Benjamin H. Klein

L AW O FFICES OF P AUL A. L ANGE , LLC 80 Ferry Boulevard Stratford, CT 06615 Phone: (203) 375

- 7724 Fax: (203 ) 375

- 9397 bhk@lopal.com

UNITED STATES DEPARTMENT OF TRANSPORTATION FEDERAL AVIATION ADMINISTRATION

WASHINGTON, DC

Pro

- Flight Avia tion, Inc.

Complainant, v. Docket No. 16

- 15

- 03 City of Renton, Washington

Respondent. / PRO
- FLIGHT AVIATION, INC .’S ANSWER TO RESPON DENT’S MOTION

FOR SUMMARY JUDGMENT Complainant Pro

- Flight Aviation, Inc. (“PFA”), by and through the undersigned counsel, and pursuant to 14 C.F.R. § 16.26(c)(3) and the FAA’s May 1, 2015 Order granting an extension of time, hereby files this Answer to Respondent City of Renton, Washington’s (“City” or “Respondent”) Motion for Summary Judgment (“MSJ”), an d in support thereof, states as follows: INTRODUCTION In its Part 16 Complaint (“Complaint”), PFA alleges that Respondent violated several enumerated grant assurance obligations when it provided preferential treatment to the Boeing Company (“Boeing”) , a n on - aeronautical user of the Renton Municipal Airport (“RNT” or “Airport”), at the expense of PFA, a longtime aeronautical service provider at RNT. Specifically, PFA alleges that Respondent intentionally concealed from PFA that the 760 Parcel2

was available for leas e in order to ensure that Boeing was awarded the lease, even though the City was aware of PFA’s longstanding interest in the 760 Parcel, and its desire to use 760 for its flight training aircraft and transient aircraft parking. Respondent does not squarely deny the allegation that it concealed 760’s availability from PFA, and it does not offer any evidence to refute the timeframe asserted by PFA that unequivocally demonstrates that the City was negotiating with Boeing for the 760 Parcel while at the same ti me representing to PFA that it was not available. Instead, Respondent constructs a straw man and argues that both Boeing’s and PFA’s lease applications were considered, and that Boeing was chosen over PFA because: (1) PFA failed to include a feasibility st udy with it s application; and (2) Boeing’s proposed use of t he 760/770 Parcels better serves the interests of the flying public, the City of Renton, and the public at large. The first excuse offered by the City is nothing but pretext. Respondent’s letter notifying PFA that Boeing had been awarded the lease (which was sent before the City Council formally voted on the matter) makes no mention of a missing “feasibility study ” . In fact, Respondent said that it considered PFA’s proposal an “attractive one,” but that Boeing’s application “further[ed] the City’s goals.” Complaint, Ex. 10. Accordingly, the record evidence does not support the City’s claim that PFA’s application was denied because it was someho w deficient or otherwise lacked required inf

ormation

. To the contrary, the evidence supports PFA’s claim that it was never considered for the lease of the 760/770 Parcels, and that Boeing’s approval was a foregone conclusion. The City’s second justification for its actions

– that Boeing’s use of th e 760/770 Parcels better serves the interests of the flying public, the public in general, and the City of Renton

– is hard to square with what even Respondent acknowledges to be the primary purpose of a3

federally

- obligated airport. In the words of Respond ent, “the primary focus of a publically

funded airport must be to provide aeronautical services to the public.” MSJ at 17. RNT “is designated by the FAA as a reliever airport diverting general aviation aircraft traffic from nearby Sea

- Tac International Ai rport ("SEA"). MSJ at 6. What then is the basis for Respondent’s claim that Boeing’s lease of facilities designated for general aviation better “serves the interest of the flying public”? As a reading of the MSJ makes abundantly clear, Respondent justifi es its decision to mislead and discriminate against PFA on simple terms: Boeing is a valuable Airport tenant that provides $1.5 million in rent payments to RNT per year, allows the Airport to be self

- sustaining, and contributes greatly to the local economy . To be sure, PFA is not in a position t o dispute any of these claims. A federally

- obligated airport, however, does not exist to maximize city revenues or to serve as a source of job creation

– although these are certainly worthy attributes. A federally

- ob ligated airport exist s to serve the flying public. I n the case of RNT, that means general aviation aircraft and those who use and provide services in support of them. While it may be true that the flying public worldwide benefits from Boeing’s takeover o f RNT and its displacement of general aviation aircraft and service providers , the flying public that actually uses RNT, or seeks to use R NT, is harmed by it. Boeing utilizes the Airport essentially as a parking lot for 737s that are manufactured off airport . Not only is this not aeronautical activity as the FAA defines it , even assuming that it is , Boeing’s use of the Airport comes at the expense of general aviation operators and service providers

– the very segment o f the flying public that RNT, a SEA relie ver airport, was designed to serve. Because of Boeing’s activities, PFA, the operator of the sole, full service FBO at RNT has been deprived of sufficient space to house the aircraft it uses for flight training, and because4

there is no other suitab le spa ce currently available, PFA will be forced to choose be tween serving transient aircraft or continuing its flight training program. In addition, because Boeing continues to displace other aerona utical users of the Airport, many are con sidering relocating elsewhere , and many have already done so

