the most logical parcel of land for the FRO -now

that the County has leased all available land on the west side of Runway 13/31 to

19 The Advisory Circulars and Orders do not impose Federal obligations. Rather Federal law, grant

assurances and quitclaim deeds impose obligations. FAA Orders provide guidance to FAA employees in

carrying out their jobs and responsibilities. Advisory circulars provide advice to a sponsor in complying

with the Federal obligations. The Exclusive Rights AC provides basic information pertaining to the

Federal Aviation Administration's (FAA's) prohibition on the granting of exclusive rights at federallyobligated airports. This AC provides guidance on how an airport sponsor can comply with the statutory

prohibition on the granting of exclusive rights. [See AC 150/5190-6 (1. Purpose)]

Page 26 of 50
FAA Docket No. 16-08-01 Director's Determination

JCP, including both FRO Locations One and Tw020 -is the South Tract [on-airport

parcel adjacent to the through-the-fence access point] which is adjacent to

[JetAway's off-airport parcel and hangar]. [FAA Exhibit 1, Item 1, p. 43]

Furthermore, as stated above, JetAway submitted evidence with its Complaint and Reply

that shows general aviation development consistent with an FBO on or near the 9-acre Site.

See FAA Exhibit 1, Item 1 exh. 12, p. D.13, exh. 17, p. 2, exh. 26 and Item 5, exh. 43, pp.

E.13 & E.17. This alternative location was evident to the Director in the 2006 JetA way

DD. [See 2006 JetAway DD, page 35, at fn. 302] See map of Airport at FAA Exhibit 2.

Also JetA way misapplies FAA policy and precedent to the standard of compliance with

regard to exclusive rights. As stated above, "identification" of parcels for FBO-use is not

necessarily relevant to an allegation of the granting of an exclusive right. As cited above

from Pacific Coast. planning documents do not necessarily prevent an airport sponsor from

pursuing alternative airport benefits or the public's aeronautical interests. Rather, the

County is using its planning process to explicitly identify a site that is fully on the Airport.

Also, the County is not simply pointing to its ALP, and no other reason, to not favor

JetAway's preferred FBO site that is associated with a through-the-fence access point.

JetAway's citation of its submitted planning evidence is contradictory and its application

of the standard of compliance is inapt. Consequently, JetAway's arguments do not survive

the County's explicit offering and identification of an alternate FBa site (9-acre Site). To

be in compliance with the grant assurances, itis not necessary for the County to accept

JetAway's most convenient or "preferred" or "logical" parcel on the airport for JetAway's

purposes. Moreover, the County has not leased all land, as recognized by the Director in

the 2006 JetAway DD and the parties in various pleadings in this proceeding.

Suitability of identified Airport FBO parcels

The Director notes that JetAway did not raise the issue of the 'suitability' of the 9-acre

Site or any other alternative parcel at the Airport in its Complaint. However, the County

may have first raised its willingness to offer the specific 9-acre Site for FBO development

in its Answer. [FAA Exhibit 1, Item 3, p. 2] Therefore, in order to assisthe parties in

understanding the role of compliance, the Director will address the extensive argument

between the parties over the suitability of the 9-acre Site as opposed to JetAway's

preferred FBO location, adjacento the through-the-fence access point and JetAway's

existing off-airport parcel and hangar.

20 With regard to the so-called FBO Locations 1 & 2 that comprise JCP's leasehold on the west side of the

Airport and cited by JetA way, the County denies specifically that it "designated areas as FBO Location 1

and FBO Location 2. These are designations created by JetAway." [FAA Exhibit 1, Item 3, p. 21] The

FAA adds that a draft Master Planning document (Working Paper Three) dated March 2005 and submitted

by JetAway in its Complaint depicts both JetAway-designated FBO Locations 1 & 2 as a "Potential ~ for

FBO Facilities (Hangar, Auto Parking, Aircraft Parking, Office, ETC.)," not 'Sites.' Working Paper Three

was drafted prior to JetAway's 2006 Complaint. It contemplates that the south end of the west side of

runway 13/31 could be one FBO. Currently that is the case. JCP's leasehold is relatively cohesive in the

SW quadrant of the Airport. [FAA Exhibit 1, Item 1, exh. 12, p. D.13]

Page 27 of 50
FAA Docket No. 16-08-01 Director's Determination

In its Reply, JetA way initially makes an admission about a potential FBO site, which can

be described as against its interest, stating:

The County has in fact leased all Airport land identified in the Airport Master Plan

and Airport Layout Plan for FBO locations to JCP. The County does not deny that

fact. The County merely argues that the Master Plan and Airport Layout Plan are

not relevant and that it has now identified a new FBO site on the south end of the

Airport east of Runway 13/31 (the 9-acre Site). This site is, however, marginally

suitable But the for County an FBO cannot at best seriously deny that it has leased all Airport land to JCP that

is suitable for an FBO. [FAA Exhibit 1, Item 5, p. 21]

JetAway questions the 'credentials and integrity' of one of the County's airport

consultants with regard to the County's assertion that the 9-acre Site is a suitable site for

an FBO. [FAA Exhibit 1, Item 5, pp. 21-23] In reply, JetAway hires its own consultant,

Stantec Consulting, Inc. to compare the 9-acre Site to JetAway's preferred FBO location.

[FAA Exhibit 1, Item 5, p.23]

JetAway characterizes its own consultant's findings in its Reply, stating:

Stantec concludes that the 9-acre site is marginally suitable for an FRO, and

the proposed JetAway site is clearly the preferred location The 9-acre site

is truly marginal for FRO operations and would create serious safety issues at

the Airport "" The County has indeed leased all of the Airport land that is

suitable for an FRO to JCP in violation of its Federal Grant Assurances. [FAA

Exhibit 1, Item 5, pp. 23-24]

In fact the Stantec Report states:

The 9-Acre and JetAway FBO Sites have been reviewed for physical capacity,

operational and safety-related concerns. Both sites can meet the minimum

standards of the airport for an FBO ...Based on the overall factors, including safety

and operations, the JetAway FBO Site is the preferred location for the following

reasons:

From an airside access standpoint, the JetAway site is centrally located off the

main runway for Montrose Regional Airport with very short taxi distances. The 9-

Acre site is currently very poorly located for safe access from Runway 17/35 and for

Runway 31 arrivals. Safe access to the airfield is a significant issue for an FBO

operation. The JetAway site is far superior in overall airs ide access.

Landside access to the JetAway site is already established and is operational. The

9-Acre site will require a considerable amount of investment to construct the

roadway and utility systems to the site, along with clean-up of the entrance for

business purposes. [FAA Exhibit 1, Item 5, exh. 68, p. 10)

Page 28 of 50
FAA Docket No. 16-08-01 Director's Detennination

In its Rebuttal, the County comments on the Stantec report, stating:

The County notes the comments of the Stantec Report on the potential operational

issues for the 9.612 acres. There is, however, a protocol for operating on afield

with no control tower. Every commercial airliner using Runway 17/35 crosses

Runway 13/31. If JetAway fueled the commercial airlines, its fuel truch would have

to cross Runway 13/31. If aircraft crossing Runway 13/31 was a significant safety

issue, the FAA would require the Airport to close the runway or build a taxiway

around the runway.

The Stantec report states that the location designated by JetAway is the preferable

FRO location. The County, however, has no intention of relocating Taxiway E2l,.

the preliminary estimate of the expense is $1,555,000.00... or to otherwise impair

the ability to extend Taxiway E to the north, merely to accommodate JetAway's

through-the-fence FRO operations. Any accommodation of JetAway's through-thefence FRO operations would create even more grant assurance issues ...[FAA

Exhibit 1, Item 6, pp. 17-18]

Also, Stantec states its preference for the JetAway FHO Site with regard to the 9-acre Site,

because the 9-acre Site is not immediately available to accommodate larger aircraft.

However, on the same page of the follow-up letter, Stantec characterizes the current

JetAway site geometry, stating:

[the] distance from the centerline of Taxiway E to the property line or the existing

buildingface [of JetAway's existing hangar is] approximately 83 feet, or 46.5 feet

short of the required distance for an Airport Design Group IV taxiway OF A (larger

aircraft). Taxiway E is designated on the signed ALP as a Group IV taxiway.

