FAA DocketNo. 16-08-01 Director's Detern1ination

DeKalb County, FAA Docket No. 16-05-13

(February 1,2006) (Director's Determination) (Gate9), the Directorstated:
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 leaseproposal, a sponsor is responsible

for exercising its rights and powers to be responsiveto 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

herethat MontroseCounty is not simply citing its ALP as prohibiting it from accommodating JetAway andwalking away,aswasthe case in~. Instead, the County

hasengaged

in extensive

discussions

with JetA wayto attempt

to accommodate

JetAway'spreferred

locationfor an FBO, despite a problematic

throughthe-fence

access point. It hascited actualreasons for not preferring

the FBO alternatives at JetAway's location

and it hasofferedan alternative location.I8 The County summarizes

its reasons,

stating that it
wants any

JetAway FRO operation

[to be J on theAirport and it wantsthe throughthe-fence issuesofthe 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

discriminatoryeffect ofthe Off-Airport Agreement

for the on-airport commercial aeronautical

activities,the County has identifieda second

FBO location. It is clearfrom 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 hasconstructed

this red herring. JetAway holdsthis perception

thatthe ALP process

mandates

thatthe County must accept JetAway's off-airport parcel, because it was oncedepicted

on an ALP as a potential

future locationfor an FHa. This is clearly not the case

andthe Director believes it is againimportant

to stress that an airport's planningprocess

is dynamic, not static. Considering

the above,

the Director grants

the County's motionto dismiss the allegation of the violation of grant

assurance

29, Airport LayoutPlan. The County's planning has been consistent

with the requirement

hat airport development be safe, useful andefficient.

17 The Director distinguishes the extant

case from ~ by noting that DeKalbdid not cite an airport benefitobtained

by adhering

to its ALP, nor did it provide anyreasonable option for access

andthe FAA had independent

knowledge

of stymied aeronautical

development

at DeKalb's airport. 18 This alternativelocation 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 2006JetAwayDD 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 50FAA Docket No. 16-08-01 Director's Determination

Issue3
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

thatthe Respondent

hasgranted

exclusive FBO rights to JCP in conscious and intentionalviolation of the guidance contained

in AC No. 150/5190-6

and FAA Order5190.6A 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 exclusiveright by the leasing of availableproperty

to JCP, counts1-5,8 & 9. Counts 6 & 7 arediscussed

underIssue

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 Countyanswers

thatthe allegation

is untrue, stating, "the Airport hasa 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

hasgranted

an exclusiveright, 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 squarefoot 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 therehas 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 landfor the FRO -now that the County has leased all available land on the west side of Runway 13/31 to

19 The Advisory Circularsand Orders do not imposeFederal

obligations. Rather

Federal law, grant
assurances

and quitclaimdeeds

impose obligations.FAA Orders provide guidance

to FAA employees

in carrying out their

jobs and responsibilities. Advisory circularsprovideadvice to a sponsor

in complying with the Federal

obligations. The ExclusiveRightsAC provides basic information

pertaining

to the Federal Aviation Administration's (FAA's) prohibition onthe grantingof 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 50FAA DocketNo. 16-08-01 Director's Determination

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

consistent

with an FBO on or nearthe 9-acre Site. SeeFAA 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

mapof 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.

planningdocuments

do not necessarily

prevent an airport sponsor

from pursuing alternative

airport benefits

or the public's aeronautical interests. Rather,

the Countyis using its planningprocess to explicitly identify a site that is fully on the Airport. Also, the Countyis not simply pointing to its ALP, and no otherreason, to not favor JetAway'spreferred

FBO site that is associated with a through-the-fence access point. JetAway's citationof its submitted planningevidence

is contradictory

and its application of the standard

of compliance

is inapt. Consequently,

JetAway'sarguments

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,

it is 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 JetAwayDD andthe partiesin 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 otheralternative parcel at the Airport in its Complaint. However, the County may havefirst raisedits willingness to offer the specific9-acre Site for FBO development in its Answer. [FAA Exhibit 1, Item 3, p. 2] Therefore, in order to assist he partiesin understanding

the role of compliance,

the Directorwill address the extensive

argument between the partiesoverthe suitability of the 9-acre Site as opposed

to JetAway's preferred FBO location, adjacent

o the through-the-fence

access point andJetAway's existing off-airport parceland hangar.

20 With regard

to the so-called

FBO Locations1 & 2 thatcomprise JCP's leasehold

onthe westside of the Airport andcited 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 addsthata draft Master Planningdocument

(Working Paper

Three) datedMarch 2005and submitted by JetAway in its Complaint depicts bothJetAway-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 2006Complaint. It contemplates that the south end of the westside 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 50FAA DocketNo. 16-08-01 Director's Determination

In its Reply, JetA

way initially makes

an admission

about a potentialFBO 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 for an FBO at best But the County cannot 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 oneof the County's airport consultants

with regard

to the County's assertion thatthe 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

Siteto JetAway'spreferred 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 andfor 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 50FAA DocketNo. 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 JetAwayfueled 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, merelyto accommodateJetAway'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 JetAwayFHO 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. Remediesare 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 resourcesand manage risk.