. With decreasing users, aeronautical service providers such as PFA may not remain viable as ongoing business concerns. Even assuming that Boeing is enga ged in aeronautical activity (and it is not, see Section II.A , infra ), Respondent violated its grant assurance obligations when it unjustly discriminated against PFA during the lease application process for the 760/770 Parcels. As is detailed in the Compla int and also herein, Respondent actively misled PFA about the availability of the 760 Parcel in order to afford Boeing the opportunity to negotiate terms with the City and get a jump on the lease application process

– exactly the type of conduct that is pr ohibited even when two potential u sers are differently situated. In addition, Respondent violated its own leasing policies in its effort to underhandedly secure the Boeing lease. Respondent also violated Grant Assurance 29 , Airport Layout Master Plan, when it agreed to lease the 760/770 Parcels to Boeing. The ALP for RNT clearly designates the 760/770 Parcels for General Aviation (“GA”), and no amount of linguistic gymnastics by Respondent should convince the FAA that Boeing, a manufacturer of airline trans port aircraft, has anything to do with GA. If Boeing is found to be so engaged, the term GA will have lost its meaning. In acceding to Boeing’s every wish and command at RNT, Respondent, in violation of Grant Assurance 5, has given up its ri ghts and powers. It has allowed Boeing, in its sole discretion, to leave its leaseholds at the Airport idle and vacant , as Respondent has entered leases
perm i tting Boeing to bank space based on future, contingent need s .5

In sum, and as described more fully herein, PFA has alleged, and provided reliable and probative evidence proving Respondent’s grant assurance violations. Res pondent cannot and does not demonstrate that there is no genuine issue of material fact for adjudication, as required by 14 C.F.R. § 16.26( c ); accordingly, its Motion for Summary Judgment should be denied.
I. STATEMENT OF MATERIAL FACTS 14. C.F.R. § 16.26(c )(2) requires the movant to provide a “concise statement of material facts as to which the respondent contends there is no genuine issue of material fact.” Respondent quotes the standard for summary judgment correctly “no genuine issue of material fact,” but then misapplies it, merely alleging its own set of entirely irrelevant facts (e.g., the history of 737 manufacturing at RNT) , while at the same time ei ther ignoring or disputing the material facts alleged by PFA. Because there are still genuine issues of material fact in dispute, and because those facts that are undisputed support a finding of grant assurance violations, Respondent’s Motion for Summary Judgement should be denied.

A. Respondent Unjustly Discriminated Against PFA in Leasing the 760 /770 Parcel to Boeing The facts surrounding Respondent’s unfairly discriminatory treatment of PFA with regard
to the latter’s oft

- stated interest in leasing the 760 Parcel are stated in detail in the Complaint

. See general , Complaint ¶¶ 22

- 30, 43

- 54. The se facts include, but are not limited to the following:

 From 2011 through 2013, PFA’s management repeatedly expressed its interest in leasing the 760 Parcel, which is adjacent to PFA’s current leasehold, and which6 has been designated on the Airport Layout Plan for General Aviat ion. Complaint ¶ 22. 1

 The previous occupant of the 760 Parcel defaulted on its lease in or about April 2013, at which point PFA reit erated its interest to Airport management

. Complaint ¶ 23.

 On April 15, 2013, PFA wrote to Airport Manager Ryan Zulauf aski ng for a meeting concerning the 760 Pa rcel . Complai nt , Ex. #6a.

 Shortly thereafter, Mr. Zulauf stated, in response to PFA’s inquiry, that the 760 Parcel would not be available for lease until a storm drain pi pe could be replaced. Complaint ¶ 23. At no time during this period did Mr. Zulauf indicate to PFA that the Airport was engaged in lease negotiations with Boeing over the 760 /770 Parcel s . See Declaration of Bernard A. Paholke (“ Paholke Dec .”), ¶ 5 , attached hereto as Exhibit A.

 On April 17, 2013, Respo ndent sent Boeing a letter stating that the 760/770 Parcels were available for lease and Respondent met with Boeing on that same day to discuss the matter . At that meeting, Boeing reiterated its interest is securing the lea se for the 760/770 P arcels. Comp laint , Ex. 15, pg. 2

- 3.

1 Respondent states that “a search by RNT staff has not uncovered any subsequent written communiqué from PFA to the Airport” in the one and a half

- year period following PFA’s December 2011 email expressing interest in 760 (MSJ at 11), but also admits that it had “numerous discussions with PFA between 2011 and 2013 ab out its interest in leasing the 760 Parcel . MSJ at 4. Thus, the fact that PFA repeatedly expressed interes t in the 760 Parcel is not in dispute.7  By email dated April 18, 2013, Boeing said that it was securing internal approvals and hoped to begin lease discussions for those parcels “in the next 2

- 3 weeks.” Id

.

 Despite being aware of PFA’s longstanding interest in leasing the 760 Parcel, Respondent did not make PFA aware that the 760 Parcel was in fact available and that Boeing would be submitting an application for its lease. 2

 In early

- June 2013, PFA again inquired about the availability of the 760 Parcel. PFA was informed, for the first time, that the 760 Parcel was available, but that Boeing had already submitted a lease application for both it and the 770 Parcel

. PFA was also informed by Mr. Zulauf that the City had already decided to lease the space to Boeing , and he discouraged PFA from submitting an application

. Complaint ¶ 25 ; Paholke Dec . ¶ 6

.

