UNITED STATES OF AMERICA FEDERAL AVIATION ADMINISTRATION WASHINGTON, D.C. McDonough Properties, L.L.C., ) M & R Holdings, L.L.C., ) Tri-D, L.L.C., and ) Col. Frank Barnett ) ) Docket No. 16-12-11 ) Complainants, ) ) v. ) ) City of Wetumpka, ) ) Respondent. ) )

COMPLAINANTS’ REPLY TO THE CITY’S ANSWER AND RESPONSE TO THE CITY’S MOTION TO DISMISS
Pursuant to 14 C.F.R. §§ 16.23(e) and 16.23(j) the Complainants hereby file their Reply to the City's Answer and Response to City’s Motion to Dismiss as follows: 1
The Complainants’ Reply is necessary to redirect the proceedings back to the issue of whether the City has violated its grant assurances. The City has muddied the waters by, among other tactics, attempting to justify the relocation of the Airport and casting dispersions on intentions and motives of the Complainants, when the issues to be adjudicated before the FAA are the City’s grant assurance violations. These violations include failing to make the Airport self-sustaining by imposing a financially irresponsible property lease term, reverter clause and escalation clause upon certain users that will

1 In a letter dated October 31, 2 012, the FAA extended the time for Comp lainants’ Reply until November 9, 2012.2 inevitably lead to the demise of the Airport, waste the important investment of the grant money paid to the City, and deny aviation users the use of this public airport. It is important to remember at this point that the Complainants are four very small businesses and individuals with very limited budgets. They strive daily to keep their businesses afloat and are seeking only fairness in the application of the laws, regulations and grant assurances that were designed to prevent discrimination against airport users and to promote fiscal responsibility by the City. The City’s seemingly endless coffers provided by taxes, grant money, and future potential casino taxation provide the City an overwhelming advantage over the Complainants and airport users. The Part 16 process at this point is the only arrow in the Complainants’ quiver to combat these forces. The Complainants seek only justice that will compel the Airport to use airport trust fund money in a responsible, non-discriminatory, and financially responsible manner. The City’s Answer casts the Complainants as causing the Airport’s problems and alleging that the Complainants are illegally withholding rents and not signing the City’s imposed leases. The Complainants are only exercising their legally entitled rights. Their lease status is that of holding over and the City has agreed to forego eviction proceedings until such time as the Part 16 complaint has been resolved. Complainants’ Exhibit C-73. Please note that the City filed for eviction immediately after they received the Part 16 Complaint, thereby questioning the true motives of the City and also costing the Complainant's thousands of dollars in legal fees. The City has further acquiesced in the Complainants’ legal status by ascertaining, at a time after the evictions were put in abeyance, that the Complainants had insurance required by the City. Id. The Complainants have proffered back rent while the Part 16 issue is being resolved and the3 City has refused. Id. Complainant McDonald has paid and the City has accepted rent payments through next month, so the City cannot claim that allComplainants’ statuses are illegal. Under Alabama law the holdover statuses are legal pending the resolution of the tenancies. In Alabama, the doctrine of independence of covenants continues to be followed, and as a consequence, the landlord has no right to possession of leased premises from the tenant merely because of a breach of the lease. The lease is considered part conveyance and part contract. Hicks v. Longfellow Dev. Co., 362 So.2d 219 (Ala. 1978) While the City’s pleadings and treatment of the Complainants do not reflect that it agrees with the Complainants’ characterization of their tenancy, it does show that the City is estopped from claiming in its Answer that the Complainants have no legal standing to occupy the property. Therefore, because the City withdrew the eviction proceedings and ascertained insurance requirements, it is hypocritical for the City’s counsel to now claim that Complainants’ status is illegal thereby casting dispersions on the motives and actions of the Complainants. It is positively without doubt that the Complainants intend to enter into a long-term lease agreement and offer back rent that the City has previously refused immediately after the FAA directed the City to comply with its grant assurances. Complaiants’ Exhibit C-28. Contrary to the assertions of the City the issues here are exactly identical to those found in U.S. Construction Corp. v. City of Pompano Beach, FAA Docket 16-00-14 (July 10, 2002) (Final Agency Decision) (“Pompano” ), Aff’d City of Pompano Beach v. FAA , 774 F.2d 1529 (1985), and the City has failed in its attempt to distinguish those cases and to deny the precedent. The City argues that Pompano held that short term leases were4 contrary to the grant assurances because it was not supported by the airport’s business plan and because the airport offered other tenants, but not the complainant, a long term lease. Yes, the Pompano airport’s business plan did correctly reference a lease term acceptable under the grant assurances when it stated, “ 

### The optimum length of the lease term depends 

### on the return on the capital investment received by the tenant making the improvements. The tenant will require a lease at least as long as the pay-back period for the capital investment with an additional number of years to fully depreciate the asset and make a profit.” Id. At page 7. However, the Pompano FAD did not limit the FAA’s inquiry solely to the airport’s compliance with its business plan; the FAA’s decision addressed the financial responsibility of the airport in offering fair leases in compliance with its grant assurances. This can be found in the FAD when the Associate Administrator wrote, “Consequently, the FAA is not persuaded by the Appellant's assertion that the cancellation clause ‘provides the public with assurances that capital expenditures and facility growth on Airpark property will be fiscally responsible in a manner which is compliant with its Federal obligations.” Id . at page 22. 