21 Taxiway E is the taxiway immediately adjacent o JetAway'sexisting off-airport hangar. Taxiway E providesairport access

to all through-the-fence

users of the Airport. Page 29 of 50FAA DocketNo. 16-08-01 Director's Determination

The Countyanswers

by stating:
TheCounty,

however, does not havean obligationto grant JetAway an FBO operationat the location dictatedby JetAway, on the terms

dictated by

JetAway and without an RFPprocess. JetAway does not have the right to substitute

its site selection judgment for that ofthe County. TheCounty's obligation is to ensure

that JetAway has access

to the Airport to conduct

commercial

aeronautical

activities. The Countyhassatisfied this obligation by designating the9.612 acresite as a second FBO location. [FAA 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

thatthe County

hasgranted

an express

exclusive

right, JetAway must showthatthereis no other available and suitable

site for an FBO at the Airport.
Beforethe County's explicit offering of the 9-acre Site in its Answer, JetAway hadstated:
Land is and has beenavailable on the Airport for a second FBO, as the Director noted in his Determination,andthe most logical parcel of land for the FBO... is the SouthTract [on-airport parcel adjacent

o the through-the-fence

access point] which is adjacent

to [JetAway's off-airport parceland 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 mostactive runway to the 9-acre

Site, requiring runwaycrossings.However, here the FAA is unconvinced thatthe 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

conditionallyand 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 potentiallyintroduces significantsafety

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'sground

vehicles to cross the same runway to getto the Airport's terminal area,

associated

with JetAway'spreferred site. This also raises

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

of ground vehicles across a runwayalso potentiallyintroduces significantsafety

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

of vehicle andpedestrian incursions

on the airfield.
The CountysitesRoadhouse Aviation v Tul~ FAA Docket No. 16-05-08

(June 26, 2007) (Final Decision

and Order)

<Roadhouse),

quoting:
Theexclusive

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

havethe right to access

the airport to conduct commercial

aeronautical

activities. [Roadhouse,

FAD, p. 23]

Page 30 of 50FAA DocketNo. 16-08-01 Director's Determination

The FAA notes

thatthe rmal FAA-approved ALP, prepared

by Barnard

DunkIeberg

& Co. (the County's existing airport planner/consultant) depicts the 9-acre

Site asavailablefor 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 locationis inconsistent, unconvincing,

andfails to prove thatthe County's Federal obligationrequiresit to accept JetAway'spreferredlocation as an FBO site. Express Exclusive Rights Counts 2-5 JetAway cites circumstances

of the Airport and actions of the County

to show alleged intentto grant

an exclusiveright in support of its allegation:
Count 2. The Countyhas leased more Airport land to JCP than required for it FRO. Count3. TheCounty

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 ableto put into productive usewithin a reasonable period of time. Count 4. The County

executed a lease agreement

with JCP that contains

an option and right of first refusal. Count5. TheCountyhas manipulated the MinimumStandards

to protect JCP's exclusive rights and interests. JetAway presents these additional

arguments

as circumstantial

evidence in support

of its central allegation

thatthe 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 instructsFAA employees

asto the ways in which an airport sponsor might intentionallyor unintentionally

grant an exclusive

right. It doesnot 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 accept

he premise

thatthe County

has forfeited its ability to accommodate a second FHO at the Airport.
Counts 2 & 3
With regard

to counts 2 and 3, the Directornotes thatthese

are not independent

allegations of a granting

of an exclusive

right. JetAway

states:
The Countyhas leased

more Airport land to JCP thanrequiredfor its FRO The Countyhas leased

Airport land to JCP without anyimmediate needfor the land beingdemonstrated

and documented

by JCP, and that JCP will not be ableto put into productive usewithin a reasonable period of time. [FAA Exhibit 1, Item 1, pp. 24 & 26]

Page 31 of 50FAA DocketNo. 16-08-01 Director's Detennination

The County generally

denies all of the allegations,

stating: JetAway providesno evidence

that JCP leases

more land than it requires. That is really a subjective

determinationby

JCP The County'sperception is that JCP needs the land it is leasing. Second JetAway requested

513,513in its [2005 FBO Proposal]. In its identicalDecember 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 Directorstated: Respondent

correctly identifies that it is not required under the Federal grant obligations to independently assess whether a tenant'sproposalfor future leased property is factual or immediately needed by theproponent to provide aeronautical services. No grant assurancespecifically requires that a demonstrated immediate

need be proven before an airport approvesan assignmentof a lease. mim, DD, p. 18] As stated,

JetAway'sextensive

arguments

regarding the size,layout, improvements, financingand 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

offeredthe 9-acre

Site. Evenif the FAA accepts the facts regarding JCP's useof 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,