 On June 6 , 2013 , PFA submit ted a lease application for the 760/770 Parcels. Complaint ¶ 26.

 On July 24, 2013, Respondent sent PFA a letter informing it that its application had been rejected in favor of Boei ng’s. Complaint ¶ 27 , Complaint, Ex. 10.

 On July 25, 2013, the Transportation Committee of the City Council met to

“ deliberate ” on decision that had clearly already been made. Complaint ¶ 28.

2 Subsequent to Respondent’s filing of the MSJ, PFA contacted Mr. Zulauf who is now an employee of the FAA, as it was surprised by some of the assertions contained in the MSJ, particularly those surrounding the timin g of the lease application process for the 760 /770 Parcel s . Mr. Zulauf stated that it was widely known by Respondent that PFA was interest ed in the 760 Parcel. Rather than provide a declaration with hearsay testimony, PFA respectfully submits that the FAA can corroborate the same and more if it interviews Mr. Zulauf in connection with an investigation conducted pursuant to 14 C.F.R. § 16.298  In an act of political theatre that merely carried out a foregone conclusion (as demonstrated by Respondent ’ s letter of July 24 th ) , the Tran sportation Committee voted to approve the Boeing lease application. Id

. PFA’s factual assertions in this regard unequivocally demonstrate that Respondent actively concealed from PFA th at the 760 Parcel was available for lease , that Boeing had submitted a l ease application before Respondent even acknowledged to PFA that the 760 Parcel was available , and that Respondent decided to grant Boeing the lease before its governing bodies had officially consi dered the competing applications . Respondent does not (because it cannot) di spute these allegations. Instead, Respondent glosses over the timing of PFA’s lease application process and the fact that: (1) the City had entered into lease discussions with Boeing while at the same time representing to PFA that the 760 Parcel was not ye t available for lease; and (2) Airport staff misled PFA about the timing of the availability of the 760 Parcel so that it could negotiate with Boeing and stall/prevent PFA fr om submitting a competing application. For example, Respondent disingenuously sta tes that “when the 760 Parcel became available in April of 2013, PFA learned it was vacant and entered into discussions with the Airport regarding its proposed use of the space.” MSJ at 11. However, it provides no evidence in support of the second part of this assertion (that in April 2013, PFA was in discussions with Respondent regarding its lease of the 760 Parcel) other than a cite to Exhibit 6b of the Complaint. Exhibit 6b is an April 15, 2013 , email from PFA to Airport Manager Zulauf, which reiterate s P FA’s interest in the 760 Parcel. This one

- sided e

- mail hardly proves , as the City appears to suggest, that Respondent was in “discussions” with PFA about the lease of the 760 Parcel in April 2013. In fact, the City did not respond to this email. Paholke D ec. ¶ 4 . Any actual9

“discussions” about the lease of the 760 Parcel that occurred in April 2013, were between Boeing and Respondent

– they did not involve PF A. Complaint, Ex. 15, pgs. 2

- 3; Paholke Dec. ¶ 5. Respondent does not even attempt to dispute the allegation that it misled PFA about the availability of the 760 Par cel; i t simply ignores it, suggesting that even if that were so, the FAA should pay such a detail no mind. See MSJ at 11. (“Notwithstanding claims in the Complaint that it was misled regard ing the actual time the property would be available for lease ...). Then, after conveniently sweeping this serious allegation under the rug (rendering it admitted, or in the light most favorable to the City, disputed, and thus inappropriate for resolut ion o n summary judgment), the City argues that all must have been above board since , in fa ct, PFA did end up submitting a lease application. MSJ at 11

- 12.
However, accepting the City’s contention that merely allowing PFA to apply for the 760 /770 Parcel s

– afte r PFA discovered, on its own, that Boeing had already applied

– proves that Respondent did not violate Grant Assurance 22 would render toothless the obligation not to unjustly discriminate against aeronautical ser vice providers at the Airport. The essentia l point is this: Boeing’s approval was a foregone conclusion before it even submitted its application, and it was provided preferential treatment in the application process, as evidenced by Respondent’s effort to keep PFA from submitting a competing applic ation as long as it could . When PFA nevertheless proved itself determined and submitted an application even after it was discouraged from doing so, Respondent simply rejected PFA’s application befo re City Council formally voted on the issue

– a violation o f Respondent ’ s own policies and procedures

. Additional evidence of Respondent’s unjustly discriminatory treatment of PFA can be found in the Airport’s violation of its own, self

- imposed leasing policies. Complaint ¶¶ 18

- 21, 46

- 50. Among others, PFA asserted that Respondent violated Section 6.13 of the Airport10

