www.pillsburylaw.com 404666227v5 Kenneth P. Quinn

Partner

tel 202.663.8898 kenneth.quinn@pillsburylaw.com Pillsbury Winthrop Shaw Pittman LLP 2300 N Street, NW | Washington, DC 20037

- 1122 | tel 202.663.8000 | fax 202.663.8007

July 24, 2014

The Honorable Michael P. Huerta

Administrator

Federal Aviation Administration 800 Independence Avenue SW Washington, DC 20591

Re: Docket No. FAA

- 2014

- 0134 June 25, 2014 Public Meeting for Proposal to Consider the Impact of One Engine Inoperative (OEI) Procedures in Part 77 Hazard Determinations

Dear Administrator:

On behalf of The Real Estate Roundtable, the U.S. Chamber of Commerce

, Building Owners and Managers Association International, National Association of Real Estate Investment Trusts, National Association of Home Builders, International Council of Shopping Centers, National Multifamily Housing Council, National Apartment Association, National Association of REALTORS ® , NAIOP,

and the Commercial Real Estate Development Association

, 1 we are writing to

1 The Real Estate Roundtable’s diverse membership includes real estate owners (public and private),

asset managers, financial services (i.e., banks and insurers) and other real estate trade associations. The U.S. Chamber of Commerce is the world’s largest business organization representing interests of more than 3 million businesses of all sizes, sectors and regions, whose m embers include mom

and

- pop shops and local chambers to leading industry associations and large corporations. The Building Owners and Managers Association (“BOMA”) International is a federation that includes 93 BOMA U.S. associations, representing the owners and managers of all commercial property types.

The Na tional Association of Real Estate Investment Trusts is the representative voice for real estate investment trusts and publicly traded real estate companies with an interest in U.S. real estate and capital markets. The National Association of Home Builders is a trade federation of more than 800 state and local home builders associations and represents more than 140,000 home building, remodeling, sales and marketing, financing, and manufacturing members. The International Council of Shopping Centers is the premier global trade association of the shopping center industry with over (... continued)The Honorable Michael P. Huerta July 24, 2014 Page 2

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express serious concerns regarding the “public meeting” conducted in connection with the FAA’s proposed policy change regarding consideration of One Engine Inoperative (“OEI”) procedures into Part 77 hazard determinations. 2

The “public meeting” was unlike other recent FAA public meetings on policy clarifications. It provided no meaningful opportunity for interested stakeholders to: (i) unders tand the basis and purpose of FAA’s proposed actions, (ii) find out how it might impact current and future real estate development; (iii) raise questions or seek clarification on the scope of the proposed policy; or (iv) engage in any dialogue

with the FAA officials. We request that the FAA hold a second, in

- person public meeting on the OEI proposed policy clarification to provide meaningful public participation.

As you are well aware, the FAA’s Proposed Policy is one that is of significant

concern to loca l stakeholders and Congress. 3 To date, over 100 comments have

(... continued)

63,000 global members. The National Multifamily Housing Council is the apartment industry’s premier trade association. The National Apartment Association is a federation of over 1 70 state and local affiliates, has over 63,000 members and is the leading advocate for quality rental housing. The

National Association of REALTORS ® is the largest U.S. trade association, representing 1 million members comprised of residential and commerc ial REALTORS ® , who are brokers, salespeople, property managers, appraisers, counselors and others engaged in all aspects of the real estate industry. NAIOP, the Commercial Real Estate Development Association is the leading trade organization for developer s, owners and investors of office, industrial, retail and mixed

- used real

estate. This letter is supplemental to a separate comment letter filed by real estate organizations to the FAA, raising our concerns with the FAA’s process more generally in changing longstanding Part

77 criteria

. 2 Proposal To Consider the Impact of One Engine In operative Procedures in Obstruction Evaluation

Aeronautical Studies, 79 Fed. Reg. 23300 (Apr. 28, 2014).

3 Legislation has been introduced raising concerns over the FAA process for promulgating the

proposed policy. See H.R. 4623, 113th Congress, 2d Sessi on, introduced May 9, 2014. Several members of Congress have raised concerns regarding the on

- going policy change process. See Letter from Hon. Paul Gosar, Hon. David Schweikert, Hon. Matt Salmon, and Hon. Trent Franks, Members of Congress to Hon. Micha el P. Huerta, Administrator, U.S. Department of Transportation (July 14, 2014) (“[W]e urge the FAA to retract the proposed policy and instead engage in the open rulemaking process, subject to notice

- and

- comment under the Administrative Procedure Act with a full Office of Management and Budget cost

- benefit and federalism analysis under Executive Order 12866.”); H.R. Rep. No. 113

- 464 at 18 (2014) (“The Committee directs the FAA to “carefully consider all comments that are submitted on this proposed policy and to work with relevant stakeholders to preserve safety and efficiency while balancing the important needs of communities, airports and airport users. The Committee urges FAA to consider whether a cost benefit analysis (... continued)The Honorable Michael P. Huerta July 24, 2014 Page 3

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been submitted in the docket (prior to the deadline). We understand that over 500 individuals registered for the Public Meeting, and approximately 120 attendees logged into the online webinar that FAA billed as a public meeting. 4 Parties had a reasonable expectation that participation in the Public Meeting would be meaningful and interactive, and in accordance with the Notice, FAA past practice, and the Administrative Procedures Act (“APA”). 5 Yet, the Public Meeting was deficient in all of these respects.