JetAwayhas

made no showingthatthe County leased moreAirport land to JCP than required

for its FHO. JetAway hasalsofailed to show

thatthe County

has leased

Airport land to JCP without any immediate

need for the land beingdemonstrated anddocumented

by JCP, and that JCP will not be able

to put into productive

usewithin a reasonable

period of time.
Count4
With regard

to count 4, this right of first refusalis not for additional propertythat could be usedfor a competitive

FBO, but ratheran option for extension of a leasehold

for currently occupied property. It doesnot remove propertyotherwise

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 acceptsthe 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 50FAA DocketNo. 16-08-01 Director's Determination
Count5 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 JetAway 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 adjacentto the through-the-fence access point] which is adjacentto [JetAway's off-airport parcel]." [FAA Exhibit 1, Item 1, p. 43]
The Respondentgoes 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 recordshows

that both FBO proposers requested

no less than 300,000

sq. ft. of onAirport leasehold

and up to over500,000

sq.ft. So, it is reasonable for the County

to raise its minimwn square

footagerequirement

to a mid.point of 350,000 sq. ft. This is whatthe Countydid when it adopted its 2005 Minimwn Standards. [FAA Exhibit 1, Item 1, exh. 21] Furthermore,

the property on the westsideof the south endof runway 13/31 (now occupied by JCP) doesnot 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 quadrant

o add up to only 436,280 sq.ft. [FAA Exhibit 1, Item 1, exh. 29] It appears

prudent thatthe County,at the time, negotiated with JCP to occupy

a reasonably

compact and contiguous

FBO facility, smaller

than anyon-airport leasehold that JetAway

has everrequested

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

onthe westside of the Airport andcited 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 addsthata draft Master Planning document

(Working Paper

Three) datedMarch 2005andsubmitted by JetA way in its Complaint

depicts both JetA way-designated

FHO Locations1 & 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 2006Complaint. It contemplates thatthe south

end of the westside 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 anycase, it is JetAway, not the County or the FAA, that appliessuch importance

to the details of draft planningdocuments. The FAA doesnot seesuch

importance

or relevance.

Page 33 of 50FAA DocketNo. 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-ServePumps,DD, p. 31] As previously

stated, the fact thatthe Countyis not providing a parcel to JetAway,

which in JetAway's

opinion, is the most convenient, logical or preferred

doesnot necessarily mean thatthe Countyis manipulating the Minimum Standards

to protect

JCP.
Other Exclusive Rights Arguments 8 & 9 JetAway makes observations

to support

its circumstantial

case against he Countyby citing language in Federal

law and policy including a specific exception provided by the law. Count 8. The only exception

thatwould allow JCP

to provide exclusive

FRO services

at the Airport doesnot 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

count8, ascited by JetAway, Federal law hasalways

providedan 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 onefiXed-base operator to provide the services,.and (B) allowing more than onefiXed-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 denya second FBO... Further,

the County

has not andwill 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 asthe Countyhas committed

to permit a competing FBO to locateon the Airport and specificallyon 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 answersthat it "monitors the fuel prices at the regional airports and has not found any facts or evidence to support
Page 34 of 50FAA DocketNo. 16-08-01 Director's Detennination

JetAway'sclaim thatJCP'sfuel pricesare higher than all regionalairports." [FAA Exhibit 1, Item 3, p. 40] JetAway supplies evidence in its Reply, presenting

an Airnav.com internet page showingthat

jet fuel prices at the Airport in the May-July2008timeframe aremore expensive

than most airports

within the 65 miles, but lessexpensive 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 Countyhasgranted

an exclusive

right. The evidence

is not conclusive

with regard

to a fmding of the granting

of an exclusive

right. Considering

thatthe evidence

shows that Grand Junction'spricesare higherand that manyof the airportswith seemingly lower fuel prices list only onefuel provider at the airport in question undermines

the relevancy

of the evidence.Also, the F

M hasnoted

the existence

of relatively high fuel prices at airports with more

than onefuel retailer,and hasrecognized that an airport sponsor

has many options to monitor and address

high fuel prices!3 However,comparatively higher fuel prices may signalto a sponsor that it should

pursue competition.
Issue3 Conclusion
For the reasons

discussed

herein, the Directorfinds thatthe 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 Countyis under no obligation

to accept JetAway's

opinionof the most convenient or "preferred" or "logical" parcel on the Airport for JetAway'sbusiness interests.The County has offered a specific9-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 Countyfrom legal liability, litigation costs,

andthe loss of rights andpowersby 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 equivalent

o any proponent

of a second FBO at the Airport and is subject o the reasonable

planning judgments

of the County asto where such

FBO may be located. Considering

the above,

the Directorfinds thatthe Countyis not in violation of grant assurance

23, ExclusiveRights,by means of the distributionof Airport parcels suitable for FBO activities.