Leasing Policies, which states that “[o]versubscribed facilities will be managed using a process that is fair, transparent, and uniformly applied .” Complaint, Ex. 5, Section 6.13. Certainly, the facts as alleged demonstrate that the process for the lease of the 760/770 Parcels was not “fair, transparent, [or] uniformly applied.” Again, Respondent does not bother to dispute the fact that it ignored this and other provisions of its leasing policies when it came to the 760/770 Parcels. Instead, it argues that any such deviations cannot form the basis of a Part 16 claim. Indeed , Respondent all but admits that Boeing and PFA were treated differently, but claims that this is permissible given that the two

are n o t “similarly situated” users. MSJ at 29. While ignoring self

- imposed leasing policies may not, on its own, constitute a grant assurance violation , PFA has not alleged as much. Rather, PFA has pointed to the Airport’s complete disregard of its own leasing p olicies as evidence of Respondent’s discriminatory conduct and the preferential treatment accorded to Boeing at the expense of PFA. Respondent has submitted no evidence to contradict this allegation; it rests on the proposition that a violation of i ts leasing policies does not matter for the purposes of a Part 16 Complaint. In sum, the material facts as alleged by PFA surrounding Respondent’s unjustly discriminatory conduct toward PFA provide evidence to prove that PFA was never even considered by Re spondent for the lease of the 760/770 Parcels, and thus, unjustly discriminated against in favor of Boeing. PFA’s factual allegations in this regard, which are either disputed or undis puted in its favor, are more tha n sufficient to form the basis for a vio lation of Grant Assurance 22.11 B. General Aviation Is Being Displaced at RNT to Make Room for Boeing, a Non
- Aeronautical User PFA has alleged that the City has allowed Boeing to expand its leaseholds at the Airport, including in areas specifically designated for GA on the Airport Layout Master Plan (“ALP”), to the detriment of aeronautical users and service providers at RNT. Complaint ¶¶ 1, 55

- 60. For example, Boeing has entered into leases with the Airport for the 760/770 Parcels, and the City has indicated that it also intends to lease Boeing the 820 P arcel. Complaint ¶¶ 29, 30, 32; MSJ, Jacobsen Dec. ¶ 8. These parcels are designated for GA on the ALP, and are currently occupied by dozens of GA aircraft. Complaint Ex. 11 (ALP), Complaint ¶ 33. The latest ALP up date published by the Airport was in 2009 and was paid for, in part, by federal grants received through the Airport Improvement Program. Complaint ¶ 55. Respondent has stated that the needs of the aeronautical users of the Airport that are being displace d by Boeing can be accommodated elsewhere. MSJ at 12; Jacobson Dec. ¶ 5. This is disputed. See, e.g. , ¶¶ Complaint 1, 52, 53. Current aeronautical users of the 760/770/820 Parcels have stated that they will likely need to leave the Airport once Boeing dis places them as there will be insufficient space for GA aircraft tie

- down at RNT once the se parcels come under Boeing’s control

. See Declaration of Co l lin Klopfenstein, dated May 19, 2015 , attached hereto as Exhibit B ; Declaration of Stephen Kwan , dated May 19, 201 5, attached hereto as Exhibit C ; Declaration of Jay Falatko, dated May 15, 201 5, attached hereto as Exhibit D

. Airport Manager Jonathan Wilson has testified that these displaced users can move to tie

- downs located on the east side of the Airport. W ilson Dec. ¶ 26. This is disputed; the manager of the only area available for tie

- downs on the east side of the A irport has stated to PFA that they are full. Paholke Dec. ¶ 23

.12

Respondent alleges that there will be adequate space for transient aircraft parking after Boein g occupies the 760/770/820 Parcels. MSJ at 16. This is disputed. Complaint ¶ 33; Paholke
Dec . ¶¶ 12

- 13. The only remaining spots for transient aircraft (outside of PFA) are located on the 820 Parcel, which Respondent soon intends to lease to Boeing. Jaco bsen Dec. ¶ 8. In addition, PFA is the only location at RNT that accepts transient jet parking. Paholke Dec . ¶ 11

. If it is forced to move its flight training fleet back to its ramp on the 750 Parcel , PFA will not be able to accommodate any transient jet aircraft. Id

. Rainie r Flight Services, the entity that Respondent refers to as the other FBO at RNT does not offer parking for any transient aircraft or provide them with any services

. Id . ¶ 22

. Respondent has alleged that the alternative proposals it suggested to PFA provide suitable space from which it, and others, could provide aeronautical services. MSJ at 14

- 16. This is disputed. Paholke Dec . ¶¶ 14

- 18

. One such proposal, re

- purposing space on the Airport formally occupied by a restaurant, is admittedly not currently viab le. Jacobsen Dec. ¶ 8. This space is outside of the airport fe nce and unpaved . Moreover, Respondent has acknowledged that it would not be cost effective to spend the approximately $250,000 required to develop the space for 11 tiedowns. Paholke Dec . ¶ 18