Remedies are to move Taxiway E to preserve Group IV designation, process a

modification to standardfor a modified Group III designation (smaller aircraft), or

reclassify the taxiway as a Group II taxiway (even smaller). [FAA Exhibit I, Item 5,

exh. 73~ p. 2)

Stantec offers a downgrade to a Group II taxiway as an option for the JetAway site for the

future, and observes that the 9-acre Site is planned to have Group II standards, as well.

[FAA Exhibit 1, Item 5, exh. 73. p. 2] In the case of the 9-acre Site, the Director observes

that plans can change and new infrastructure can be built to meet actual needs of the user's

aircraft. Also, in the case of the JetAway site, infrastructure can be removed and replaced

and enhanced, or downgraded. These are all judgments that an airport sponsor should

make to pursue the public's aeronautical interests in its airport and to prudently manage

the sponsor's resources and manage risk.

21 Taxiway E is the taxiway immediately adjacento JetAway's existing off-airport hangar. Taxiway E

provides airport access to all through-the-fence users of the Airport.

Page 29 of 50
FAA Docket No. 16-08-01 Director's Determination

The County answers by stating:

The County, however, does not have an obligation to grant JetAway an FBO

operation at the location dictated by JetAway, on the terms dictated by JetAway and

without an RFP process. JetAway does not have the right to substitute its site

selection judgment for that of the County. The County's obligation is to ensure that

JetAway has access to the Airport to conduct commercial aeronautical activities.

The County has satisfied this obligation by designating the 9.612 acre site as a

second FBO location. [F AA Exhibit 1, Item 6, p. 4]

The Part 16 process is not the appropriate venue to redraft or update an ALP. Furthermore,

the Complainant, JetAway carries the burden of proof of a grant assurance violation. To

succeed in its allegation that the County has granted an express exclusive right, JetAway

must show that there is no other available and suitable site for an FBO at the Airport.

Before the County's explicit offering of the 9-acre Site in its Answer, JetAway had stated:

Land is and has been available on the Airport for a second FBO, as the Director

noted in his Determination, and the most logical parcel of land for the FBO... is

the South Tract [on-airport parcel adjacento the through-the-fence access point]

which is adjacent to [JetAway's off-airport parcel and hangar]. [FAA Exhibit 1,

Item 1, p. 43]

With regard to the potential operations of the FBO sites, JetAway questions the safety of

the typical route of aircraft from the most active runway to the 9-acre Site, requiring

runway crossings. However, here the FAA is unconvinced that the 9-acre Site's location

on the airfield is so 'unsafe' as to make the site unsuitable. And in fact, Stantec only

makes that statement conditionally and in comparison to the JetA way Site. In a follow-up

letter to JetAway, Stantec states, "The 9-acre Site is unsuitable for FBO purposes if the

following is considered: The development and operation of the 9-acre Site versus the

JetA way FBO Site potentially introduces significant safety and operational issues." [FAA

Exhibit 1, Item 5, exh. 73, p. 2] The County equates this taxi route, objected to by

JetAway, to the need for JetAway's ground vehicles to cross the same runway to get to the

Airport's terminal area, associated with JetAway's preferred site. This also raises the

issue of vehicle incursions. The County observes that regular movement of ground

vehicles across a runway also potentially introduces significant safety and operational

issues. [FAA Exhibit 1, Item 6, pp. 17-18] The FAA is very concerned about the

prevalence of vehicle and pedestrian incursions on the airfield.

The County sites Roadhouse Aviation v Tul~ FAA Docket No. 16-05-08 (June 26, 2007)

(Final Decision and Order) <Roadhouse), quoting:

The exclusive rights prohibition does not guarantee an airport user the right to

acquire a specific piece of private property, or access to a specific location on the

airport. It does ensure that airport users have the right to access the airport to

conduct commercial aeronautical activities. [Roadhouse, FAD, p. 23]

Page 30 of 50
FAA Docket No. 16-08-01 Director's Determination

The FAA notes that the rmal FAA-approved ALP, prepared by Barnard DunkIeberg & Co.

(the County's existing airport planner/consultant) depicts the 9-acre Site as available for

an FBO location. [FAA Exhibit 1, Item 9, exh. VV]

JetAway's argument regarding the County's leasing of all land 'identified' or 'suitable' for

an FBO location is inconsistent, unconvincing, and fails to prove that the County's Federal

obligation requires it to accept JetAway's preferred location as an FBO site.

Express Exclusive Rights Counts 2-5

JetAway cites circumstances of the Airport and actions of the County to show alleged

intent to grant an exclusive right in support of its allegation:

Count 2. The County has leased more Airport land to JCP than required for it FRO.

Count 3. The County has leased Airport land to JCP without any immediate need for the

land being demonstrated and documented by JCP, and that JCP will not be able to put

into productive use within a reasonable period of time.

Count 4. The County executed a lease agreement with JCP that contains an option and

right of first refusal.

Count 5. The County has manipulated the Minimum Standards to protect JCP's

exclusive rights and interests.

JetAway presents these additional arguments as circumstantial evidence in support of its

central allegation that the County has leased all parcels 'identified' for FHO-use to JCP.

JetAway cites FAA Order 5190.6A incorrectly, herein. FAA Order 5190.6A is internal

FAA guidance. [See Applicable Law and Policy Section, above J It instructs FAA

employees as to the ways in which an airport sponsor might intentionally or

unintentionally grant an exclusive right. It does not create separate prohibitions. In any

case, this circumstantial evidence is belied by the County's offer of the 9-acre Site for

FHO use, as discussed above. The FAA does not accepthe premise that the County has

forfeited its ability to accommodate asecond FHO at the Airport.

Counts 2 & 3

With regard to counts 2 and 3, the Director notes that these are not independent allegations

of a granting of an exclusive right. JetAway states:

The County has leased more Airport land to JCP than requiredfor its FRO The

County has leased Airport land to JCP without any immediate needfor the land

being demonstrated and documented by JCP, and that JCP will not be able to put

into productive use within a reasonable period of time. [FAA Exhibit 1, Item 1, pp.

24 & 26]

Page 31 of 50
FAA Docket No. 16-08-01 Director's Detennination

The County generally denies all of the allegations, stating:

JetAway provides no evidence that JCP leases more land than it requires. That is

really a subjective determination by JCP The County'sperception is that JCP

needs the land it is leasing. Second JetAway requested 513,513 in its [2005 FBO

Proposal]. In its identical December 2005 and November 2007 proposals [FBO

proposal and settlement proposal], it requested 459,903 square feet for the onAirport site. [FAA Exhibit 1, Item 3, p. 28]

Also~ the County cites FAA Part 16 precedent. In Bisti Aviation v Fannington~ FAA Docket

No. 16-07-10 (December 4,2007) (Director's Determination) ~), the Director stated:

Respondent correctly identifies that it is not required under the Federal grant

obligations to independently assess whether a tenant's proposal for future leased

property is factual or immediately needed by the proponent to provide aeronautical

services. No grant assurance specifically requires that a demonstrated immediate need

be proven before an airport approves an assignment of a lease. mim, DD, p. 18]

As stated, JetAway's extensive arguments regarding the size, layout, improvements,

financing and process of JCP's leasehold are not sufficient to establish the grant of an

exclusive right when the County does have the capacity to accommodate a second FHO on

the Airport and has offered the 9-acre Site. Even if the FAA accepts the facts regarding

JCP's use of its leasehold, the County was not grant-obligated to require JCP to

demonstrate an immediate need for the property it was leased for its FHO operations.

While JetAway elevates language in Order 5190.6A to a level comparable to the County's

grant assurance obligations; this is not accurate. Nonetheless, JetAway has made no

showing that the County leased more Airport land to JCP than required for its FHO.

JetAway has also failed to show that the County has leased Airport land to JCP without

any immediate need for the land being demonstrated and documented by JCP, and that

JCP will not be able to put into productive use within a reasonable period of time.

Count 4

With regard to count 4, this right of first refusal is not for additional property that could be

used for a competitive FBO, but rather an option for extension of a leasehold for currently

occupied property. It does not remove property otherwise currently available for a second

FBO. [FAA Exhibit 1, Item 1, exh. 19]

Based upon the Director's analysis in Issue 1, JetA way's allegation that granting an option

and right of first refusal to JCP is a prohibited exclusive right is wrong. Even if the FAA

accepts the facts regarding JCP's right of first refusal, the FAA cannot conclude that the

County has granted an exclusive right. The right of first refusal at issue here is related to

future occupancy of a current leasehold and not related to the leasing of all suitable parcels

on the airport.