23 S~lf Serve PumQsstates, "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 50FAA DocketNo. 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 meansof 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, page39] Airport sponsors

are prohibited by grant

assurance

22 from imposingunreasonable restrictions

and from unjusteconomic discrimination

against aeronautical

service providers proposing

to operate

aeronautical

businesses.

In the past,

the FAA has

found that unreasonable

restrictions,

delayor unjust discrimination could constructively

grant a prohibitedexclusive

right. Generally,

however, the Director considers

these allegations undergrant

assurance

22 as a test for unreasonable terms, as a prerequisite

for the finding of a constructive

grant of an exclusiveright!4 Also, as discussed above, these are positions considered

by the parties

in confidential mediation (some of which JetAway admitshad been

resolved). As the Director notedabove, the confidentialityof the mediation

hasbeen breached and the documents,

includingthe proposed

settlement agreements

are now in the public domain. Nonetheless, the Directorwill not opine on the parties'conduct,

positions,or allegedFBO 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 andacknowledges

this. The analysis and discussion,

however,underIssue

4 herein, will attempt

to provide clarity in regard to the County's obligationsundergrant assurances

22 and23. JetAway states, "the County has never really consideredthe actual FBO agreements proposed by JetAway, and has insisted on unreasonableconditions and concessions from JetAway, One Creative Place and their individual owners." [FAA Exhibit 1, Item 1, p. 30]
The Countystates

that it does

havereasons

for declining

to pursue JetAway'spreferred locationof its FBO, stating thatthe County:
woots any

JetAway FBO operation

[to be] on theAirport and it wants the throughthe-fence issuesofthe 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'sexpert

and the unjustly

discriminatoryeffect ofthe Off-Airport Agreement

for the on-airport commercial aeronautical

activities,the County

has identified a second

FBO location. It is clearfrom 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 50FAA DocketNo. 16-08-01 Director's Determination

As discussed

above, the Directorfinds thatthe 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: TheCounty

sought to accommodate

JetAway's

request by resolving

the through-thefence issues

and without exposure

for the County'sresidents and the expense

of further litigation. TheCounty was unable

to do so. By identifjling and making availablethe

9. 612-acre

site, the Countyis confirmingits position from theonset: 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 Countyfrom legal liability and cost,andthat protects its ability to continue as a going concem.25

As stated,

the County's grant

assurances

do not require it to accommodate

JetAway'spreferredlocationon the Airport. The Countyhas reason to prefera locationthat is not adjacent o the through-the-fence

access point, like JCP's FBO location. JetA

way hasdemonstrated

a recordof transgression with regard

to fueling, trespassing,26

adhering to the Minimum Standards, andadvertising

services it is prohibited from offering. After the Respondent took action

to protectits proprietary

rights and seek

a legal injunction against

JetAway,

JetAway ignored the Court's

temporary

restraining Order andwas found to be in contempt. [See Montrose

CourtOrder, 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'sdecision-making with regard to potential airporttenant proposals

andJetAway'sproposal

to be adjacent

o its throughthe-fence

operation and off-Airport customers. Otherthan

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

activitiesarewise to makearrangements to lease airportproperty, 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 recordshows

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

theAirport's proprietary discretion to make management

decisions in the best aeronauticalinterests

of the public, balanced

with the bestbusiness

interestsof theAirport as a going concern. " rssPumQs,

DD, p.25] 26In late February/early

March of2006, JetAway beganexcavation

on Airport propertywithout the County's permission. At the County's direction,JetAway

ceased construction

andfilled the area

that had been excavated.

However,

JetAway then filed a third lawsuit, seeking an injunction against

he County in orderto continueconstruction onthe East Ramp

Area of the Airport's property. In November of2006, the District Court of MontroseCounty denied JetAway's

request, concluding

that JetAway "did not have a probability ofsuccess

on the merits." [FAA Exhibit 1, Item 5, exhibit60, p. 23] In a decision dated June 30,2008,the District Court of MontroseCounty found that JetAway

trespassed

on County

property when it directed workers to beginconstruction

withoutthe County's

permission.

[FAA Exhibit 1, Item 5, exhibit 60, p. 32] Page 37 of 50FAA DocketNo. 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,

allegingthatthe Countyhas insistedon unreasonable tenDs or conditionsupon

JetAway'spreferred

FBO location,its future construction and operation that is adjacent

o its off-airport location,andthe through-the-fence access point. [FAA Exhibit 1, Item 1, pp. 30-47} JetAway'sOff-Airport Interestsand Entities are not Protected by the Grant Assurances
In sub-counts

6a and6d, JetA

way argues

thatthe County

is unreasonably

sanctioning

its off-Airport interests,

stating: The Countyhas adamantly refused to consider any

proposal for JetAway

to provide FRO services

on theAirport unless

One Creative

Placewould agree

to unreasonable

restrictionson the use of its private property offtheAirport, 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 ofthe Off-Airport Agreement

by One Creative

Place, or any of its affiliated entities or lessees, would constitute

a breach of

JetAway's

FROAgreement.