. Another red herring offered by the City concerns the 820 Parcel. Although PFA does not believe that it is vi able ( or safe ) to ask its flight school students to walk across active ramps that are soon to be closed to the public by Boe ing in order to access trainin g aircraft, it is a moot point: Respondent has already agreed to lease the 820 Parcel to Boeing. Jacobsen Dec. ¶ 8. Respondent’s remaining defense to the assertion that GA is being displaced by Boeing’s
occupa tion of the 760/770/820 Parcels is that it a ccommodated aeronautical users “to the maximum extent possible,” by only offering Boeing a 7 year lease (5 year initial term, renewable13

for 2 years thereafter at Boeing’s discreti on). MSJ at 13. It is audacious to suggest that aeronautical users and servi ce providers are being accommodated to the “maximum extent possible” when they are being displaced for 7 years, during which time many users will likely leave RNT since there is no suitable alternative space , causing business es such as PFA to shutter. Resp ondent itself acknowledges the disruption to aeronautical users of the Airport in the preamble to Amendment No. 4 to the Boeing Lease Agreement. Complaint, Ex. 9 (Amendment No. 4), Recital ¶ 6 (“WHEREAS, the Landlord desires to maintain the existing numbe r of aircraft tie downs on the 760 Parcel and 770 Parcel so as to minimize disruptions to the existing number of aircraft based at the airport...”).
In fact, Respondent’s policies in this regard have only delayed the disruptive effect of Boeing’s displaceme nt of GA and magnified the uncertainty of the future of GA at RNT. Initially, GA aircraft on 760 and 770 were told that they could stay there until March 31, 2015. This date was later pushed back to June 30 th . Now, it appears to have been moved again to Ju ly 31 st ; however, with nowhere to go and an uncertain future , many GA aircraft are choosing to leave the field. Paholke Dec . ¶ 24 . Given current conditions, they will not return and they will
not be replaced. Finally, despite Respondent’s conclusory statem ents buttressed by self

- serving information provided by Boeing, the latter has no demonstrable need for the 760/770 Parcels , and simply referencing the heavy demand for the 737 MAX does provide any evidence demonstrating an actual , current need

. MSJ at 9

- 10. To th e contrary, t he most probative evidence demonstrates a clear lack of need , given that in the almost two years that it has leased the parcels , Boeing has never parked a single aircraft there or otherwise made use of them. Paholke Dec . ¶ 19

. Indeed, Responde nt has acknowledged that Boeing may choose never to14

utilize the 760/770 Parcels. Complaint, Exhibit 6d, paragraph 4. This is not a surprising conclusion given that Boeing leaves large portions of its other leaseholds at RNT unoccupied , including Apron B, a parking apron with positions for five 737s that Boeing has leased since 2008 and which is almost always entirely vacant

. Paholke Dec . ¶ ¶ 19

- 21 ; See also , Renton Reporter, March 26, 2008, “Boeing Takes Back Apron, Sealing Jet Center’s Demise” attached here to as Exhibit E

. Unfortunately , Respondent’s leases, in an abdication of its rights and powers, allow Boeing to employ this sort of “contingency” strategy, and leave its leaseholds vacant and unused unless and until it requires them

– all at the expense of aeronautical service providers who have
proven, current and real need s for more space in order to serve the aeronautical users of RNT

. Accordingly, the material facts as alleged by PFA regarding Respondent’s displacement of GA at the Airport, are either d isputed or undisputed in PFA’s favor, and thus more than sufficient to form the basis for a violation of Grant Assurance s 5 , 22, 24, and 29.
II. ARGUMENT A motion for summary judgment is appropriate only when “there is no genuine material issue of fact for adj udication, and [] the complaint, when viewed in the light most favorable to the complainant, should be summarily adjudicated in favor of the r espondent as a matter of law.” 14 C.F.R. 16.26(c). Respondent’s Motion for Summary Judgement seeks summary adjudic ation on all of PFA’s clams; however, since Respondent has not made the required showing that there is “no genuine issue of material fact for adjudication,” its Motion for Summ ary Judgment should be denied.15 A. Boeing is Not an Aeronautical User and It is Not Engaged in Aeronautical Activities at RNT As Respondent correctly notes, “the primary focus of a publically

- funded airport must be to provide aeronautical services to the public.” MSJ at 17. And, Respondent readily acknowledges that Boeing does not serve the flying public from the Airport. MSJ at 30, fn. 10. In Respondent’s opinion however, this seeming contradiction is of no import. Boeing, it argues, is engaged in “aeronautical activity,” in that it manufactures airline transport aircraft that are ulti mately used by the public after they are flown out of the Airport for delivery; thus, Boeing is should be considered an aeronautical user of the Airport, and entitled to all of the rights and protections that such a designation affords. This includes allowing Boeing to compete with aeronautical service providers for space at the Airport designated for GA , and to be given the preferential lease rates accorded to aeronautical users . If the Grant Assurances are to have any meaning, however, and if feder ally

- obligated Airports are to remain open and available to public aeronautical users, the FAA must reject Respondent’s interpretation of “aeronautical activity” outright. “The basic federal obligation of the sponsor is to make public landin g and aircraft parking areas available to the public.” FAA Order 5190.6B, Airport Compliance Requirements , September 30, 2009 (“FAA Order 5190.6B”), ¶ 12.2(b). “The Airport Compliance Program is designed to protect the public interest in civil aviation. Gr ants [] are in exchange for binding commitments (federal obligations) designed to ensure that the public interest in civil aviation will be served.” Id . at ¶1.5. Boeing, a corporation that manufactures airline transport aircraft off