Page 32 of 50
FAA Docket No. 16-08-01 Director's Determination

Count 5

JetAway states, "The County has manipulated the Minimum Standards to protect JCP's

exclusive rights and interests." [FAA Exhibit 1, Item 1, p. 27]

Again, count 5 does not stand on its own as a grant assurance violation, because as JetA way

admits "land is and has been available on the Airport for a second FHO, as the Director

noted in his Determination..." [FAA Exhibit 1, Item 1, p. 43] JetAway goes on to opine

that, "the most logical parcel of land for the FHO ~ now that the County has leased all

available land on the west side of Runway 13/31 to JCP, including both FHO Locations

One and TW022 -is the [on~airport parcel adjacent to the through-the-fence access point]

which is adjacent to [JetAway's off-airport parcel]." [FAA Exhibit 1, Item 1, p. 43]

The Respondent goes on to state that, "...the area designated by JetAway as FBO Location

1 does not satisfy even the minimum land area under the old Minimum Standards (125,000

sq. ft). " [FAA Exhibit 1, Item 3, page 21] JetAway's 2005 FBO proposals and its

November 2007 settlement offer upon which it is basing this Complaint request no less the

450~000 sq. ft. of on-Airport leasehold. [FAA Exhibit 1, Item 5~ p. 30] JCP's successful

2005 FBO proposal requested 300,000 sq. ft. [FAA Exhibit 1, Item 1, exh. 14, p. 10]

The record shows that both FBO proposers requested no less than 300,000 sq. ft. of onAirport leasehold and up to over 500,000 sq. ft. So, it is reasonable for the County to raise

its minimwn square footage requirement to a mid.point of 350,000 sq. ft. This is what the

County did when it adopted its 2005 Minimwn Standards. [FAA Exhibit 1, Item 1, exh.

21] Furthermore, the property on the west side of the south end of runway 13/31 (now

occupied by JCP) does not appear to be large enough to accommodate two FBOs of the

smallest size requested. JetAway submits evidence in its Complaint that shows the

leaseholds in that quadranto add up to only 436,280 sq. ft. [FAA Exhibit 1, Item 1, exh.

29] It appears prudent that the County, at the time, negotiated with JCP to occupy a

reasonably compact and contiguous FBO facility, smaller than anyon-airport leasehold

that JetAway has ever requested from the County. JetAway's inference, in hindsight, that

the southwest quadrant could have been expanded to shoe-horn in two FBOs of 350,000

sq. ft. each is unsupported and rejected. [FAA Exhibit 1, Item 5, exh. 73 & Item 7]

22 With regard to the so-called FBO Locations 1 & 2 that comprise JCP's leasehold on the west side of the

Airport and cited by JetAway, the County denies specifically that it "designated areas as FHO Location 1

and FHO Location 2. These are designations created by JetAway." [FAA Exhibit 1, Item 3, p. 21] The

FAA adds that a draft Master Planning document (Working Paper Three) dated March 2005 and submitted

by JetA way in its Complaint depicts both JetA way-designated FHO Locations 1 & 2 as a "Potential §!!£ for

FHO Facilities (Hangar, Auto Parking, Aircraft Parking, Office, ETC.)," not 'Sites.' Working Paper Three

was drafted prior to JetAway's 2006 Complaint. It contemplates that the south end of the west side of

runway 13/31 could be one FHO. Currently that is the case. JCP's leasehold is relatively cohesive in the

SW quadrant of the Airport. [FAA Exhibit 1, Item 1, exh. 12, p. D.13] In any case, it is JetAway, not the

County or the FAA, that applies such importance to the details of draft planning documents. The FAA

does not see such importance or relevance.

Page 33 of 50
FAA Docket No. 16-08-01 Director's Determination

Even if the Director assumes the facts presented by JetAway under count 5, they do not add

up to a grant assurance violation. Rather, the facts show that the County was being

responsive to the stated square footage needs of responders under their RFP. At worst, it

might reveal an interest to prevent a competing leaseholder from blocking the on-airport

FBO's potential contiguous growth in the southwest quadrant of the Airport. In Self Serve

PumDS v Chic~o Executive Aimor!, FAA Docket No. 16-07-02 (Director's Determination

Issued March 17, 2008), the Director stated, "motive alone is insufficient for a finding of an

exclusive right or grant assurance violation." [Self-Serve Pumps, DD, p. 31]

As previously stated, the fact that the County is not providing a parcel to JetAway, which

in JetAway's opinion, is the most convenient, logical or preferred does not necessarily

mean that the County is manipulating the Minimum Standards to protect JCP.

Other Exclusive Rights Arguments 8 & 9

JetAway makes observations to support its circumstantial case againsthe County by citing

language in Federal law and policy including a specific exception provided by the law.

Count 8. The only exception that would allow JCP to provide exclusive FRO services at

the Airport does not apply in these circumstances. [FAA Exhibit 1, Item 1, p. 47]

Count 9. The County's grant of exclusive rights to JCP has enabled JCP to charge inflated

prices to the detriment of the public and the County. [FAA Exhibit 1, Item 1, p. 48]

Regarding count 8, as cited by JetAway, Federal law has always provided an exception to

the prohibition of the granting of an exclusive right. The law states:

A person providing, or intending to provide, aeronautical service to the public will

not be given an exclusive right to use the airport, with a right given to only one

fiXed-base operator to provide services at an airport deemed not to be an exclusive

right if-

(A) the right would be unreasonably costly, burdensome, or impractical for more

than one fiXed-base operator to provide the services,. and

(B) allowing more than one fiXed-base operator to provide the services would

require reducing the space leased under an existing agreement between the one

fiXed-base operator and the airport owner or operator. [49 U.S.C 47107(a)(4)]

The County concedes the point to JetAway, stating, "there is no exception that allows [the

County] to deny a second FBO... Further, the County has not and will not deny a second

FBO operation on that basis." [FAA Exhibit 1, Item 3, pp. 39-40] Accordingly, as to count

8, there is no grant assurance violation as the County has committed to permit a competing

FBO to locate on the Airport and specifically on the 9 acre parcel.

Regarding count 9, JetAway states, "One of the many results of the County's ...[alleged]

refusal to allow JetAway to compete with JCP at the Airport is that JCP is able to charge

inflated fuel prices." [FAA Exhibit 1, Item 1, p. 49] JetAway provides no evidence in its

Complaint of high fuel prices at the Airport. The County answers that it "monitors the

fuel prices at the regional airports and has not found any facts or evidence to support

Page 34 of 50
FAA Docket No. 16-08-01 Director's Detennination

JetAway's claim that JCP's fuel prices are higher than all regional airports." [FAA Exhibit

1, Item 3, p. 40] JetAway supplies evidence in its Reply, presenting an Airnav.com

internet page showing that jet fuel prices at the Airport in the May-July 2008 timeframe

are more expensive than most airports within the 65 miles, but less expensive than, or

competitive with, prices at Telluride Regional Airport, Grand Junction Regional Airport

and Garfield County Regional Airport. [FAA Exhibit 1, Item 5, exh. 71]

JetAway's evidence of high fuel prices at the Airport does not convince the Director that

the County has granted an exclusive right. The evidence is not conclusive with regard to a

fmding of the granting of an exclusive right. Considering that the evidence shows that

Grand Junction's prices are higher and that many of the airports with seemingly lower fuel

prices list only one fuel provider at the airport in question undermines the relevancy of the

evidence. Also, the F M has noted the existence of relatively high fuel prices at airports

with more than one fuel retailer, and has recognized that an airport sponsor has many

options to monitor and address high fuel prices!3 However, comparatively higher fuel

prices may signal to a sponsor that it should pursue competition.

Issue 3 Conclusion

For the reasons discussed herein, the Director finds that the County has not granted an

exclusive right by means of its FBO leases, or in the manner by which it has identified

FBO locations on the Airport, or by the suitability of those locations. The County is under

no obligation to accept JetAway's opinion of the most convenient or "preferred" or

"logical" parcel on the Airport for JetAway's business interests. The County has offered a

specific 9-acre Site expressly for FBO development. As stated by the County, the County

retains the proprietary right and responsibility to plan for the future of the Airport. The

County's proprietary rights do include the protection of the County from legal liability,

litigation costs, and the loss of rights and powers by means of a problematic through-thefence agreement. Finally, as stated, JetAway's off-airport busmess interests are not

protected by the County's Federal obligations. JetAway is equivalento any proponent of

a second FBO at the Airport and is subjecto the reasonable planning judgments of the

County as to where such FBO may be located.