[FAA Exhibit 1, Item 1, pp. 35-36]
It is again important

to note that asa general

principal,the FAA doesnot support agreements that grant

access to the public landingarea by aircraft stored

and serviced

off-site on adjacent property. Through-the-

fence arrangements

aredisfavored

by the FAA and can placean encumbrance

upon the airport

property. Thus reducing the airport's ability to meet its Federal

obligations. Accordingly, underits grant assurances,

the Countyis free to actto limit, mitigate, or eliminate the effects

of the Off-Airport Agreement. [See 2006 JetAway DD] One way to mitigatethe 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

allowsthe County

to view One Creative

Place and JetAway

asthe same

entity. It appears that the County

is acting within its proprietary rights, within its Federal

obligations and is taking actionnecessary undergrant

assurance

5, Preserving

Rightsand 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 participatingin the use of the RDC-Ieased premises,

is not violating its federal obligations" with regard

to grant assurance

22, Economic

Nondiscrimination.

[See Recordof Determination, 16-97-02,

page 17]Also, in SeaSands

Air TransRort.

Inc. v. Huntsville-Madison Countv A!mQrt Authoritv, FAA DocketNo. 16-05- 17 (August28, 2006)(Director's Determination), the FAA found that the actions and behavior

of a universal agent, such asthe president

of a company,

areattributable

to the business

entity over which the universal agent hascontrol." [See

Director's Determination,16-05-17, pages 21, 23] Page 38 of 50FAA DocketNo. 16-08-01 Director's Determination

The County May Protect Itself againstLegal Liability & the County DoesNot Haveto Accept Donated Land



# . Undersub-counts 6b, 7b(2)and 7c, JetAway raises instances in which the County is reluctant

to expose

itself to legal

jeopardyfrom JCP. JetA way alleges

that it is unreasonable

for the County

to pay heed

to potentiallegaljeopardy that may pertain to the County

if the County

wereto take actionsagainst he interests

of its on-Airport FBO, JCPand that are preferred by JetAway,including acceptance of JetAway's off-Airport parcels. Sub-count

6b involvesthe 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 2006for 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 currentindemnification with JetAway

with regard

to the existing Off-Airport Agreement. [FAA Exhibit 1, Item 1,exh. 2, p. 6] JetAway states thatthis indemnification thatthe Countyis requesting is not required

of JCP. Clearly,the circumstances

aredifferent. The recordindicates thatthe County

hasconsidered numerous

options to accommodate

JetAway,

including leasing

land adjacent

o the through-the-fence

access point usedby 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

setout 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

undersub-count

7b(2). The restrictive covenant in question

allows specific activities andcould limit activitiesof 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, canJetAway

or any of its affiliated or related entities or persons commence

any FBO operations...until there has been afinal judicial resolution of

whetherrestrictivecovenants prohibit FBO use of

property donated

to the Airport because

such property was

formerly includedin the aerospace park and subject to suchrestrictivecovenants. [FAA Exhibit I, Item I, p. 42]
It appears

thatthe 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 50Director's Determination

FAA DocketNo. 16-08-01

would be ownedby the County!8 In fact, the MontroseCourt Order. discussed

above, has determined

thatthe restrictive provisionactually prevents the vendingof aviation

fuel from those

properties.This would appear to be a unique 'double-edged' problemfor JetAway. But it is rightfully JetAway's liability to bear,even if small. JetAway

states that JCPhasthreatened

to sue the Countyover 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 ideaof donating

land is too speculative

for the Directorto 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 Countyis permitted

to protect

the Airport account

from financial loss dueto legal jeopardy. Such

a provisionprotects

the public interest

in civil aviation by protecting

the Airport's users

from havingto 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 Countystates, "the County

would agree

that a donation

or exchange

of land is not feasible

in view of VOR, OF A, geographic,

environmental

and restrictivecovenants issues that pertain

to such proposal." [FAA Exhibit 1, Item 3, p. 37] The grant assurances

do not requirethat the County

alter its property map

to accept propertyas a donation,

eitherasfee-simple

or as a long-term

lease, in order to accommodate

the interests

of a party thatwishes

to preserve its investment

in its off-airportfacilities. 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 significantlegal and/or financial liability on the County. Failure to protect

itself might be evidence

that the Countyhasfailed to preserve its rightsand powers,

as requiredby its grant

assurance

5. As stated,

it appears

thatthe County

has determined

that it is imprudent

for it to proceed with such

a scenario,

choosing,

instead to reasonably

say'no' to this specificproposal and to offer an alternative

solution.
In someSub-Counts

the Partieshave 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

thatthe test for compliance

is what a sponsor

actually does, not what a document

may state. Rarelyare minimum standards, leases or plansso perfectly

crafted asto be abovecriticism during the life of their applicability. This extant case hasillustrated

this long-standing principle?9 As stated,

the Director

will not makea detailed

analysis of each particular

28 Proposals

included a fee simple transfer

as well as longterm lease. For purposes of Grant Assurance

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

requirement. 29 As statedin Self Serve

Pumps. "the FAA does

not judge an airport sponsor simplyby theplain language of agreements

or minimum

standards,

since suchdocuments

are rarely so perfectly

crafted as to avoid all possibilities

for inconsistency

over time,changing

circumstances

and interpretations.