- airport and then
t ows them on airport to be stored before delivery, does not serve the public interest in civil aviation at R NT. It serves its own interests and that of its shareholders. If RNT and federally16

obligated airports nationwide are to continue to provide aeronautica l services to the public, the FAA must affirm a definition of aeronautical use that excludes activities that are related, directly or indirectly, to the commercial manufactur e of aircraft. To do otherwise would lead to the extreme example that is now prese nted at RNT, where a powerful multinational corporation, with virtually unlimited resources, is able to effectively convert a pub lic airport into a private

one. Aeronautical Activity Does Not Include Aircraft Manufacturing Pointing to Appendix Z to FAA Order 5190.6B, Respondent contends that Boeing’s activities at the Airport fall squarely within the definition of “Aeronautical Activity,” which includes, “[a]ny activity that involves, makes possible, or is required for the operation of aircraft or that c ontributes to or is required for the safety of such operations. Id

. Appendix Z is admittedly broad ranging and goes on to provide a non

- exhaustive list of such activities; notably absent from that list , however, is aircraft manufacturing. Id

. This is no t surprising as the FAA has consistently taken the position that aircraft construction is not an aeronautical activity. Respondent’s attempt to minimize the finding by the
FAA in BMI Salvage Corporation & Blueside Services, Inc. v. Miami

- Dade County, FL th at “aircraft manufacturing is not recognized by the FAA as an ‘aeronaut ical activity’” is unavailing

. Although BMI might have concerned a salvage and demolition operation, the FAA explicitly treated the question of whether aircraft manufacturing could be regarded as an aeronautical activity and concluded that it could not. FAA Docket No. 16

- 05

- 16 (April 15, 2011) (Final Decision and Order on Remand), at 23. Moreover, on appeal, the 11 th Circuit concluded that the FAA’s determination in this regard was re asonable . BMI Salvage Corp. v. FAA, 488 Fed.Appx. 341 (Table) (11 th Cir. July 19, 2012) (“Not every action involving aircraft is deemed aeronautical17

and the FAA is entitled to draw a line between what is aeronautical activity and what is not”). Ashton is equally clear. Ashton v. City of Concord , FAA Docket No. 16

- 99

- 09 (January 28, 2000) (Director’s Determination), 2000 FAA LEXIS 150, *41 (“The FAA notes that the construction of aircraft is not an aeronautical activity.”).
In an effort to skirt the FAA’s c lear and longstanding position in this regard, Respondent alleges throughout the MSJ, and often inconsistently, that Boeing is engaged in other activities at the Airport that are on the list found in Appendix Z , such as aircraft storage and aircraft mainte nance. 3 This, Respondent submits, is proof that Boeing is in fact engaged in aeronautical activities as the term is defined in Appendi x Z . However, the examples listed in Appendix Z all share one thing in common: they are related to aircraft operation at the airport in question. Boeing’s storage of aircraft at RTN (and whatever limited maintenance is performed) is not related to the operation of aircraft from RTN, but rath er to its manufacture of aircraft next door.
Even Respondent acknowledges that “Boeing’s Airport activities are, of necessity, tied directly to the manufac turing operations going on at its facility adjacent to the Airport.” MSJ at 22. Boeing provides nothi ng to aeronautical users of the Airport, and it does not buy services from aeronautical service providers at the Airport (it has its own fuel farm) ; thus, it does not

3 While Respondent and Boeing go to great lengths to amplify the type of activities that Boeing wil l be engag ed on the 760/770 Parcels , a review of the record, including the MSJ and the materials provided in support thereof , reveals that Boeing intends primarily to use the 760/770 Parcels for aircraft storage, and that any maintenance or other activity conducted there will be minimal, at best. See e.g. , Letter from Lori Pitzer (Boeing) to Ryan Zulauf ( Respondent ) , dated February 28, 2012, attached to as Exhibit JW

- 3 to Wilson Dec. (“The space requested would be additional apron space to accommodate aircraft storage only...”); J ohnson Dec. ¶ 19 (“Boeing will use the 760 and 770 Parcels for temporary airplane storage and for completion of reengineering and maintenance or other modifications that may be needed to required airplane changes based on flight test results.” ) (emphasis a dded).18

participate in aeronautical activity at RNT. It merely parks it s airplanes there that do not fit in its own, off

- airport facility, and uses the runways when needed. 4 If an activity that is merely associated with the commercial manufacture of airline transport aircraft that occurs off

- airport constitutes an “aeronautical activity” at federally obligated airports, the implications would be significant. Not only could Boeing rightfully, and through proceedings such as this, force federally

- obligated airports to treat it on terms equal to any other legitimate aeronautical user or aeronautical serv ice provider at an airport, but so could a Boeing subcontractor that manufactures bolts that are “required for the operation of [737] aircraft, ” as by Boeing’s reading, this would place such a subcontractor within the definition found in Appendix Z (the bo lt, after all, is “required for the operation” of the aircraft)

. If this interpretation is accepted, RNT and airports like it across the country will cease to be available for public use, and instead will become federally subsidized manufacturing hubs for anything having to do with the operation of aircraft. PFA does not believe that this is the result that Congress or the FAA intended when legislating and enacting the federal grant assurances. Recent Proposed Policy Statements Do Not Support Respondent’s Contention that Aircraft Storage that is Incidental to Off

- Airport Commercial Aircraft Manufacturing Constitutes an Aeronautical Use at a Federally Obligated Airport On July 22, 2014, the FAA publishe d a proposed Policy of the Non

- A eronautical Use of Airpo rt Hangers. 79 Fed. Reg. 42483 (July 22, 2014) (“Proposed Hanger Policy”). As noted therein, the primary goal of the Proposed Hanger Policy is to “protect federal investment in federally obligated airports by insuring aeronautical facilities are ava ilable to aeronautical users.”