### The City is wrong in its interpretation of Pompano and the Complainants ask that the Director use Pompano as precedent in deciding this case. Pompano stands for the principle that lease terms must vary according to a tenant’s capital investment in order to comply with the grant assurances. When the City limits all lease terms (large hangar, Thangar, everyone) to one year, it is ignoring this principle and violating the grant assurance of self-sustainability. Moreover, T-hanger lessee's have little or no capital investment in their hangars. In addition the T-hanger leases do not have an automatic escalation clause. Complainants’ Exhibit C-79.5 

### Regarding the City’s argument on pages 22 through 24 of its Answer that GAAP principles do not apply because the gr ound lease is an operating lease and not a capitalized lease, the main thrust of the Complainants’ description of this violation remains valid. FAA Order 5190.6B provides that an airport sponsor offer for long term ground leases sufficient to allow the users to recapture his/her capital investment (arguably through accepted accounting rules such as IRS and/or GAAP rules) allowing for depreciation of improvements, in this case, over a 39 year period. Said depreciation schedule beings anew whenever a commercial building is sold to a new owner. In the case for McDonough, they still have 23 years (1996 - 39 = 23) left. To deny a user sufficient time to recapture his/her investment forecloses full utilization of the IRS and GAAP principals afforded airport investors. The City cannot use the excuse that it is relocating the airport to justify its violation of its grant assurances. First, there is no need for the City to increase or expand operations at the Airport. The City has not conducted any study or analysis whatsoever and it has not justified in its Answer, the needto expand or move the Airport. The City mayor and his council have unilaterally decided, for whatever personal reasons, to move the airport and have commissioned a study to determine howto expand or where to move the airport. The question, “Does the Airport need to be expanded or moved?” is conspicuously and blatantly absent in this whole process. Again, the mayor and council members simply decided that the airport required expansion or to be moved and then commission the Feasibility Study contained in the City’s exhibit 2 to do so. Even the Airport Authority Chairman questioned the appropriateness of conducting such a study when he sent the City Council a “letter . . . voicing strong opposition to this project and6 wondered if the council could have more time to study this from all sides and make a decision at a later date.” Complainants’ Exhibit C-76. On page 4 of the Answer the City states, "The City denies the allegation that All existing tenants have been required to sign the new standard one-year lease." It goes on to say the tenants were give the "opportunity" to sign the new standard one-year lease. All semantics aside, the bottom line here is if the users wished to remain on the airfield, they had no choice but sign the new one-year lease. Of particular interest is that while the City’s Answer discusses their motives for expanding or relocating the Airport, the evidence provides clearly that the City’s sole intention was to relocate the Airport. This can be seen in an e-mail dated March 18, 2011, from Matt Mims, the Project Manager for Garver, the City’s Consultant, to FAA ADO Specialist Kevin L. Morgan. In the e-mail Mr. Mims states, “Due to the proposed relocation of this airport, the leases on the existing airfield are likely going to a year to year format.” This clearly shows the City’s intention is to relocate the Airport as its only option, and it further shows the motive for the City to illegally terminate the lease renewals in order to reduce the lease terms to one year. It further shows the City’s intention to exempt Arrowhead Plastics from the City’s Rules and Regulations when Mr. Mims is advised to keep the Arrowhead property separate from other Airport land and not to apply the proposed Rules and Regulations to it. Id. This e-mail exchange from Mr. Mims to Mr. Morgan is further interesting in thatwhile the e-mail purports to apply non-discriminatory provisions towards the nonaviation user, Arrowhead Plastic Industries, the City had blatantly discriminated against its hangar tenants by renewing Arrowhead’s lease by City resolution on October 5, 2009,7 (See, City’s Exhibit 9) when it just the month before denied Complainant McDonald’s request to exercise its five-year renewal option. (See, Complainants’ Exhibit C-25). For the City to allow a non-aviation user performing a non-aviation function to renew its lease for five years and then deny an aviation use tenant the contractual right to renew its lease for more than a one-year period is blatant discrimination. On page 9 of its Answer the City alleges that the Complainant's are without standing to bring this Part 16 Complaint because they are "holdover" (unlawful detainer) tenants, without a possessory interest, and thus are barred from bringing this Complaint. In Alabama, the doctrine of independence of covenants continues to be followed, and as a consequence, the landlord has no right to possession of leased premises from the tenant merely because of a breach of the lease. The lease is consider part conveyance and part contract. Hicks v. Longfellow Dev. Co ., 362 So.2d 219 (Ala. 1978) Moreover, until such time as a landlord receives a Writ of Possession from a local court of competent jurisdiction in an eviction action, the right to possession remains with the tenant and all rights thereto. In addition, when the City dismissed its retaliatory eviction actions against the Complainant's pending the outcome of this Part 16 Complaint, they did so by agreement. Said agreement here acts as an affirmative defense to the City's allegation that the Complainant are without standing. There is no justification whatsoever for the City to undertake a study to determine where or if the Airport should be moved. The City has unilaterally made a decision that the Airport should be expanded (either by moving from its present location or by expanding at its present location). The City has disallowed participation in this process by8 the large hangar owners. 2City admits to only consulting ALDOT and the Jackson ADO in its determination to move the Airport. What it fails to disclose is the intimate involvement of the City's consultant Garver Engineering with both parties. More importantly, the City never consulted the airport users as is required under Grant Assurance 8, Consultation with Users. To suggest that the City's public City Council meetings provided adequate notice to users is without merit as evidenced by the Garver emails wherein the leases were approved by all parties behind closed doors and then implemented publically via City Ordinance 2011-15 in a matter of minutes. Here, the cake was baked and only after it was presented to the users were they afforded an opportunity to review the ingredients. Moreover, considering the small number of hangar owners present on the field, the City should have, had they been acting in good faith, conducted a meeting to consult with the users prior to the drafting process, but this was not done. The City states in its Answer on page 10 that the Muscle Shoals case stands for the proposition that a lease must contain specific provisions for renewal in order to have a valid renewal clause. This is not so. In the Muscle Shoalscase that the City cites, the court found that the language contained in the renewal clause contained "no specificity as to the terms and conditions of the lease to be made" and thus found it "void for uncertainty and therefore unenforceable." The court also laid out the elements necessary for a renewal provision to be certain and enforceable. Those elements were the "amount of rent, conditions, covenants and limitations open to future negotiation."