Rather, the FAA
Page 40 of 50Director's Detennination

FAA DocketNo. 16-08-01
negotiating

stance takenby parties in confidentialmediation 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 respect o FBO management

qualification requirements to be imposed

upon JetAway'sproposed

FBO, the partiessubmitidenticalsections in their respective proposals

of November

2007. Both draft settlement agreements

tate, "JetAwaywill obtainand maintain

professional,

experienced

FBO management

for its FBO, which management

will be subject

to reviewandapproval

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 provisionappears 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 anddismissed

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 hasno leasehold

presence on the Airport and has not yet hadthe right to conduct commercial

aeronautical

activities upon

the Airport (See Montrose CourtOrder). Consequently, the County has

no obligation

to compel

JCP to direct airport users

to JetAway'sservice

offered pursuant

o 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 makeitself a similarly-situated FBO in relation

to the UNICOM. Both draft settlement agreements

state,"Pursuant

o FAA Order5190.6A,

the County will revoke

the existing FBO's right to operate the UNICOM and determine the level of manned

service thatthe County

will provide, if any." [FAA Exhibit 1, Item 1, exh. 5, par. 17 & exh. 6, par. 12] In its Reply, JetAway alleges thatthe County may attempt to makeJetAwaypay for the costof the UNICOM, without proving to JetAway that it's also charging JCP,equally. This is a speculative claim. The FAA observes thatthe County should distributecosts

to its FBOsthrougha 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 thatthe Countyis requiring JetAway to construct

crewand passenger lounge facilities totaling at least 4,000 square

feet. It states

thatthis 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 50FAA DocketNo. 16-08-01 Director's Determination

larger than requiredby the 2005 Minimwn Standards, but equivalent

o the size facility required in JCP's lease.

[FAA Exhibit 1, Item 1, p. 46] In fact, it does appear thatthe 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 oftenfleeting. 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 sizeof JCP'sfacilities 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 certainlyan appropriate positionfor the County

to take." [FAA Exhibit 1, Item 5, p.39] Under

the circwnstances,

we agree with JetAway

andthe County.
In someSub-Counts JetAway alleges County is !!Q! required to take specific actions
At sub-count

6e and 7a, JetAway

alleges thatthe County

is choosing

to take actions

that its grant assurances

do not requireit 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 morecomprehensive

thanthe 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

andagreed

that an RFP for a second FBO would be 'unnecessary

and inappropriate,'"

but afterJCP

threatened

to sue the County,

the Countyraised

the possibility of issuing an RFP for a second

FBO. [FAA Exhibit 1, Item 1, p. 38] The Directoraddressed this issuespecificallyin the 2006 JetAway DD. The Directordisagreed

with JetAway's

2006 assertion

thatthe RFP process

for a second

FBO is unnecessary

anddelaying. 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 chooseto 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 footnotein the 2006 JetAwayDD 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 bestuse 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 50FAA DocketNo. 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 andto provide more choice and services for thepublic users." (Coroorate Jets v CitYof Scottsdale,

FAA DocketNo. 16- 01-12 (March 15,2002)(Director's Determination), p. 10)
The precedent

in the 2006 JetAwayDD and Corporate Jets appliesin 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 thatthe County

appeared flexible on JetAway'sproposed lease term of35 years,but changed

its position afterpressure from J CP. JetA way states,

"... the County ultimately insisted

thatthe term provisions

be identicalto those

in the JCP FBO Agreement-

an initial term of twentyyears with a ten-year

option." [FAA Exhibit 1, Item 1, p. 40] The County

answers, "the Countydoesn't

perceive that reqUiring

all FBO's to have the same term is eitherunreasonable or unjustlydiscriminatory." [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 establishthe terms of its FHO leases. 0
In someSub-Counts

the PartiesDiffer



# . At sub-count 7b(1) JetAway

states that it's unreasonable

and discriminatory

to requireJetAway

to meet the applicable

minimumstandards

before commencing FBO operations,

whenJCP

was not formally required to demonstrate

that it had met the minimum standards beforeit began

operations

in 2006. JetAway states, "... the County

was indeed

goingto 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

beforeFBO operations

commence."