First, the meeting was not conducted in accordance with the Notice, and more specifically:

• It did not give the public an opportunity to interactively participate in the FAA’s policy change , as suggested in the notice, which indicated the purpose of the meeting would be to “explain the proposal and respond to questions seeking clarification of the proposed policy. ” Instead, the Public Meeting was conducted through an online meeting tool and teleconference, 6 with no two

- way interaction capabilities.

• Unlike other recent public meetings that were scheduled for an entire day (twice), this OEI online webinar was scheduled for two (2) hours, 7 but started approximately fifteen (15) minutes late d ue to “technical complications,” included a twenty (20) minute break, and abruptly ended after one (1) hour

— in essence running for twenty

- five ( 25 ) minutes;

• The FAA “presentation” amounted to nineteen (1 9 ) brief slides, with no chance to orally ask questio ns;

(... continued)

should be required in the final polic y on obstruction evaluation aeronautical studies.”); Press Release, Rep. Moran Welcomes FAA Extension (June 9, 2014).

4 Attachment 1 includes a screen shot of the online meeting tool field showing the number of

attendees and participants.

5 5 U.S.C. § 551 et seq.

6 Proposal To Consider the Impact of One Engine Inoperative Procedures in Obstruction Evaluation

Aeronautical Studies, 79 Fed. Reg. 33145 (June 10, 2014) (Action: Proposed Policy; notice of public meeting and extension of comment period) (hereinaf ter “Public Meeting Notice”).

7 The Notice scheduled the Public Meeting from 2:00 PM to 4:00 PM. Public Meeting Notice at

33145. Although the FAA left the online meeting tool active after the presentation and question

and

- answer session ended, no further communication from the FAA was received.The Honorable Michael P. Huerta July 24, 2014 Page 4

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• Multiple attendees appeared under duplicate names in the online meeting tool; 8

• The online meeting tool was not interactive in any way;

• Participants could not view other questions submitted or confirm their questions had been received successfully;

• The FAA acknowledged receipt of approximately thirty

- five (35) questions, which could not be verified, and have still not been released; they refused to

answer all but fourteen ( 14 ) questions, then referred one

- half of those “addressed” by saying they will be addressed in the docket at some point; and

• The FAA did not acknowledge or answer all of the questions submitted by the

attendees. 9

Second, this Public Meeting was inconsistent with FAA’s past practices on public meetings in connection with policy changes. For example, the FAA held two public meetings to clarify the proposed policy for the registration of aircraft by non

- citizen trusts (NCTs). 10 There, the public meetings were scheduled for a full day, held in

person (allowing all attendees to see who atten ded and participated), attended by the FAA’s Chief Counsel and senior staff, allowed any attendee to speak in the microphone, and opened a discussion between the FAA and participants. 11

Third, the FAA has not furthered the aims of meaningful participation a nd informed

decision

- making by limiting interested parties’ ability to fully comment and respond to the Proposed Policy. 12 A reversal of nearly seven decades of agency practice in evaluating OEI warrants a full legislative

- type rulemaking, involving a

coor dinated impact analysis under Executive Order 12866 and the Office of Management and Budget (“OMB”), Office of Information and Regulatory Affairs

8 The screen shots included in Attachment 1 show multiple attendees under duplicate nam es.

9 Attachment 2 is a list of some questions submitted during the Public Meeting, most of which were

not answered by the FAA.

10 See Public Meeting: U.S. Registration of Aircraft in the Name of Owner Trustees, 76 Fed. Reg.

23353 (Apr. 26, 2011)

11 See Id.; Letter from Jeffrey Wool, Secretary General, Aviation Working Group, to Kathryn

Thomson, Chief Counsel, Fed. Aviation Admin. (Aug. 17, 2012).