2 The City argues in its Answer that Complainants have chosen not to participate in Airport decisions; but the converse is true – the Airport has excluded pa rticipation by the Complainants in all of its meetings. For example at a meeting held in April 2012 by the City’s contractor, the head of the meeting “attempted to conclude the meeting without taking any questions fro m the public, but that di d not sit well with the majority of the pilots that use the airp ort.” Complainants’ Exhibit C-78, page 3.9 In the case of Col. Barnett, M&R Holding, LLC, and Tri-D's renewal clauses, their leases spelled out with great specificity the lease rate (current rent plus 5%), the term (5 years), whose option (the tenant's), all subject to the airport rules and minimum standards which may be "updated as needed." In these leases, the renewal provision leaves no other terms to be determined. In the case of McDonough Properties, LLC, the same applies except for the rental rate. However, this uniform rate is determined by the City in the minimum standards and airport rules, which McDonough's lease is subject to. For the City to suggest at this juncture that all ground lease holders at Wetumpka entered into their leases for only the initial rental term and that City never intended to allow renewals, although they have a very long history of doing exactly that - renewing leases, is tantamount to fraud. Moreover, for the City to suggest the they can arbitrarily and capriciously change ground leases at-will, ignoring legally binding contracts and Grant Assurances, is unconscionable. Regarding the lease renewal deficiencies that the City cites on page 10 of its Answer, and as for whether the Complainants have exercised their rights to renew their leases, Alabama case law suggests that three elements are considered by the court in determining whether or not a tenant intends to renew. The three elements are payment of rent, notice to renew, and continued possession, but all three are not necessary to effect a renewal. McIntyre v. Coker , 150 so.2d 20 (Ala. 1963) In McIntyre , the court found that while Coker failed to put the landlord on notice that he intended to renew, he continued to occupy the leasehold and pay rent, thus putting the landlord on notice that Coker intended to renew.10 In the case of the Complainants, each had a slightly different experience. In M&R Holding's case, their lease renews in the summer of 2013. In Col. Barnett's case, he provided written notice of his intent to renew and the continued to inquire with the City, as they acknowledged in their answer, what his new rental rate was going to be so that he could pay it. Moreover, he remained in possession of his leasehold. Based on McIntyre , Col. Barnett's lease should be renewed. As for Tri-D, they tried to pay their rent, but it was rejected and they remained in possession of their leasehold. Again, under the authority of McIntyre , their actions were tantamount to renewal. As for McDonough Properties, LLC, they too tried to pay their rent, but it was rejected. They provided notice in 2007 of their intent to renew and they remained in possession of their leasehold. Pursuant to McIntyre , their actions would constitute a renewal. Conspicuously absent from any reasoning in its Answer is the decision process for moving or expanding the Airport – it is simply assumed that the Airport needs to be moved or expanded. And the City then jumps to the conclusion that $150,000 of the taxpayers’ money needs to be wasted on such a study. The City’s Counsel makes a cursory attempt at justification through a non-analytical conclusion that the Airport is the forth busiest airport in the State of Alabama. What Counsel left out however, is that the Airport is only eleven miles from the city of Montgomery, Alabama, whose population is 205,764 3 and is served by Montgomery Regional Airport consisting of a 9,010 foot runway and a 4,010 foot runway with 11,685 air taxi and air carrier operations per year.