[FAA Exhibit 1, Item 3, p. 37] JetAway has not providedevidence that JCP had not metthe minimum standards before beginningoperations

in 2006. However~

JetAway focuses its argument

in its Reply~ stating "But the point is thatthe County did not require

JCP to do anything

to demonstrate compliance

with the Minimum Standards beforecommencing

operations

and yet insisted that JetAway

would have

to do so." [FAA Exhibit 1, Item 5, p. 37]

30 The partiesshould

note that in most

cases, under a long-term

lease, the airport owner

transfers the costof the capital improvement andthe 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 longto ensure thatthe tenant

gets not only a return ofits investment,

but a return on its investment aswell. [See

Skvdance

HelicoRters

v. S~dona

Oak-Creek

Aimort Authority, FAA DocketNo. 16-02-02 (March 7,2003) (Director's Determination) p. 29.
Page43 of 50FAA DocketNo. 16-08-01 Director's Determination

The standard

of compliance

doesnot requirethat airport sponsors enforce minimum standards

so rigidly asto require

identicaltone andposture towardall competitors

that have different records

and history with the sponsor. [SeeRick Aviation v Peninsula Airport Commission-

FAA Docket

No. 16-05-18

(May 8, 2007) (Director's Determination)

p. 16] JCPand JetAway

are not similarly situated.Apart from the differences in location, amenities,

circumstances

andtime, JetAway

hasaccess

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'ssituation. Further, in this circumstance, it is reasonable

for the County

to require

a second FHO to meetminimum standards before beginning

operations

and it is reasonable

for the County

to requireJetA

way to expeditiously

construct its on-Airport facilities and not rely on off-Airport infrastructure.
At sub-count

7e, JetAway objectsto the County's requirement that it pay the same leaserates as JCP despite apparent differences in the quality of the leased properties. [FAA Exhibit 1, Item 1, page46] JetAway states, "the County's insistence on identical FHO revenue provisions (rent) until now has been unreasonableand 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 addressand 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 numerousvariables. It is acceptable to rely on marketmechanismsto 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 50FAA DocketNo. 16-08-01 Director's Determination

Issue 4 Conclusion As discussed

above, the County hasnot actedunreasonably in regard to declining JetAway'sproposals.The County has good reason

to attempt

to limit legal andfinancial liability associated

with the circumstances

of JetAway'ssite andproposedoperationnamely the through-the-fence

access point andthe Off-Airport Agreement hat provide JetAway, its tenants,

andcustomers3!

access to the Airport. The County's alternative to anyof the points discussed above wasto say'no' and direct JetAway to an alternative

site apart from the through-the-fence access point.
As sincere

anddetermined

asJetAway'shopefor its leasehold vision may be, it is built on the shakylegal 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 jeopardythatthe Off-Airport Agreement may represent.

The County may actto limit, mitigate or eliminate

through-the-fence

access, includingthe Off-Airport Agreement. It may actto reduce

its exposure

to potentialfinancial liability, so that it can avoid passing on suchcosts

to its aeronautical

users. Its grant

assurances

require it to not unjustly discriminate

against its fully on-Airport tenants andto retain its rightsand powers. Even if the legaljeopardyis small,the Federal obligationis a one-way

street, in favor of the onAirport tenants.
As stated,

JetAway hasno presence

on the Airport apartfrom its Off-Airport Agreement. As suchit is equivalent

o 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 subject

o the County's prerogative to solicit otherinterested parties in an RFP.
For the reasons

discussed

herein, the Directorfinds thatthe County hasnot unreasonably denied access to JetAway,nor has

the County unjustly discriminated against JetAway. Furthennore,

the County hasnot constructively granted an exclusiveright by means of unreasonable

treatment

of JetAway

or through

the imposition

of unreasonable

tenus. Considering

the above,

the Directorfmds thatthe County is not in violation of grant assurance

23, Exclusive

Rightsor grant

assurance

22, Economic

Nondiscrimination.
Issue 5
Whether the County has provided more favorable treatment to JCP with regard to retail aircraft servicesin a manner that unjustly discriminates against JetAway in violation of Federal grant assurance 22, EconomicNondiscrimination, 49 V.S.C. § 47107(a). JetA way raises

several issues (discussed

below) under

this grant

assurance

andalleges

that the Countyhas unjustlydiscriminated against JetAway. [FAA Exhibit 1, Item 1, page49- 50]

31 It is unclearfrom the record whether JetAway intends to continuecommercial

aircraftstorage

services.

Page45 of 50FAA Docket No. 16-08-01 Director's Detennination

The County

answers, "The Countyhasnot unjustlydiscriminated against JetA way. On the contrary,if the County granted JetAway'sproposal,

which is the basis

for this Complaint,

the County

would be unjustlydiscriminating against he 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 assurance22. 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 severalfactors 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 ofprudent business practices that may change over time. [Gate 9, DD, p. 11] Prudent business practice can and shouldincludeprotecting the rights andpowers

of the sponsor to continue

asa going concern,

including actingto limit, mitigate or eliminatea through-the-fence

access right.
In regard to the following allegations, the Countyrepeats

that JetAway

doesnot offer any facts to support

that its specificclaims 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 COWltymade available and leasethe "prime FBO location" to JCP .32 [FAA Exhibit 1, Item 1, page 50] The Montrose COWltyBuilding 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.
Page 46 of 50FAA 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 ramparea

for JCP's exclusive

use. [FAA Exhibit 1, Item 1, page52} The County

consttucted

an access roadto JCP'sfacilities.[F AA Exhibit 1, Item 1, page 52] The Countyis relocating taxiways to provide better

access to JCP'sfacilities. [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 neverbeen

similarly-situated

to JCPin that it hasnever

held the rights or metthe standard to conduct

a commercial

aeronautical activity on the Airport. Again, the County's grantassurances do not protect