12 Horsehead Res. Dev. Co., Inc. v. Browner , 16 F.3d 1246, 1268 (D.C. Cir. 1994).The Honorable Michael P. Huerta July 24, 2014 Page 5

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(“OIRA”). 13 In response to questions about why FAA believe it could make a fundamental change to a rule via a policy clarification, FAA officials simply stated that “we’ve determined we do not need to proceed via rulemaking change as we are just changing an internal agency order.” We believe not only that the proposed policy clarification is unwise and not justif ied (lacking any safety purpose), 14 but that the FAA must afford interested persons a meaningful opportunity to participate in the FAA’s rulemaking process. 15

In sum, we respectfully submit that the FAA should remedy the deficiencies in this

so

- called Public Meeting by holding a customary in

- person public meeting, as FAA has done many times before, to allow interested persons to participate meaningfully in the public process. Finally, we request that the FAA immediately release all the names of all reg istrants and participants in the Public Meeting, reveal all questions asked by participants, and provide a transcript of the meeting in the public docket.

Thank you for your consideration.

Sincerely,

Kenneth P. Quinn

CC: The Honorable Michael Whitaker, Deputy Administrator Jerry M. Mellody, Acting Chief Counsel Teri Bristol, Chief Operating Officer Eduardo Angeles, Associate Administrator for Airports

Enclosures

13 See Alaska Professional Hung ers Ass’n, Inc. v. Fed. Aviation Admin. , 177 F.3d 1030 (D.C. Cir.

1990); 1 Charles H. Koch, Jr. A DMINISTRATIVE L AW AND P ROCEDURE § 4:15 (3d ed. 2010); Exec. Order No. 12,866 (1993).

14 During the Public Meeting the FAA acknowledged that the Proposed Policy was not based upon any

safety issues.

15 1 Charles H. Koch, Jr., A DMINISTRATIVE L AW AND P ROCEDURE §§ 4:32

– 33 (2014).

# Attachment 1Meetingattendees 6-25.docx2

Meetingattendees 6-25.docx

# Attachment 2Questions for FAA Public Meeting – June 25, 2014

1. According to the FAA’s proposed One Engine Inoperative (“OEI”) Policy, “the FAA has held that [air carrier planning for One Engi ne Inoperative procedures] is an economic issue rather than a capacity issue.” To be clear, this is an economic issue, not a safety or capacity issue, right?

2. The Notice goes on to state that, “The last forty years have shown economic activity and structures only accelerating around airports—cre ating an ever increas ing risk.” I don’t know why you state this propositi on as if it’s a bad thing. Communities build airports to bring economic development. W hy is it now being condemned?

3. Cities value airports because they bring j obs and economic activity, yet the FAA proposal on OEI is designed to harm the very th ing cities are trying attract. Why?

4. What empirical data exists to support the F AA’s assertion that this is a real problem deserving of upsetting longstanding rules and interpretations?

5. The FAA claims that adding OEI procedures to Part 77 considerations will increase capacity for airlines. Has the FAA conducted any analysis to suppor t this conclusion?

6. Airlines often object to proj ects on the basis of OEI, but refuse to share their OEI procedures with the FAA or the public. How does the FAA propose to ensure that future OEI surfaces take into account the actual OEI pr ocedures of the airlin es? Will airlines be required to share their procedures?

7. OEI procedures are proprietary to airlines themselves, and are not shared publicly. Has the FAA reviewed this information in supporti ng its assertion that applying OEI to Part 77 will increase capacity?

8. I understand that airlines, wh ich already establish and abid e by OEI procedures for all flights, do not share the propr ietary calculations they us e publicly. How can the FAA proceed with this proposed change without th is information? Will stakeholders have access to this information as part of the pr ocess to develop OEI surfaces around airports?

9. Has the FAA conducted any empirical assessmen t of any kind regarding the potential economic impact on local communities and tax bases resulting from this proposed change?

10. Has the FAA consulted with communities in developing its proposed procedures? How

does it envision local communities and landowners will be involved in the process of establishing OEI surfaces?

11. I understand that FAA Part 77 determinati ons are valid for a limited 18 month period, with only one option for a single 18-m onth extension, provided no changes in circumstances exist at the time of the renewal. Because many local governments and planning agencies require determinations well in advance of construction, many developers rely on extensions to complete a pr oject. If an OEI policy is established for an airport prior to renewal, will the exte nsion be subject to the new OEI policy?Questions for FAA Public Meeting – June 25, 2014

12. As with extensions on single building proj ects, which could be impacted by the OEI policy, will the FAA take into consideration long range development projects – e.g. multi-building projects spanning 5-10 years – when developing OEI procedures at a given airport?

13. I understand that for over 70 years (since the beginning of Part 77), the FAA has not considered OEI procedures in Part 77. Given the significant change, isn’t the FAA required to amend Part 77 and go through a formal rulemaking process under the Administrative Procedure Act? If not, why?

14. I thought that if you wanted to change a rule, you had to do a rulemaking, not issue a policy clarification that upends 70 years of es tablished rules and inte rpretations. How is this possible?