3 According to the 2010 Census.11 Complainants’ Exhibit C-75. Any effort to expand or move the Wetumpka Airport would result in a futile and failed attempt to compete with the Montgomery Regional Airport. The City has failed to understand that its Airport is vitally necessary to provide a segment of the aviation users with a refuge and alternative of the high prices and congestion of the Montgomery Regional Airport. The record is replete with evidence of small commercial operators and private aircraft owners being pushed out of the Montgomery Airport and relocating to the less costly and quieter environment of the Wetumpka Airport. Now the mayor and council members want to force these airport sustaining users out of the Wetumpka Airport with visions of filling the relocated airport space with larger, noisier, more polluting and more expensive aircraft. It won’t happen because the Montgomery Regional Airport already has taken up that niche. Likewise, the Prattville Airport is also only eleven miles from Wetumpka and it has a 5,400 foot runway. It is utterly ridiculous to think that Wetumpka needs a larger airport when these nearby facilities will more than adequately serve the commercial aviation needs of Wetumpka. What Wetumpka needs is to keep its general aviation airport small so that small aircraft owners and operators who are being pushed out of Montgomery have an economical place to keep their small aircraft. Bigger is not better and, especially in this case, to upscale and supersize the Airport to suit the whims and aspirations of these politicians is contrary to the wishes of the aviation community and contrary to the grant assurances signed by the City. The City Counsel’s argument is factually incorrect when its attempts to justify the expansion of the Airport’s runways. The City is wrong in claiming that certain aircraft cannot use the airport. Counsel asserts that the Beechcraft KingAir C90 does not have12 balanced field length to use the Airport’s existing runways. First, balanced field length is not required for KingAir C90 operations into and out of the Airport. Presently the FAA allows, and aircraft owners operate, KingAir C90 aircraft at the Airport and such operations are taking place on a regular basis. Balanced field length operation is required by the FAA only if an operator wants to use a KingAir C90 for commercial operations at the Airport. See, 14 CFR §§121.189, 135.385. However, the Airport does not have any Part 135 or Part 121 commercial operations conducted at the airport. Complainants’ Exhibit C-47. The King Air C-90GTx take off field length at maximum take off weight is 2,552 feet. The landing field length is 2,363 feet at maximum landing weight. Complainants’ Exhibit C-77. These distances are within the present runway length at the Wetumpka Airport. The fact that high performance turbo-prop and jet aircraft do not have balanced field length is not an excuse to lengthen or relocate the runways. The Wetumpka Airport and 24 other airports out of the total of 67 general aviation airports in Alabama have runways of less than 4000 feet. These 25 airports adequately serve the segment of light aircraft needing less than 4000 feet of runway to operate. Such operation is safe at these “small” runways and certainly do not conflict with air carrier flights such as the 11, 685 operations that occur annually at the Montgomery Regional Airport just 14 miles to the south. Complainants’ exhibit C-73. It is difficult to fathom how the City’s Counsel can argue that the Airport feasibility study will not cost the Alabama and federal taxpayers any money because it was already apportioned for such use. This attitude has forced our Nation into a 6 trillion dollar deficit and it will certainly add to the financial woes we are all faced with. This reckless spending by a few politicians with self serving interests is not good for the13 people of Wetumpka, the County of Elmore, or our Nation. The City praises itself saying that it continues to maintain the physical integrity of public aeronautical facilities citing a 2011 ALDOT inspection finding full compliance. This ALDOT inspection also incorrectly found that the City was using all of its property for aeronautical purposes, which it is not. 4The City has not maintained the physical integrity of the Airport but is wasting the public funds entrusted to the City politicians as cited in the numerous examples in the Complaint and Reply. The City argues in its Answer that it is entitled to conduct the feasibility study and that long term leases prevent the City from moving the airport. When confronted with the fact that the City wants to move the airport, the City Mayor contradicts himself by saying, “Why would we put money into the airport if we were going to close it or move it?” Complainants Exhibit C-78. The City argued in its Answer that it has attempted to provide uniform short leases to its tenants, ostensibly to avoid appearing discriminatory, but in this it has failed. First, as stated above, notwithstanding the City’s argument that it offered one-year leases to all, the very fact that it offered such short term leases violates the self-sustainability assurance by which the City is bound. Next, if the Director were to examine the discrimination violation the Complainants are certain that he would find that the City did not apply the one-year leases evenly across all of its tenants who were similarly situated. Despite the fact that the ADO sided with the City in concluding that it was uniform in the