Considering the above, the Director finds that the County is not in violation of grant

assurance 23, Exclusive Rights, by means of the distribution of Airport parcels suitable for

FBO activities.

23 S~lf Serve PumQs states, "High fuel prices or high profit margin are not sufficient to make a finding that

an airport sponsor is non-compliant. The Airport may, justly, choose to take any of several actions to

address fuel prices. ...The Complainant's argument that market conditions... require [the sponsor] to

accede to the Complainant's specific business plan... is unconvincing." [Self Serve PumQs, DD, p. 30]

Page 35 of 50
FAA Docket No. 16-08-01 Director's Deternlination

Issue 4

Whether the County's actions with regard to JetAway's proposal for a FRO business

at the Airport constitute the constructive granting of an exclusive right by means of

an unreasonable denial in violation of grant assurance 23, Exclusive Rights, 49

V.S.C. § 40103(e) and 49 V.S.C. § 47107(a)(4).

Count 6. The County has imposed unreasonable requirements on JetAway as a condition

to any consideration of JetAway's FBO proposals. [FAA Exhibit 1, Item 1, page 30]

Count 7. The County has imposed unreasonable and discriminatory requirements for an

FBO agreement with JetAway. [FAA Exhibit 1, Item 1, page 39]

Airport sponsors are prohibited by grant assurance 22 from imposing unreasonable

restrictions and from unjust economic discrimination against aeronautical service

providers proposing to operate aeronautical businesses. In the past, the FAA has found

that unreasonable restrictions, delay or unjust discrimination could constructively grant a

prohibited exclusive right. Generally, however, the Director considers these allegations

under grant assurance 22 as a test for unreasonable terms, as a prerequisite for the finding

of a constructive grant of an exclusive right!4 Also, as discussed above, these are

positions considered by the parties in confidential mediation (some of which JetAway

admits had been resolved). As the Director noted above, the confidentiality of the

mediation has been breached and the documents, including the proposed settlement

agreements are now in the public domain. Nonetheless, the Director will not opine on the

parties' conduct, positions, or alleged FBO restrictions because these negotiations were not

part of this Part 16 proceeding, but rather involved an ongoing exchange of proposals and

counter-proposals in mediation. JetAway admits and acknowledges this. The analysis

and discussion, however, under Issue 4 herein, will attempt to provide clarity in regard to

the County's obligations under grant assurances 22 and 23.

JetAway states, "the County has never really considered the actual FBO agreements

proposed by JetAway, and has insisted on unreasonable conditions and concessions from

JetAway, One Creative Place and their individual owners." [FAA Exhibit 1, Item 1, p. 30]

The County states that it does have reasons for declining to pursue JetAway's preferred

location of its FBO, stating that the County:

woots any JetAway FBO operation [to be] on the Airport and it wants the throughthe-fence issues of the Off-Airport Agreement created by JetAway, resolved and

addressed. The County submits it is acting consistently with the Director's

Determination in Docket No. 16-06-01. Based on feasibility studies conducted by

the County's expert and the unjustly discriminatory effect of the Off-Airport

Agreement for the on-airport commercial aeronautical activities, the County has

identified a second FBO location. It is clear from the Director's Determination that

an on-airport, non-adjacent site is acceptable. [FAA Exhibit 1, Item 3, pp. 37-38]

24 See Self Serve Pumns. FAA Docket No. 16-07-02 p. 28.

Page 36 of 50
FAA Docket No. 16-08-01 Director's Determination

As discussed above, the Director finds that the operational and feasibility issues, cited by

the County, do not obligate the County to consider JetA way's preferred FBO location to

the exclusion of the County's preferred FBO location. But, in addition to the County's

legal and FAA compliance concerns, mentioned above, the County also cited financial

concerns, stating:

The County sought to accommodate JetAway's request by resolving the through-thefence issues and without exposure for the County's residents and the expense of

further litigation. The County was unable to do so. By identifjling and making

available the 9. 612-acre site, the County is confirming its position from the onset:

There is no exclusive right. [FAA Exhibit 1, Item 3, pp. 4-5]

The County's proprietary rights allow it to provide a competitive FBO opportunity in a

manner that protects the County from legal liability and cost, and that protects its ability to

continue as a going concem.25 As stated, the County's grant assurances do not require it

to accommodate JetAway's preferred location on the Airport. The County has reason to

prefer a location that is not adjacento the through-the-fence access point, like JCP's FBO

location. JetA way has demonstrated arecord of transgression with regard to fueling,

trespassing,26 adhering to the Minimum Standards, and advertising services it is prohibited

from offering. After the Respondent took action to protect its proprietary rights and seek a

legal injunction against JetAway, JetAway ignored the Court's temporary restraining

Order and was found to be in contempt. [See Montrose Court Order, FAA Exhibit 1, Item

5, exh. 60]

Whether or not JetAway's off-Airport interests are protected by contract, they are not

protected by the County's grant assurances. But the County's grant assurances do protect

its on-Airport tenants. Admittedly, this affects the County's decision-making with regard

to potential airport tenant proposals and JetAway's proposal to be adjacento its throughthe-fence operation and off-Airport customers. Other than the County's original consent

to the Off-Airport Agreement, this situation is not of the County's making. Entities

wishing to conduct commercial aeronautical activities are wise to make arrangements to

lease airport property, reasonably offered by an airport sponsor, and should not seek

special access to off-airport operations or customers, since those operations or customers

are not protected by the sponsor's grant assurances. The evidence in the record shows that

25 IIi Self Serve Pumos v Chicago Executive Aimort, FAA Docket No. 16-07-02 (Director's Determination

Issued March 17, 2008), the Director stated, "In the end; the evidence presented by the Complainant is

insujjicient to eclipse the Airport's proprietary discretion to make management decisions in the best

aeronautical interests of the public, balanced with the best business interests of the Airport as a going

concern. " rssPumQs, DD, p.25]

26In late February/early March of2006, JetAway began excavation on Airport property without the

County's permission. At the County's direction, JetAway ceased construction and filled the area that had

been excavated. However, JetAway then filed a third lawsuit, seeking an injunction againsthe County in

order to continue construction on the East Ramp Area of the Airport's property. In November of2006, the

District Court of Montrose County denied JetAway's request, concluding that JetAway "did not have a

probability of success on the merits." [FAA Exhibit 1, Item 5, exhibit 60, p. 23] In a decision dated June

30,2008, the District Court of Montrose County found that JetAway trespassed on County property when it

directed workers to begin construction without the County's permission. [FAA Exhibit 1, Item 5, exhibit

60, p. 32]

Page 37 of 50
FAA Docket No. 16-08-01 Director's Determination

One Creative Place and JetA way have common ownership. The evidence in the record

also shows that One Creative Place LLC and KMTJ Fuel LLC, are located at the same

location, One Creative Place, Montrose, Colorado. Accordingly, the County may consider

JetAway, One Creative Place and KMTJ Fuel as one entity.27

JetAway presents 11 sub-counts, alleging that the County has insisted on unreasonable

tenDs or conditions upon JetAway's preferred FBO location, its future construction and

operation that is adjacento its off-airport location, and the through-the-fence access point.

[FAA Exhibit 1, Item 1, pp. 30-47}

JetAway's Off-Airport Interests and Entities are not Protected by the Grant Assurances

In sub-counts 6a and 6d, JetA way argues that the County is unreasonably sanctioning its

off-Airport interests, stating:

The County has adamantly refused to consider any proposal for JetAway to provide

FRO services on the Airport unless One Creative Place would agree to

unreasonable restrictions on the use of its private property off the Airport, and

relinquish some of its rights as a [off-Airport] Part Owner under the Off-Airport

Agreement. [FAA Exhibit 1, Item 1, p. 30]

The County has insisted on a cross-breach provision... whereby a breach of the

Off-Airport Agreement by One Creative Place, or any of its affiliated entities or

lessees, would constitute a breach of JetAway's FRO Agreement. [FAA Exhibit 1,

Item 1, pp. 35-36]

It is again important to note that as a general principal, the FAA does not support agreements

that grant access to the public landing area by aircraft stored and serviced off-site on

adjacent property. Through-the- fence arrangements are disfavored by the FAA and can

place an encumbrance upon the airport property. Thus reducing the airport's ability to meet

its Federal obligations. Accordingly, under its grant assurances, the County is free to act to

limit, mitigate, or eliminate the effects of the Off-Airport Agreement. [See 2006 JetAway

DD] One way to mitigate the effects of the Off-Airport Agreement is to limit off-Airport

commercial activity, such as the leasing of aircraft hangar storage. As stated herein, FAA

precedent allows the County to view One Creative Place and JetAway as the same entity. It

appears that the County is acting within its proprietary rights, within its Federal obligations

and is taking action necessary under grant assurance 5, Preserving Rights and Powers.