15. The proposed policy says that each airport s hould develop OEI surfaces “with input from users/operators and communities” in coordina tion with the FAA, but then goes on to say that any airport experienci ng “encroachment” should work with its users during the Master Planning Process to propose a de dicated OEI surface on the ALP.

a. How will communities and landowners be incorporated into the process?

b. Once an OEI surface is developed, will it be revised/revisited from time to time to account for changes in airport/aircraft use?

c. What does the FAA mean by “encroachment” and at what point will “encroachment” support an OEI surface? Wh at safeguards are in place to protect local communities’ authority over land use planning?

16. The FAA says its new policy will “recognize the right of developers to erect structures near airports and air navigation facilities.” How will these rights be recognized?

17. As the FAA has acknowledged (and as has been confirmed by severa l courts), the FAA has no authority over local land use planni ng or zoning, yet the proposed policy would limit heights at which buildings near airports could be constructed based on airlines’ asserted needs and proprietary procedures. What is the FAA’s legal authority to influence this change?

18. In a congressional hearing before th e Aviation Subcommittee of the House Transportation and Infrastructure Committ ee on February 27, 2013, FAA Administrator Michael Huerta was asked how many OEI takeo ff incidents have resulted in fatal crashes in the past few years. He replied, “None have resulted in fatal crashes.” On what data, therefore, is the FAA’s assert ion that structures around airpor ts provide a “risk” to air navigation based?

19. Aircraft design changes continua lly, with more efficient and powerful aircraft continuing to enter service. How does the FAA propose to accommodate future aircraft designs (and associated OEI procedures, which will almost certainly be less restrictive) in theQuestions for FAA Public Meeting – June 25, 2014

proposed OEI procedures? If they are not ta ken into consideration, on what basis would the FAA continue to apply the more restrictive procedures?

20. Doesn’t the FAA’s incorporation of these OE I procedures discourage the development of more efficient aircraft designs? In othe r words, by shifting the economic burden of compliance with OEI from the airlines (whe re it has rested for decades) onto local communities, isn’t the FAA dis-incentivizing the development of more efficient aircraft?

21. I understand that the FAA has heard repeated concerns about the pl an, and the procedure by which it is implementing the plan, from a bipartisan group of lawmakers from across the country. Indeed, a bill (H.R. 4623) currently pending before the House of Representatives would require the FAA to proceed with its proposed changes via a rulemaking process. I further understand th at the FAA has heard repeatedly from a number of outside organizati ons and individual entities who are concerned about the proposed changes. Is the FAA aware of these concerns? What is the agency’s response

to these concerns?

22. Notwithstanding the significant policy change – which ordinarily would be subject to formal rulemaking, the FAA is proceeding by a “policy change” which carries no legal obligation to address or even consider the comments it receives in response to this Notice of Proposed Policy, correct? How will the F AA consider the comments it receives?

23. What studies has the FAA done to conclude th at efficiency is actually being impacted? At what airports? Which structures?

24. Given the potentially far-reaching impacts of the OEI policy, why isn’t the FAA conducting a cost-benefit analysis to a ssess the impacts of the policy on local communities? Surely the Office of Mana gement and Budget could easily assess the impacts of this proposed change.

25. It appears that the FAA has not conducted any analysis of th e impacts of this policy on local communities, despite its far-reaching effects. In the FAA’s absence, the Weitzman Group, a group of independent consultants a nd economists, has conducted such a study, and found that the proposed policy would aff ect thousands of buildings nationwide - which would, of course, have enormous ramifi cations for local tax bases and jobs. Has the FAA reviewed this study? What is the agency’s response to this study?

26. How is the FAA going to compensate us after taking away our investment-backed expectations for high-rise bu ildings? You could lop off w hole floors from a building and ruin the economics of that building—each fl oor taken away can represent millions of

dollars in revenue and rent lost. W ho is going to pay fo r all of this?

27. Does the Air Traffic Organization fully support this proposed change and deem it necessary, or is this being done at the behest of the F AA’s airports organization?

28. Doesn’t this constitute an assault on priv ate property by the Federal government? Has

there been a Federalism analysis of this proposal, and if so, by whom?Questions for FAA Public Meeting – June 25, 2014

29. I thought the Feds wished to stay away from causing conflic t with local zoning powers, but this seems designed to cause a Federal, State, and local government clash, and it is anti-economic development a nd anti-jobs. Why are you doi ng this? Where is the documented problem?

30. What are the next steps? How can we en sure that our voices are being heard?

31. Is air travel unsafe as a resu lt of the current OEI practice?

32. Can you quantify/explain what the economic benef its will be to airlin es if the policy is changed?

33. What has the FAA concluded the economic impa ct will be to local jurisdictions and property owners if the policy is changed?

34. Given the far-reaching economic impacts, why is the FAA not seeking a rulemaking to ensure all parties and intere sts are equally represented?