4City’s Exhibit 19 at page 13 (Sec tion 9) states that the standards for use of airport property for other than the operation of aircraft sh all be deemed a non-aeronautical activity and is prohibited. The report found no evidence of prohibited activ ity. However, the City leases more than 30 acres of airport property to Arrowhead for non-aeronautical purposes. The ALDOT study is conspicuously silent regarding the Arrowhead lease and is certainly in error whenit says there is no prohibited activity.14 application of its leases, it was not. Complainants’ Exhibit C-71. As stated below, the City allowed Arrowhead Plastics, a non-aviation industry, to renew its lease for 5 years at the very time that the City denied Complainant McDonald the right to renew his lease for five years. The City denied that it offered leases with longer terms after the Ordinance 2011-15 was adopted. 5 The facts are that the City began indiscriminately imposing shorter term leases on the Complainants as early as the middle of 2009. See, Complainants’ exhibit C-25. The City says that the one-year lease is needed during this three year period to conduct the feasibility study. Answer, page 2. It says that the one-year lease period will not stifle growth and/or development at the airport. Answer, page 25. However, it also says that it will not grant any building or improvement permits during the pendency of the Feasibility Study. Answer, page 8. This hypocritical rhetoric of the City clearly shows that its true objective is to illegally terminate and/or refuse to renew leases so that it can relocate the airport without having to pay its large hangar owners compensation for the loss of use of their hangars. The City’s Answer contains many references saying that it cannot treat the largehangar tenants differently than other airport users else it would risk violating the antidiscrimination grant assurances. On page 20 of the Answer the City says that it will offer no tenants leases for longer than a one year period. However, The new one-year lease is not equitable as the City suggests. First, it was "offered" without negotiation,