27 In Jack H. Cox v. the CitY of Dallas. FAA Docket No. 16-97-02, (October 24, 1997) (Record of

Determination) the FAA found that "The City of Dallas, by amending its lease with Redbird Development

Corp. (RDC) to prohibit Jack H. Cox or any entity in which he has an interest from leasing, subleasing or

participating in the use of the RDC-Ieased premises, is not violating its federal obligations" with regard to

grant assurance 22, Economic Nondiscrimination. [See Record of Determination, 16-97-02, page 17] Also,

in SeaSands Air TransRort. Inc. v. Huntsville-Madison Countv A!mQrt Authoritv, FAA Docket No. 16-05-

17 (August 28, 2006) (Director's Determination), the FAA found that the actions and behavior of a

universal agent, such as the president of a company, are attributable to the business entity over which the

universal agent has control." [See Director's Determination, 16-05-17, pages 21, 23]

Page 38 of 50
FAA Docket No. 16-08-01 Director's Determination

The County May Protect Itself against Legal Liability

& the County Does Not Have to Accept Donated Land

.

Under sub-counts 6b, 7b(2) and 7c, JetAway raises instances in which the County

is reluctant to expose itself to legal jeopardy from JCP. JetA way alleges that it is

unreasonable for the County to pay heed to potential legal jeopardy that may

pertain to the County if the County were to take actions againsthe interests of its

on-Airport FBO, JCP and that are preferred by JetAway, including acceptance of

JetAway's off-Airport parcels.

Sub-count 6b involves the County seeking indemnification from JetA way with regard to

claims by JCP. JetAway states:

JCP has ...among other things, continually threatened the County with escalating

civil litigation. JCP sued the County in the Montrose County District Court in

March 2006 for breach of the JCP FRO Agreement, and that claim is still pending,

butJCP continued to threaten additional claims throughout 2006 and 2007. [FAA

Exhibit 1, Item 1, p. 32]

JetAway appears to admit some degree of legal liability above, even if JetAway presumes

it to be small. The County cites its current indemnification with JetAway with regard to

the existing Off-Airport Agreement. [FAA Exhibit 1, Item 1, exh. 2, p. 6] JetAway states

that this indemnification that the County is requesting is not required of JCP. Clearly, the

circumstances are different. The record indicates that the County has considered

numerous options to accommodate JetAway, including leasing land adjacento the

through-the-fence access point used by JetAway and its tenants and/or accepting donated

land with various leaseholds and encumbrances. [FAA Exhibit 1, Item 1, exhs. 5 & 6]

These situations are not similar to the landlord/tenant relationship set out in the JCP Lease.

Furthermore, JetAway's rights under the Off.Airport Agreement are not protected by the

County's grant assurances, but JCP's use of the Airport is protected.

Also associated with the speculative possibility of donating land, discussed in mediation,

is the issue of the Off-Airport Agreement's restrictive covenant running with the land,

discussed under sub-count 7b(2). The restrictive covenant in question allows specific

activities and could limit activities of through-the- fence operators. [FAA Exhibit 1, Item 1,

exh. 2, p. 9] JetAway quotes the County's allegedly unreasonable negotiating position

from its last proposed settlement agreement:

In no event, however, can JetAway or any of its affiliated or related entities or

persons commence any FBO operations... until there has been a final judicial

resolution of whether restrictive covenants prohibit FBO use of property donated to

the Airport because such property was formerly included in the aerospace park and

subject to such restrictive covenants. [FAA Exhibit I, Item I, p. 42]

It appears that the County was reluctant to accept a legal liability from accepting donated

land from JetAway that contains a disputed restrictive covenant running with the land that

Page 39 of 50
FAA Docket No. 16-08-01 Director's Determination

would be owned by the County!8 In fact, the Montrose Court Order. discussed above, has

determined that the restrictive provision actually prevents the vending of aviation fuel

from those properties. This would appear to be a unique 'double-edged' problem for

JetAway. But it is rightfully JetAway's liability to bear, even if small. JetAway states that

JCP has threatened to sue the County over breaking the restrictive covenant by allowing

its newly 'owned' land to be used for purposes actually prohibited by the restrictive

covenant running with the land and contained in the Off-Airport Agreement.

As stated above, this idea of donating land is too speculative for the Director to include in

a finding of this Part 16 proceeding as it was part of negotiations in mediation and not part

of this proceeding. However, the County is permitted to protect the Airport account from

financial loss due to legal jeopardy. Such a provision protects the public interest in civil

aviation by protecting the Airport's users from having to finance judgments against the

County. Indemnification and other protections associated with the acquisition of offAirport property interests that contain restrictions, including personal guarantees, appear

to be acceptable and justifiable.

With regard to sub-count 7c and the various 'land donation' proposals, the County states,

"the County would agree that a donation or exchange of land is not feasible in view of

VOR, OF A, geographic, environmental and restrictive covenants issues that pertain to

such proposal." [FAA Exhibit 1, Item 3, p. 37] The grant assurances do not require that

the County alter its property map to accept property as a donation, either as fee-simple or

as a long-term lease, in order to accommodate the interests of a party that wishes to

preserve its investment in its off-airport facilities. The FAA would be concerned that

accepting such a donation, swap, lease-leaseback or other unusual circumstance under the

legal circumstance described in this sub-section could impose some significant legal

and/or financial liability on the County. Failure to protect itself might be evidence that the

County has failed to preserve its rights and powers, as required by its grant assurance 5.

As stated, it appears that the County has determined that it is imprudent for it to proceed

with such a scenario, choosing, instead to reasonably say 'no' to this specific proposal and

to offer an alternative solution.

In some Sub-Counts the Parties have Reached Resolution

JetAway raises issues in sub-counts 6c, 6f and 7d in which the parties appear to have

reached resolution in a manner that accommodates JetAway's position or allows for the

accommodation at the time of implementation. The Director reminds the parties that the

test for compliance is what a sponsor actually does, not what a document may state.

Rarely are minimum standards, leases or plans so perfectly crafted as to be above criticism

during the life of their applicability. This extant case has illustrated this long-standing

principle?9 As stated, the Director will not make a detailed analysis of each particular

28 Proposals included a fee simple transfer as well as long term lease. For purposes of Grant Assurance 4,

Good Title, a long term lease satisfies the good title ownership requirement.

29 As stated in Self Serve Pumps. "the FAA does not judge an airport sponsor simply by the plain language

of agreements or minimum standards, since such documents are rarely so perfectly crafted as to avoid all

possibilities for inconsistency over time, changing circumstances and interpretations. Rather, the FAA

Page 40 of 50
FAA Docket No. 16-08-01 Director's Detennination

negotiating stance taken by parties in confidential mediation in hindsight, with imperfect

information. While the Director will not opine on these particular issues, he will attempt

to provide clarity in regard to the County's obligations under the grant assurances by

offering the following observations.

At sub-count 6c, JetAway raises the issue ofFBO management qualifications.

[FAA Exhibit 1, Item 1, page 38]

.

With respecto FBO management qualification requirements to be imposed upon

JetAway's proposed FBO, the parties submit identical sections in their respective

proposals of November 2007. Both draft settlement agreementstate, "JetAway will

obtain and maintain professional, experienced FBO management for its FBO, which

management will be subject to review and approval of the County, which review and

approval will not be unreasonably withheld." [FAA Exhibit 1, Item 1, exh. 5, par. 6 & exh.

6, par. 3] This is not a matter ripe for FAA review, since the County has not exercised any

review and has not rejected any FBO management for any reason. The provision appears

to be customary, typical and reasonable.

At sub-count 6f, JetAway re-raises the issue of the Airport UNICOM. [FAA

Exhibit 1, Item 1, page 38]

.