4 Other than the runway use, all of Boeing’s activities could and should occur at its facility off

airport. Presumably the issue is that Boeing does not have enough room at this facility ; but the problems caused by Boeing’s space constraints should not be shifted onto the ae ronautical users of a federally obligated airport.19

Id . Under the heading “Use of Hangers for Fabrication and Assembly of Aircraft,” t he Proposed Hanger Policy states that “While building an aircraft results in an aeronautical product, the FAA has not found all stages of the buildi ng process to be aeronautical for the purposes of hanger use. A large part of the construction process can be and of ten is conducted off

- airport.” In other words, the FAA reiterated its position that aircraft manufacturing is not considered an aeronautical activity for the purposes of ascertaining the obligations of an airport that receives federal funding. As the background of the Proposed Hanger Policy makes clear, this longstanding FAA policy regarding aircraft construction caused some consternation with in the homebuilding community, which often uses aircraft hangers to assemble ex perimental aircraft. T he Proposed Hanger Policy explicitly states that it i s directed squarely at the homebuilding community and
t hose airports where they reside

. Id . (“While th e same principles apply generally to large aircraft manufacturing, compliance issues involving aircraft construction have typically been limited to homebuilt aircraft construction at general aviation airports. “). In fact, the Experimental Aviation Associ ation, the lobbying and advocacy arm of the homebuilding community worked with the FAA to create the Proposed Hanger Policy. See “FAA Releases New Hanger Use Policy,” dated July 24, 2014 at https://www.eaa.org/en/eaa/eaa

- news - and

- aviation

- news/eaa/2014

- 07

- 24

- faa

releases

- new - hangar

- use - policy , attached hereto as Exhibit F

. To suggest then, as Respondent does, that a policy clarification d irected toward general aviation and the homebuilding community somehow blesses Boeing’s non

- aeronautical use of the Airport misreads both the intention behind the Proposed Hanger Policy and any clarification that is contained therein. This is especially tr ue given that Boeing is not even engaged in the final assembly of aircraft at RNT, which is the only portion of manufacturing that the FAA proposes to treat as20

aeronautical. Proposed Hanger Policy at 42485 (“The FAA is not proposing any change to existing policy other than to clarify that final assembly of an aircraft, leading to the completion of the aircraft to a point where it can be taxied, will be considered an aeronautical use.”) Boeing uses huge swaths of RNT essentially as a parking lot for its comp leted 737s. These aircraft are assembled off

- airport (including final assembly) and towed onto Airport property under a Through the Fence Agreement. 5 Moreover, Boeing’s aircraft storage at RNT is not related to aircraft operations at the Airport, but rathe r to aircraft manufacturing that occurs off

- airport

. Although Respondent might wish otherwise, the FAA’s proposed policy clarification does not change the logical conclusion that activities (e.g., aircraft storage) that are r elated to n on aeronautical activities (e.g. , aircraft manufactur ing ) must also be considered non

- aeronautical. Id

. It is clear then that nothing in the Proposed Hanger Policy is applicable to Boeing’s activities at RNT or changes the fact that it is not eng aged in aeronautical activity at the Airport. To the contrary, the statements contained therein confirm that Boeing, a non

- aeronautical user, should not have been permitted to compete with PFA, an aeronautical service provider, for the l ease of parcel s des ignated for aeronautical (and specifically, general aviation) use. Proposed Hanger Policy at 4284 (“Limiting use of aeronautical facilities to aeronautical purposes ensures that airport facilities are available to meet aviation demand at the airport.”). Ac cordingly, Respondent’s actions in this regard were in violation of its primary grant assurance obligation to make the Airport open and available to aeronautical users and service providers.

5 Through the fence operations for aeronautical businesses offering no services to the public are discouraged by the FAA. See FAA Order 5190.6B §12

- 7(d)(2) . “If the FAA regiona l airports division determines that such an agreement lessens the public benefit for which the airport was developed, the FAA regional airports division will notify the sponsor that the airport may be in violation of its federal obligations.” Id . § 12

- 7(e)

.21 B. Grant Assurance 22
- Unjust Discrimination Grant Assurance 22 ob ligates an airport sponsor to make its aeronautical facilities available to the public on reasonable terms and without unjust discrimination. FAA Order 5190.6b ¶ 9.1(a). The prohibition on unjust discrimination extends to all types, kinds and classes of ae ronautical activities, as well as individual members of a class of operator. Id . Unjust discrimination may be found when an airport sponsor disadvantages a potential provider of aeronautical services by deception or neglect. Khilstrom v. Port of Orcas , FA A Docket No. 16

- 02

- 07 ( Director’s Determination ) (September 1, 2004) at 19. PFA has alleged that Respondent violated Grant Assurance 22 when it: (1) awarded Boeing, a company that provides no aeronautical services to the public at the Airport, a leaseho ld for facilities designated for general aviation at the expense of PFA, a commercial aeronautical service provider; and (2) unfairly discriminated against PFA with regard to the application to lease the 760/770 Parcels and accorded preferential treatment to Boeing by misleading PFA about the availability of the 760 Parcel at the same time it was negotiating a lease for such with Boeing. Respondent’s Failure to Make the Airport and its Facilities Available For Public Use Respondent has acknowledged, in it s leasing polices and elsewhere, that the Airport is “largely built