5 Nowhere in the Complaint is it alleg ed that the City began its discriminatory practices coincidental with the adoption of City Ordinance 20 11-15. In fact, on page 33 of the Complaint it is specifically alleged that Arrowhead was granted a five-year renewal at the time that Complainants’ request for renewal was denied.15 without consideration for the Complainant's investment, and with a punitive reverter provision. A take it or leave it proposition. Second, this policy violates the principles set forth in the FAA Airport Compliance Manual when it states that terms may vary according to the types of tenants involved. See, e.g., FAA Order 5190.6B, par 9.1.a. It's now clear that the City intends to r elocate the airport and in the process, not pay the Complainants for their improvements and at a convenient time, not renew the subject leases and tax the Complainants with removal of their buildings at unconscionable expense. The new lease imposed by the City has a reverter clause that will confiscate tenant’s property at the end of the short one-year lease. The City says on page 8 of its Answer that it does not foresee acting on its reversionary interest anytime in the foreseeable future, but that is not guaranteed. The Complainants risk that any new improvement such as a costly expansion of a hangar after January 1, 2012 will cause that hangar to revert to the City at the end of the one year lease. Again, such measures will not sustain a viable and financial responsible airport, but will deter responsible investors and tenants, which will result in a crippled and dysfunctional entity which violates the City’s public trust of an airport that is part of the National Airspace System and the beneficiary of DOT/FAA funding and grants which are to benefit the flying public. The City says in its Answer on page 8 that the escalation clause is standard since 2003 and is included on advice from the FAA. Such a one-sided and unconscionable term is not advised by the FAA. To the contrary, FAA Order 5190.6B cites an example in Appendix O as follows: “Ground rent shall be negotiated or16 escalated each year by an amount equal to the federal consumer price index.” The Complainants’ existing leases contained the terms at paragraph 1, “During this lease term, at the end of each five-year period, the Lessor has the option of negotiating the lease rate. Any rate adjustment, either up or down, shall be bases on the economic trends of the General Aviation Industry.” Such provisions are certainly more reasonable that the escalation provisions forced upon the tenants in the New Standard Lease, and are more in line with the language recommended by the FAA. Regarding the negotiation events described on page 11 of the City’s Answer, McDonough Properties, LLC was initially denied the right to negotiate their lease and only upon concern that a Part 13 Complaint would be filed, did the City inter into good-faith negotiations. The City argues on page 4 of its Answer that a one-year lease is reasonable. But this flies in the face of reason. The FAA is correct in its analysis that lease terms should be reasonable and not restricted to a set number for all cases. When an FAA ADO employee reviews a proposed lease for compliance they must ask the question, “Does the term exceed a period of years that is reasonably necessary to amortize a tenant’s investment?” This requirement is found in FAA Order 5190.6B at page 12-3. The City criticizes on page 20 of the Answer the Complainants for not divulging more information between the Complainants and their banks. It even suggests that the bank letters are suspect. First, if the City suspects fraud in the pleadings it should file the appropriate pleadings to challenge the suspected fraud rather than use these innuendos in its footnotes. The letters are genuine, they were written by the Complainants’ bank officers, and for the City to accuse the17 Complainants of suspect activity is at the least unprofessional. The City suggests that the Complainants are not credit worthy individuals. And while it is true several factors go into a bank's decision to lend money, the Complainant's hold substantial assets e.g. building and airplanes etc.... Moreover, their attorney's fees in this matter are not insignificant. Thus, the underlying security or the subject leaseholds are paramount from a bank's perspective. A one-year lease does not provide adequate time for a lender, if they had to foreclose on a hangar, to re-let the building in an effort to mitigate their losses as they are required to do. Moreover, a prospective purchaser of these businesses would in all likelihood be similarly declined. The City argues on page 13 that Housing Authority v. Durr requires that the landlord cannot continue to accept rent and simultaneously maintain an action for unlaw possession. A complete reading of the case shows that true only when the lease has a forbearance clause. The Airport ground leases do not contain such a clause. The City hides behind its argument on page 4 of its Answer that the FAA, Alabama DOT and the City’s consultant engineers all have recommended that the City impose one year leases with reverter clauses and drastic escalation clauses. This is simply not true. The FAA Jackson ADO had initially determined that 10-year leases should be acceptable. When Mr. Keifer Grimes sent the City on September 9, 2011, the ADO’s determination on the initial Part 13 complaint, the ADO stated, in part, “[The ADO] received an email from Mr. Ramsey indicating that the remaining issues [lease term and forfeiture clause] still had not been resolved. Mr. Ramsey (sic) email also contained other issues that FAA do not consider appropriate for a land lease agreement.” The letter went on to state, “FAA grant assurances allow airport18 owner to enter into lease agreements that allow owners that invest significant funds, time to recoup their investment, or to finance their investment. The lease term usually starts with the initial construction. . . . As an example, if a tenant builds a hangar with a 25 year term to recoup investment, then the airport owner usually gives a low rent ground lease during this time period. . . . If the original tenant sold his lease hold to a new tenant after a 10 year period, then the low rent lease term of the new owner would be only 15 years.” As set forth in our Complaint, McDonough has 17 years remaining as the new owner acquiring the original construction. The New Standard Lease denies McDonough this opportunity, is contrary to the ADO’s September 9, 2011 determination and contrary to the provisions of FAA Order 5190.6B at page
12-3. Therefore, even if the City were justified in moving the airport it does not need to implement draconian measures of unconscionably reducing the lease term from 10 years to one year, imposing confiscating reverter provisions, and unreasonable escalation of

rent.

COMPLAINANTS’ RESPONSE TO CITY’S MOTION TO DISMISS The City sets forth in pages 18 through 43 an argument styled “Motion to Dismiss” although it appears to also be the substance of its Answer. Insofar as the City’s “Motion to Dismiss” constitutes its Answer, the Complainants’ foregoing Reply constitutes their Response to the Motion to Dismiss.19 However, in further response to the Motion to Dismiss the Complainants offer the following. The Rules of Practice for Federally-Assisted Airport Enforcement Proceedings provide that a complaint may be dismissed for one or more procedural deficiencies. Rule 16.21 provides that a Complainant must have attempted informal resolution of the issues before filing a complaint under Part 16. The Complainants have filed not one, but two, informal complaints under Part 13 with the Jackson MS ADO in this matter. One informal complaint resulted in a favorable determination for the Complainants and the latter unfavorable. The City does not dispute that the Complainants have met the procedural requirement set forth in rule 16.21 prior to the filing of their Part 16 complaint. Rule 16.23 provides the procedural requirements that, among others, the Complaint shall “provide a concise but complete statement of the facts relied upon to substantiate each allegation.” It appears that this requirement set forth in rule 16.23(b)(3) is that with which the City takes issue. See, Answer at page 18, 8 thline. The Rules go on to state that the Director will dismiss the complaint within 20 days after receiving it if the complaint is deficient as to one or more of the requirements set forth in section 16.23(b). Rule 16.25(b) further states that the complaint will be dismissed if the complaint “On its face it does not state a claim that warrants an investigation or further action by the FAA.” The Director has not dismissed this complaint within 20 days of its receipt under rules 16.25 or 16.27 thereby leaving the conclusion that this complaint does meet the requirements of sections 16.23(b)(3) and 16.25(b), contrary to the allegations of the City. The City has generally accepted the facts as set forth in the Complaint and has not disputed these facts. (See, Answer, page 3, 1 st line, stating, “[T]he City generally admits20 the factual allegations asserted in Sec tions 1, 3-4, and 9-12 of the Complaint except as noted below.”). It is disingenuous at the least for the City to now say in its Motion to Dismiss that the facts as pled in the Complaint do not “meet the legal standard for bringing the allegation.” Id. , page 18, line 6. The Complaint “provide(s) a concise but complete statement of the facts” and these facts are generally accepted and are not disputed by the City. It appears that the City’s theory of its Motion to Dismiss is that the facts as pled by the Complainants do not result in violations of the grant assurances. As such the City is barred through estoppel from arguing that the facts are not concise and complete. As to whether the facts support each allegation is not a matter of law but a conclusion to be made by the trier of fact. The argument presented by the City in its Motion that “the allegations are (not) supported by a preponderance of the substantial and realiable evidence” go to the merits of the case and not the procedural aspects of the case requiring dismissal under rules 16.23(b)(3) or 16.25(b). Accordingly, the Motion to Dismiss should be denied and the case allowed to go on to a dispositive conclusion allowed under Rule 16.31.