The Director addressed and dismissed this issue in the 2006 JetAway DD. We rely on that

finding here. [2006 JetAway DD, pp. 33-34] Again, we observe that JetAway is not

similarly situated to JCP. JetAway now has no leasehold presence on the Airport and has

not yet had the right to conduct commercial aeronautical activities upon the Airport (See

Montrose Court Order). Consequently, the County has no obligation to compel JCP to

direct airport users to JetAway's service offered pursuanto the Off-Airport Agreement.

Also, it appears that in the confidential mediation, the parties came to a concurrence in

November 2007 that appears to accommodate JetAway's concerns going forward, when

presumably JetA way could make itself a similarly-situated FBO in relation to the

UNICOM. Both draft settlement agreements state, "Pursuanto FAA Order 5190.6A, the

County will revoke the existing FBO's right to operate the UNICOM and determine the

level of manned service that the County will provide, if any." [FAA Exhibit 1, Item 1, exh.

5, par. 17 & exh. 6, par. 12] In its Reply, JetAway alleges that the County may attempt to

make JetAway pay for the cost of the UNICOM, without proving to JetAway that it's also

charging JCP, equally. This is a speculative claim. The FAA observes that the County

should distribute costs to its FBOs through a comprehensive and reasonable rate structure

and cost-allocation.

At sub-count 7d, JetAway raises the issue of the County's apparent square footage

requirement. [FAA Exhibit 1, Item 1, page 45]

.

JetAway states that the County is requiring JetAway to construct crew and passenger

lounge facilities totaling at least 4,000 square feet. It states that this is 1,500 square feet

judges compliance by an airport sponsor's actions or inactions with respect to those agreements or

minimum standards." [Self Serve PumDS. DD, pp. 31-32]

Page 41 of 50
FAA Docket No. 16-08-01 Director's Determination

larger than required by the 2005 Minimwn Standards, but equivalento the size facility

required in JCP's lease. [FAA Exhibit 1, Item 1, p. 46] In fact, it does appear that the

County did include the 4,000 square feet requirement in its November 2007 draft

settlement agreement. [FAA Exhibit 1, Item 1, exh. 5, par. 12] Again, the FAA

understands that positions taken in negotiations are often fleeting. That appears to be the

case here. In its Answer the County concedes the point, stating, "A second FBO will only

have to build improvements of a size that is specified in the Minimwn Standards. It does

not have to match the size of JCP's facilities to the extent those facilities are in excess of

the Minimwn Standards." [FAA Exhibit 1, Item 3, p. 39. See also FAA Exhibit 1, Item 1,

exh. 21, Section Two III B.] In response to this statement by the County, JetA way replies,

"That is certainly an appropriate position for the County to take." [FAA Exhibit 1, Item 5,

p.39] Under the circwnstances, we agree with JetAway and the County.

In some Sub-Counts JetAway alleges County is !!Q! required to take specific actions

At sub-count 6e and 7a, JetAway alleges that the County is choosing to take actions that

its grant assurances do not require it to take. Such an allegation is not an allegation of the

violation of a grant assurance. It ignores an airport sponsor's proprietary rights that may

be more comprehensive than the FAA grant assurances.

At sub-count 6e, JetAway states that it is unnecessary for the County to issue a

Request-for-Proposal (RFP) to solicit interest in a second FBO opportunity.

[FAA Exhibit 1, Item 1, page 38]

.

JetAway states, "the County had acknowledged and agreed that an RFP for a second FBO

would be 'unnecessary and inappropriate,'" but after JCP threatened to sue the County, the

County raised the possibility of issuing an RFP for a second FBO. [FAA Exhibit 1, Item 1,

p. 38] The Director addressed this issue specifically in the 2006 JetAway DD. The

Director disagreed with JetAway's 2006 assertion that the RFP process for a second FBO

is unnecessary and delaying. The Director stated:

The grant assurances do not prohibit the County from entering into long-term leases

with commercial entities, by negotiation, solicitation, or other means. The County

may choose to select FBOs ...through an RFP process, and if it chooses to do so, it

can do it each time a new applicant is considered [FAA Exhibit 1, Item 3, exh. A,

p.28]

The Director noted in a footnote in the 2006 JetAway DD that RFP's are a common

industry practice that provide a widely circulated call for aeronautical interest in airport

facilities, and provide an appropriate method of ensuring the highest and best use for

limited airport property. [FAA Exhibit 1, Item 3, exh. A, p. 28}

Additionally, the Director has also recognized that an airport sponsor can limit a current

Airport FBO tenant from responding to a proposal for a new FBO opportunity in

furtherance of compliance with grant assurance 23 E.xc/usive Rights. In Comorate Jets v

Scottsdale, the Director upheld the airport sponsor's decision to exclude an incumbent

Page 42 of 50
FAA Docket No. 16-08-01 Director's Determination

FBO '~om responding to a request for proposal, based on the sponsor's desire to create

competition or add further competition at the airport and to provide more choice and

services for the public users." (Coroorate Jets v CitY of Scottsdale, FAA Docket No. 16-

01-12 (March 15,2002) (Director's Determination), p. 10)

The precedent in the 2006 JetAway DD and Corporate Jets applies in the extant case.

.

At sub-count 7a, JetA way objects to being subject to the same lease tenn as JCP.

[FAA Exhibit 1, Item 1, page 39]

JetAway states that the County appeared flexible on JetAway's proposed lease term of35

years, but changed its position after pressure from J CP. J etA way states, "... the County

ultimately insisted that the term provisions be identical to those in the JCP FBO

Agreement- an initial term of twenty years with a ten-year option." [FAA Exhibit 1, Item

1, p. 40] The County answers, "the County doesn't perceive that reqUiring all FBO's to

have the same term is either unreasonable or unjustly discriminatory." [FAA Exhibit 1,

Item 3, p. 36]

The FAA agrees with the County. The County's grant assurances may not require the

specific action contemplated by the County, but they do not ~rohibit it. The County has

the proprietary right to establish the terms of its FHO leases. 0

In some Sub-Counts the Parties Differ

.

At sub-count 7b(1) JetAway states that it's unreasonable and discriminatory to

require JetAway to meet the applicable minimum standards before commencing

FBO operations, when JCP was not formally required to demonstrate that it had

met the minimum standards before it began operations in 2006.

JetAway states, "... the County was indeed going to impose unreasonable discriminatory

requirements on JetAway that it had not imposed on JCP or others." [FAA Exhibit 1, Item

I, p. 41] The County answers, "There is nothing unreasonable or unjustly discriminatory

in requiring all FBO's to comply with the same Minimum Standards before FBO

operations commence." [FAA Exhibit 1, Item 3, p. 37]

JetAway has not provided evidence that JCP had not met the minimum standards before

beginning operations in 2006. However~ JetAway focuses its argument in its Reply~

stating "But the point is that the County did not require JCP to do anything to demonstrate

compliance with the Minimum Standards before commencing operations and yet insisted

that JetAway would have to do so." [FAA Exhibit 1, Item 5, p. 37]

30 The parties should note that in most cases, under a long-term lease, the airport owner transfers the cost of

the capital improvement and the risk associated with financing to the tenant. In return, the airport owner

gives up a degree of flexibility. Prospective tenants considering a substantial investment in the airport

generally seek a lease term sufficiently long to ensure that the tenant gets not only a return ofits

investment, but a return on its investment as well. [See Skvdance HelicoRters v. S~dona Oak-Creek Aimort

Authority, FAA Docket No. 16-02-02 (March 7,2003) (Director's Determination) p. 29.

Page 43 of 50
FAA Docket No. 16-08-01 Director's Determination

The standard of compliance does not require that airport sponsors enforce minimum

standards so rigidly as to require identical tone and posture toward all competitors that

have different records and history with the sponsor. [See Rick Aviation v Peninsula

Airport Commission- FAA Docket No. 16-05-18 (May 8, 2007) (Director's

Determination) p. 16]

JCP and JetAway are not similarly situated. Apart from the differences in location,

amenities, circumstances and time, JetAway has access to off-airport facilities that could

allow it to operate indefInitely without meeting the Minimum Standards on the Airport.

Clearly, this is different from JCP's situation. Further, in this circumstance, it is

reasonable for the County to require a second FHO to meet minimum standards before

beginning operations and it is reasonable for the County to require JetA way to

expeditiously construct its on-Airport facilities and not rely on off-Airport infrastructure.