JetAway's off-Airport business

interests.Therefore,

the actions

are not unjustly discriminatory. Counts7-10 regard

JetAway'sclaimsof discrimination against JetAway's ability to conduct its aeronautical

business.
7. The Countyrequires

all transient

aircraftto park at JCPfacilities. [FAA Exhibit 1, Item 1, page

52] 8. The County hasgivenJCPcontrol overall general aviation parking. [FAA Exhibit 1, Item 1, page

53] 9. The County

hasprohibitedJetAway

from pavingthe ramp

area authorized

and requiredby the Land Lease Agreement.

[FAA Exhibit 1, Item 1, page 53] 10.The County

hasplaced

unreasonable

restrictions

on JetAway. [FAA Exhibit 1, Item 1, page55]
With regard

to counts 7-10, JetA

way was not authorized

to conduct

FBO operations

onAirport under

a Land Lease

Agreement

from a site adjacent

o its off-Airport facilities. The 2006 JetAway DD addressed this issue,

stating, "The area

leased by JetAwaypursuant to the Land Lease

Agreement

was not intended

for FBO operations

andthe useof that leased premises is 'for parking and moving of aircraft and for no other purpose.'" [2006 JetAwayDD, p. 29] Counts 7-10 are moot since

the MontroseDistrict 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

anypretense

thatJetAway's off-Airport commercial business was ever protected

by the County's grant

assurances.

Since JetAway'sLand Lease

was never for any commercial

purpose, including FBO activities, JetAway was never

similarlysituated to JCP,so thereis 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] Page 47 of 50FAA DocketNo. 16-08-01 Director's Determination

JetAway was not usingthe Land Lease ramp to support

its FBO business,34

JetAway provides no evidentiarysupport

thatthese

actions constitute

an unreasonable

denial of access. Specifically,with regard to counts 7 & 8, JetAway

claims thatthe County

was harming JetAwayby 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 refutethe County. As stated, in anycase,

the point is moot, since

JetAway lost its Land Lease

by the MontroseCourt Orger in June 2008.
With regard to count 9, JetAway alleges that the County denied it the ability to pave some Airport property adjacentto JetAway's off-Airport hangar. JetAway stated that it wanted to:
pave a ramp

area for parking and moving

aircraft. Someofthe aircraft would be parked insidethe hangar,as they had been with the County'sknowledge, consent and encouragement

sinceDecember

2004. And some

pilots andpassengers

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 unreasonableand 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 Courtfound otherwise andterminated

JetAway'sLand Lease. But also, JetAway admits this in its pleadings,

stating undercount 10,"The County has recently

placedunreasonable

and unnecessary restrictions

on JetA way's ability to conduct

any business."

[FAA Exhibit 1, Item 1,p. 55]
Page48 of 50FAA DocketNo. 16-08-01 Director's Detemrination

Countll: The Countyhas refused to negotiate

with Jet4wayin goodfauhfor the lease of available

premises for an FRO
In its last count, JetAway summarizes

its grievances,

examined

above, and styles

themas 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 suchpremises. [FAA Exhibit 1, Item 1, p. 56]
JetA way argues

thatthe Countyis in violation of the FAA Orderbecause the Countyhas failed to negotiate

with JetAway

in goodfaith. As stated,

the FAA Order

doesnot impose obligationsupon

the sponsor. In its entire Complaint,

JetAway refers extensively

to the record

containing

evidence that the Countyhas, in fact, engaged JetAway in negotiations

to accommodate

JetAway's preferredlocationfor a second FBO on the Airport. For example, the recordincludes 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,

wasto simply state

thatthe County

wished to avoidthe legal, financial and technical obstacles associated

with the JetA

way location. Instead

of saying 'no,' to JetAway'spreferredlocationand issuing an RFP for the 9-acre

Site,the County

continued negotiating

in mediation. The evidence of the County's posture

during negotiations

more nearlydescribes

defensiveness

and concern,

than a lack of goodfaith. As stated above, the FAA sees

valid reasons

for the County's concerns and notes

thatthe County's grant assurances

allow it to limit, mitigate or eliminate the Off-Airport Agreement rights, in favor of its fully-on Airport tenants.
Issue5 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 thatthe Countyis 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 accessissues 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 makedecisions

that best serve the aeronautical interests of the public and

the interests

of the Airport as a going concern. Upon considemtion of the submissionsand 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

Page 50 of 50