CONCLUSION The City says that it would like to resolve its differences with the Complainants but cannot do so on terms resulting in preferential treatment of the Complainants. The Complainants do not ask for preferential treatment. Preferential treatment is the very violation committed by the City that the Complainants seek to remedy. The Complainants ask that the City construct the leases in a manner that is fair and equitable, and that is in21 compliance with the laws, regulations and grant assurances. Accordingly the lease term should be for a period of years that is reasonably necessary to amortize a tenant’s investment. (FAA Order 5190.6B at page 12-3). And Complainants realize that the lease term will not be exactly the same for all tenants. For example, T-hangar tenants who have not made an investment in their hangars may not need a lease term of 10 years. But, conversely, it is not fair to impose a one-year lease term on the nine tenants who have made a substantial investment in the construction or improvement of a hangar and will risk losing the hangar at the end of the City’s one-year lease. Of course the Complainants are “not happy” (as alleged by the City) with the City’s decision to impose these one-year lease terms, but notwithstanding, the Complainants’ objective in this matter is to bring the City’s non-compliance to the attention of the FAA through this Part 16 process. It has nothing to do with being “happy” or “not happy” about their situation; it is the responsibility of the Complainants, as airport users and contributors to the airport trust fund, to bring to light violations committed by the City in this regard. And to finally emphasize the single issue alleged by the Complainants and denied by the City – the City does not need to “temporarily limit the length of the new leases and lease extension while the city conducts a strategic assessment of the future of the Airport.” City’s Answer at page 2, line 2. Even if the FAA finds that the City is correct in spending trust fund dollars to conduct a feasibility study to move the airport, the City could offer a long term lease to the large hangar owners that would comply with its grant assurances. The City’s narrow approach to think that the one-year leases are the only mechanism compatible with relocating an airport is short sighted. First, if airport relocation were to occur it would take place at the very minimum five years from now. If22 the City were to offer a five-year lease without reverter or escalation clauses to the Complainants now it would certainly be within the requirements of its grant assurances. If one were to believe that the City could conduct its feasibility study, hire relocation engineers and specialists, conduct environmental studies, release the grant assurances for the old airport, obtain grant money for the new airport, construct a runway, install and commission airport lighting systems, and construct new facilities, and then decommission and move the airport with that five years, there are lease relocations provisions that could be written to comply with the grant assurances. Such lease terms would provide “for a period of years that is reasonably necessary to amortize a tenant’s investment” at the new location that would allow a tenant to relocate his/her old hangar to the new location or to build a new hangar and decommission the old hangar. The City has for whatever reason locked into the option that it needs to have one-year leases to make a clean break to relocate the Airport when there are other options that would comply with the grant

assurances. In conclusion, the Complaints respectfully request that the Director look past the City’s excuse for illegally limiting the terms of its property leases to large hangar owners and require the City to abide by its grant assurances to make the Airport as self sustaining as possible under these circumstances and retain a reliable source of rental income from the large hangar owners. WHEREFORE, Complainants hereby request that the Director deny the City’s Motion to Dismiss. FURTHER, the Complainants respectfully request that the Director issue an order finding the City in noncompliance with the Grant Assurances and directing the City to25 UNITED STATES OF AMERICA FEDERAL AVIATION ADMINISTRATION WASHINGTON, D.C. McDonough Properties, L.L.C., ) M & R Holdings, L.L.C., ) Tri-D, L.L.C., and ) Col. Frank Barnett ) ) Docket No. 16-12-11 ) Complainants, ) ) v. ) ) City of Wetumpka, ) ) Respondent. ) )