At sub-count 7e, JetAway objects to the County's requirement that it pay the same

lease rates as JCP despite apparent differences in the quality of the leased properties.

[FAA Exhibit 1, Item 1, page 46]

JetAway states, "the County's insistence on identical FHO revenue provisions (rent) until

now has been unreasonable and discriminatory under the circumstances. ...The County

simply insisted that JetAway pay the same rate, or actually a higher rate, for unimproved

land on which it would have to construct a ramp at a cost to JetA way." [FAA Exhibit 1,

Item 5, pp. 40-41]

The County allows that rates for JetAway's leasehold may be set by market forces,

capturing any differential in improvements and location, stating, "If there is an RFP for

the identified second FHa and JetAway chooses to bid, it will have the opportunity to

address and support in its proposal why it should pay less than JCP ." [FAA Exhibit 1,

Item 3, p. 39] The Director notes that this mechanism can be used to set rates at either

the JetAway-adjacent parcel or the 9-acre Site.

JetAway states, "JetAway does not expect the Director to address any specific revenue

provision that would be appropriate, and recognizes that the revenue provisions will be

subject to negotiation.. .." [FAA Exhibit I, Item 5 p. 40] It is not the responsibility of the

Director to establish airport rates, nor does the Director negotiate rates between parties.

Specific rate negotiations involves numerous variables. It is acceptable to rely on marketmechanisms to help determine the value of a particular location at an airport. Also, it is

customary and reasonable for airport sponsors to have an 'unimproved' and 'improved'

rate schedule. Tenants financing improvements may pay a lower initial rental (ground

rent) than tenants leasing a facility from an airport sponsor. The former will have debt for

the new facility while the latter may not have such debt payments.

Page 44 of 50
FAA Docket No. 16-08-01 Director's Determination

Issue 4 Conclusion

As discussed above, the County has not acted unreasonably in regard to declining

JetAway's proposals. The County has good reason to attempt to limit legal and financial

liability associated with the circumstances of JetAway's site and proposed operationnamely the through-the-fence access point and the Off-Airport Agreementhat provide

JetAway, its tenants, and customers3! access to the Airport. The County's alternative to

any of the points discussed above was to say 'no' and direct JetAway to an alternative site

apart from the through-the-fence access point.

As sincere and determined as JetAway's hope for its leasehold vision may be, it is built on

the shaky legal foundation of the Off-Airport Agreement. The County's grant assurances

do not limit the County's proprietary right to attempt to nrinimize its exposure to the legal

jeopardy that the Off-Airport Agreement may represent. The County may act to limit,

mitigate or eliminate through-the-fence access, including the Off-Airport Agreement. It

may act to reduce its exposure to potential financial liability, so that it can avoid passing

on such costs to its aeronautical users. Its grant assurances require it to not unjustly

discriminate against its fully on-Airport tenants and to retain its rights and powers. Even

if the legal jeopardy is small, the Federal obligation is a one-way street, in favor of the onAirport tenants.

As stated, JetAway has no presence on the Airport apart from its Off-Airport Agreement. As

such it is equivalento any proponent of a second FBO at the Airport and is subject to the

reasonable planning judgments of the County as to where such FBO may be located. In

addition, it is subjecto the County's prerogative to solicit other interested parties in an RFP.

For the reasons discussed herein, the Director finds that the County has not unreasonably

denied access to JetAway, nor has the County unjustly discriminated against JetAway.

Furthennore, the County has not constructively granted an exclusive right by means of

unreasonable treatment of JetAway or through the imposition of unreasonable tenus.

Considering the above, the Director fmds that the County is not in violation of grant

assurance 23, Exclusive Rights or grant assurance 22, Economic Nondiscrimination.

Issue 5

Whether the County has provided more favorable treatment to JCP with regard to

retail aircraft services in a manner that unjustly discriminates against JetAway in

violation of Federal grant assurance 22, Economic Nondiscrimination, 49 V.S.C.

§ 47107(a).

JetA way raises several issues (discussed below) under this grant assurance and alleges that

the County has unjustly discriminated against JetAway. [FAA Exhibit 1, Item 1, page 49-

50]

31 It is unclear from the record whether JetAway intends to continue commercial aircraft storage services.

Page 45 of 50
FAA Docket No. 16-08-01 Director's Detennination

The County answers, "The County has not unjustly discriminated against JetA way. On

the contrary, if the County granted JetAway's proposal, which is the basis for this

Complaint, the County would be unjustly discriminating againsthe existing tenants on the

Airport." [FAA Exhibit, 1, Item 3, p. 40]

Many of JetA way's counts do not contain an allegation including the elements of a claim

of unjust economic discrimination. Also, most do not allege any facts that the Director

can construe as a denial of access to JetA way, reasonable or unreasonable.

The Director has described the fact elements of an allegation of unjust economic

discrimination, in the previously referenced Gate 9 Part 16 case:

In order for the Director to sustain an allegation of unjust economic discrimination,

the record must show the elements of unjust economic discrimination under grant

assurance 22. In a Part 16 proceeding, the Complainant has the burden of proof to

establish the elements of unjust discrimination. ..., the record must show that

another party similarly situated to the Complainant received preferential treatment

denied to the Complainant in similar circumstances. ...The FAA has acknowledged

that several factors can distinguish parties that a sponsor can justly treat differently,

without violating its Federal obligations. Such factors may be: period of lease,

business plan proposed; location of facilities, level of service and amenities, scope

of services, investment, market conditions, and reasonable actions by the sponsor to

promote and protect its ability to continue to serve the interests of the public in civil

aviation, including the enlistment of prudent business practices that may change

over time. [Gate 9, DD, p. 11]

Prudent business practice can and should include protecting the rights and powers of the

sponsor to continue as a going concern, including acting to limit, mitigate or eliminate a

through-the-fence access right.

In regard to the following allegations, the County repeats that JetAway does not offer any

facts to support that its specific claims are unjustly discriminatory against JetAway, nor

does it offer any legal support for its claims. [FAA Exhibit 1, Item 3, pp. 41-43] The FAA

agrees with the County.

With regard to counts 1-6, the statements all appear to describe instances when the County

acted to promptly develop its airport infrastructure in a manner that benefits its on-Airport

tenant and FBO service provider, JCP, in some cases by directly improving facilities used

by JCP.

1

2.

The COWlty made available and lease the "prime FBO location" to JCP .32 [FAA

Exhibit 1, Item 1, page 50]

The Montrose COWlty Building Authority refmanced the Airport's debt structure

for the benefit of JCP. [FAA Exhibit 1, Item 1, page 51]

32 With regard to the leasing and configuration of JCP's leasehold, see Issue 3, above.

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FAA Docket No. 16-08-01 Director's Detenllination

3

4.

5.

6.

The County accelerated the construction of improvements for JCP. [FAA Exhibit

1, Item 1, page 51}

The County paved a ramp area for JCP's exclusive use. [FAA Exhibit 1, Item 1,

page 52}

The County consttucted an access road to JCP's facilities.[F AA Exhibit 1, Item 1,

page 52]

The County is relocating taxiways to provide better access to JCP's facilities.

[FAA Exhibit 1, Item 1, page 52]

In counts 1-6, J etA way makes no claims or statement of fact that constitutes an allegation

of an unreasonable denial of access. JetAway has never been similarly-situated to JCP in

that it has never held the rights or met the standard to conduct a commercial aeronautical

activity on the Airport. Again, the County's grant assurances do not protect JetAway's

off-Airport business interests. Therefore, the actions are not unjustly discriminatory.

Counts 7-10 regard JetAway's claims of discrimination against JetAway's ability to

conduct its aeronautical business.

7. The County requires all transient aircraft to park at JCP facilities. [FAA Exhibit 1,

Item 1, page 52]

8. The County has given JCP control over all general aviation parking. [FAA

Exhibit 1, Item 1, page 53]

9. The County has prohibited JetAway from paving the ramp area authorized and

required by the Land Lease Agreement. [FAA Exhibit 1, Item 1, page 53]

10. The County has placed unreasonable restrictions on JetAway. [FAA Exhibit 1,

Item 1, page 55]

With regard to counts 7-10, JetA way was not authorized to conduct FBO operations onAirport under a Land Lease Agreement from a site adjacento its off-Airport facilities.