COMPLAINANTS’ AMENDED EXHIBIT LIST C-1 Swindle lease 9-25-1992 C-2 McDonough’s legal with airport diagram C-3 Kemp’s Lease 6-16-2003 C-4 City Council Minutes Approving - Kemp and Curenton Leases 6-16-2003 C-5 Ramsey to McCollom letter 6-18-2003 C-6 Whorton to Ramsey letter 3-13-2006 C-7 Ramsey to Whorton letter 3-15-2006 C-8 Whorton to Ramsey letter 3-16-2006 C-9 Barnett lease 4-10-2007 C-10 Howard to Ramsey letter 7-30-2007 C-11 Ramsey to Howard letter 8-17-2007 C-12 Howard to Ramsey letter 8-22-2007 C-13 Howard to Ramsey letter 9-19-2007 C-14 Ramsey to Howard letter 9-24-2007 C-15 Howard to Ramsey letter 9-26-2007 C-16 Howard to Ramsey letter 9-28-2007 C-17 Ramsey to Howard letter 9-30-2007 C-18 Ramsey to Howard letter 10-1-2007 C-19 Ramsey to Howard letter 12-2-2007 C-20 Howard to Ramsey letter 12-17-2007 C-21 Ramsey to Grimes letter 12-19-2007 C-22 Ramsey to Howard letter 12-19-2007 C-23 2007 Proposed Lease C-24 2007 Lease Rules & Regs26 C-25 Letter to City 11-11-2009 C-26 Barnett to Whorton letter 10-3-2010 C-27 Grimes to Ramsey letter 7-22-2011 C-28 Grimes to Whorton letter 9-9-2011 C-29 Edwards to Ramsey letter 12-21-2011 C-30 Airport Minimum Standards 12-2011 C-31 City Ordinance 12-2011 C-32 Standard Lease Agreement 12-2011 C-33 Ramsey to Edwards 1-24-2012 C-34 Edwards to Tri-D 1-25-2012 C-35 Whorton to Tri-D 1-26-2012 C-36 Edwards to Ramsey letter 1-27-2012 C-37 Ramsey to Edwards letter 2-3-2012 C-38 Tri-D letter from City - rejecting backpayment 2-13-2012 C-39 e-mail exchange Ramsey and Edwards 2-27 to 3-13-2012 C-40 e-mail Edwards to Ramsey 3-2-2012 C-41 Whorton to Ramsey letter 3-2-2012 C-42 Return of Rent to City 3-23-2012 C-43 Ramsey to Black letter 5-12-2012 C-44 City of Wetumpka - Council Minutes 7-2-2012 C-45 Tri-D- Old Lease 8-7-2007 C-46 Wetumpka – Part 13.1 Complaint v2 C-47 Wetumpka Airport FAA Form 5010 C-48 Wetumpka Rebuttal - 6-12-12-Final C-49 Wetumpka Rebuttal 6-12-12 w-Exhibits A-C& L C-50 Wetumpka Rebuttal 6-12-12- Exhibits-Final C-51 Wetumpka -City’s Response to Part 13.1 - 5-24-12 C-52 Wetumpka -Part13 FAA Response C-53 Airport Sponsor Assurances 2012 C-54 Civil Aircraft N76826 registration C-55 Civil Aircraft N25CG registration C-56 Civil Aircraft N3089B registration C-57 Civil Aircraft N8149A registration C-58 Civil Aircraft N6518U registration C-59 David H. Ramsey Affidavit C-60 Wetumpka Municipal Airport Map C-61 Shelby County, Alabama, lease example C-62 Tallassee, Alabama, lease example C-63 FASB Rules C-64 Wetumpka Airport FAA Grant History C-65 McDonough bank letter C-66 Air Evac Lease C-67 Barnett Bank letter. C-68 Edwards e-mail to Ramsey 8-10-2012 C-69 Airport Quitclaim Deeds C-70 Curenton Alabama Business Entity Details27 C-71 Mims email to Morgan 3-18-2011 C-72 City Eviction Withdrawal 9-24-12 C-73 Edwards email to Veatch 9-12-12 C-74 AirNav MGM Airport information C-75 FAA Form 5010 MGM C-76 $100K to Study Wetumpka Airport Relocation C-77 Beechcraft King Air C-90GTx Specifications C-78 Press Clippings, Wetumpka Rebuttal 11-8-12 C-79 Wetumpka City lease for T-Hangars