The 2006 JetAway DD addressed this issue, stating, "The area leased by JetAway pursuant

to the Land Lease Agreement was not intended for FBO operations and the use of that

leased premises is 'for parking and moving of aircraft and for no other purpose.'" [2006

JetAway DD, p. 29]

Counts 7-10 are moot since the Montrose District Court tenninated J etA way's Land Lease

Agreement in June 2008.33 This eliminated the County's landlord-tenant relationship with

JetAway and removed any pretense that JetAway's off-Airport commercial business was

ever protected by the County's grant assurances. Since JetAway's Land Lease was never

for any commercial purpose, including FBO activities, JetAway was never similarlysituated to JCP, so there is no unjust economic discrimination. Even assuming that

33 The Court stated, "The County also argues that JetAway breached the lease by using the leased area for

FBO operations. The Court agrees. It is indisputed that JetAway fueled airplanes on the leased premises

after entering into the Land Lease Agreement." [FAA Exhibit 1, Item 5, exh. 60, p. 31]

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FAA Docket No. 16-08-01 Director's Determination

JetAway was not using the Land Lease ramp to support its FBO business,34 JetAway

provides no evidentiary support that these actions constitute an unreasonable denial of

access.

Specifically, with regard to counts 7 & 8, JetAway claims that the County was harming

JetAway by limiting parking on its former Land Lease ramp to 1 hour, thus advantaging

JCP's dissimilar, on-airport FBO business. [FAA Exhibit 1, Item 1, p. 52] The County

denies this, citing a reason for its rule:

JetAway ...claims that the County requires all transient aircraft to park at JCP's

facilities. That claim is untrue. [See FAA Exhibit 1, Item 31 pp. 2-3] JetAway can

park aircraft on its ramp but it cannot park in the taxilane/taxiway or the OF A. It

also cannot park aircraft in the fueling area adjacent to JetAway for more than one

hour. [FAA Exhibit 1, Item 3, p. 42]

The evidence provided by the County supports its position. JetAway provides no counter

evidence to refute the County. As stated, in any case, the point is moot, since JetAway

lost its Land Lease by the Montrose Court Orger in June 2008.

With regard to count 9, JetAway alleges that the County denied it the ability to pave some

Airport property adjacent to JetAway's off-Airport hangar. JetAway stated that it wanted to:

pave a ramp area for parking and moving aircraft. Some of the aircraft would be

parked inside the hangar, as they had been with the County's knowledge, consent

and encouragement since December 2004. And some pilots and passengers would

use the lounge facilities. [FAA Exhibit 1, Item 1, p. 53]

The County notes this admission by JetAway, adding, "JetAway continued to use the ramp

for FHO purposes in support of its off-Airport, through-the-fence operation." [FAA

Exhibit 1, Item 3, p. 44] In fact, the County had stated their opposition to the construction

stemmed in part from the County's concern not to support "JetAway's combined throughthe-fence /on-the-Airport FHO operations." [FAA Exhibit 1, Item 3, p. 44]

With regard to count 10, JetAway admits its business interests on the Airport, despite

having no commercial lease on the Airport. JetA way alleges, "The County has recently

placed unreasonable and unnecessary restrictions on JetAway's ability to conduct any

business." [FAA Exhibit 1, Item 1, p. 55] As stated, JetAway's off-airport business

interests are not protected by the grant assurances and the County is free to limit, mitigate

or eliminate commercial or non-commercial through-the-fence access. The County's

concern regarding JetAway's commercial-use of Airport property under a non-commercial

lease (JetAway Land Lease) is reasonable and well-founded, as discussed in the Montrose

Court Order. [FAA Exhibit 1, Item 5, exh. 60, p. 31]

34 Of course, the Court found otherwise and terminated JetAway's Land Lease. But also, JetAway admits

this in its pleadings, stating under count 10, "The County has recently placed unreasonable and unnecessary

restrictions on JetA way's ability to conduct any business." [FAA Exhibit 1, Item 1, p. 55]

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FAA Docket No. 16-08-01 Director's Detemrination

Countll: The County has refused to negotiate with Jet4way in goodfauhfor the lease

of available premises for an FRO

In its last count, JetAway summarizes its grievances, examined above, and styles them as a

violation of FAA Order 5190.6A, stating:

FAA Order 5190.6A specifies at Par. 4-15 that the airport owner "has the

obligation to make available suitable areas or spaces on reasonable terms to those

who are willing and otherwise qualified to offer" FEO services and that "unless it

undertakes to provide those services itself the airport owner has a duty to negotiate

in good faith for the lease of such premises. [FAA Exhibit 1, Item 1, p. 56]

J etA way argues that the County is in violation of the FAA Order because the County has

failed to negotiate with JetAway in good faith. As stated, the FAA Order does not impose

obligations upon the sponsor.

In its entire Complaint, JetAway refers extensively to the record containing evidence that

the County has, in fact, engaged JetAway in negotiations to accommodate JetAway's

preferred location for a second FBO on the Airport. For example, the record includes

various draft and proposed settlement agreements. [FAA Exhibit 1, Item 1, exhs. 4-8] The

County's alternative to negotiating with JetAway for its preferred FBO location, from the

beginning, was to simply state that the County wished to avoid the legal, financial and

technical obstacles associated with the JetA way location. Instead of saying 'no,' to

JetAway's preferred location and issuing an RFP for the 9-acre Site, the County continued

negotiating in mediation. The evidence of the County's posture during negotiations more

nearly describes defensiveness and concern, than a lack of good faith. As stated above,

the FAA sees valid reasons for the County's concerns and notes that the County's grant

assurances allow it to limit, mitigate or eliminate the Off-Airport Agreement rights, in

favor of its fully-on Airport tenants.

Issue 5 Conclusion

JetA way has failed to establish that it is similarly-situated to JCP in a manner to sustain a

finding of unjust economic discrimination. As stated herein and in the 2006 JetAway DD,

JetAway's off-Airport interests are not protected under the grant assurances. Rather, the

County's grant assurances protect the County's Airport tenants (some of whom may be

JetAway's competitors) from JetAway's business interests conducted from an off-Airport

location. JetAway is due the consideration of any other seeker of a leasehold at the Airport.

Also, as stated above, the County had valid reasons for deciding to close out negotiations with

JetAway and to offer an alternative site for a second, competing FHO at the Airport.

The Director fmds that the County is not in violation of grant assurance 22, Economic

Nondiscrimination.

Page 49 of 50
VII. FINDINGS and CONCLUSIONS

It is unfortunate that the parties could not reach agreement to resolve the through-thefence access issues in a manner that would allow JetAway to become an on-Airport FBO.

However, the County's first obligation is to protect its on-Airport tenants from those

attempting to conduct commercial FBO activities through-the-fence from an off-Airport

location. The County is correct to respectfully consider JetAway's interest in leasing

Airport property as it would with any other applicant. Issuing an RFP for the 9-acre Site

would be a good way to do provide transparency. Before taking action however, the

County took great efforts to negotiate with JetAway to become an on-Airport FBO.

These efforts, including mediation, were not successful.

In the end, the evidence presented by the Complainant is insufficient to eclipse the

Airport's proprietary responsibility to make decisions that best serve the aeronautical

interests of the public and the interests of the Airport as a going concern.

Upon considemtion of the submissions and responses by the parties, the record herein,

applicable law and policy, and for the reasons stated above, the Director of the FAA

Office of Airport Compliance and Field Operations finds and concludes that the County

is not currently in violation of grant assurances 5, Preserving Rights and Powers; 22,

Economic Nondiscrimination; 23, Exclusive Rights; 24, Fee and Rental Structure,. or 29,

Airport Layout Plan.

ORDER

Accordingly, it is ordered that:

1. The Complaint is dismissed.

2. All Motions not expressly granted in this Determination are denied.

RIGHT OF APPEAL

This Director's Detennination, FAA Docket No. 16-08-01, is an initial agency

detennination and does not constitute a fmal agency decision and order subject to judicial

review. [14 CFR § 16.247(b)(2)] A party to this proceeding adversely affected by the

Director's Detennination may appeal the initial detennination to the FAA Associate

Administrator for Airports pursuant to 14 CFR § 16.33(b) within thirty (30) days after

service of the Director's Detennination.

I:J c.:t:/ >.. ~

Randall S. Fiertz

Director, Office of Airport Compliance

and Field Operations

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