- out, and it may happen that demand for aeronautical leasehold facilities [will] exceed [] availability.” Complaint, Ex. 6, Section 6.13. PFA, the only full

- service FBO 6 at the

6 Despite Respondent’s efforts to convince the FAA otherwise, Rainier Flight Service, the only other “FBO” on the field, is not full service. Paholke Dec. ¶ ¶ 10

- 21 ; Cf

. Wilson Dec. ¶ 6. It does not provide fuel, aircraft maintenance, oxygen, lavatory ser vice, or transient aircraft tie

- down. Transient aircraft are not directed there, nor does Rainier provide any services to them. It is essentially a flight school that leases a few tie

- downs to operators based on the field. See www.ranierflightservice.com ; http://www.airnav.com/airport/KRNT (listing Pro

- Flight as the only FBO on the field), prin t outs of b oth attached hereto as Exhibit G

.22

Airport , mad e it known to Respondent as early as December 2011 that it required additional space in order to grow and fully provide the services that were being demanded of it by aeronautical users , the Airport, and the flying public. 7 Complaint, Ex. 6a. When additi onal suitable space became available, space that PFA repeatedly expressed interest in and from which PFA intended to provide aeronautical services (namely, flight training and transient aircraft tie

- down and servicing), Respondent instead chose to quietly negotiate the lease of the space to Boeing, an entity that provides absolutely no aeronautical services to the public from the Airport. This decision in and of itself violated the first principal of Grant Assurance 22, which is to make an airport funded by public tax dollars available for public use

– not to a corporation that will close the space to the public in order to store airline transport aircraft before they depart the Airport, never to return again. PFA waited patiently for the 760 Parcel since fi rst indicating its interest in 2011, as it is directly adjacent to the parcel from which it operates its FBO. When the 760 Parcel finally did become available, PFA was the only aeronautical service provider to express an interest in its lease. Although Re spondent is correct in arguing that an airport sponsor has no obligation to provide a tenant with any and all property it desires, Grant Assurance 22 does obligate a sponsor “to make available suitable areas or space on reasonable terms to those willing an d qualified to offer aeronautical services to the public or support services to aircraft operators.” FAA Order 5190.6b § 9

- 7. 8 This is the prime obligation of a federally obligated airport. See Roadhouse

7 In 2003 , the Airp ort demanded that PFA begin selling Jet A fuel. After investing significant sums to do so, the Respondent is now taking actions that will deprive PFA of the very customers (turbine operators) that Respondent required PFA to expend significant resources to serve.

8 Perhaps in order to distract from the unambiguous charge to sponsors that is contained in this language, Respondent claims that PFA somehow misapplied or misinterpreted this very clear provision of FAA Order 5190.6B in its Complaint

. See MSJ at 2 7 citing Complaint ¶ 51. PFA did not; it cite d the (footnote cont’d)23

Aviations, LLC v. City of Tulsa & the Tulsa Airport s Improvement Trust , FAA Docket No. 16

- 05

- 08 (June 26, 2007) (Final Decision) 2007 LEXIS 240, *17 n.4 citing United States Const. Co. v. City of Pompano Beach , FL, FAA Docket No. 16

- 00

- 14 (July 10, 2002) (Final Decision) (“Operating the airport for aeronau tical use is not a secondary obligatio n; it is the prime obligation. This obligation includes the opportunity for leaseholders to develop airport property for aeronautical use.”) Moreover, as Respondent has noted, it is required to “administer the Airport ’s land in a manner consisten t with the public’s interest.” Northern Air, Inc., v. County of Kent , MI, FAA Docket No. 16

- 11

- 10 (March 28, 2013) (Director’s Determination) 2013 FAA Lexis 316, at *60

. If “public” is defined as that portion of the public tha t makes use of the Airport, as it should be, there can be no doubt that Resp ondent has failed in this charge

. As a result of the City’s preferential treatment of Boeing, the public will no longer have access to the 760/770 Parcels (which the Airport has d esignated for general aviation), the tie

down’s on those parcels will be removed, and PFA will no longer be able to store its flight school aircraft in a workable location. In addition, parking space for GA aircraft will be greatly diminished. Thus, by rej ecting PFA in favor of Boeing, an entity that will provide no aeronautical services to the public (in fact, once occupied by Boeing, the 760 /770 Parcel s will be off limits to the public), Respondent has ignored its overarching obligation as a federally

obl igated facility to make the Airport available to the public for aeronautical use.
T he supposed alternative arrangements that Respondent offered to PFA are not, as the Responde nt well knows, viable options. The only “available” parcel at the Airport sui tab le for provision verbatim, and in support of its argument that Respondent was obligated to award 760/770 to PFA, an aeronautical user providing services to the public, over a through the fence operator that provi des no aeronautical services to the public. See Complaint ¶¶ 51

- 52.24

GA is the 820 Parcel; however, the City has already agreed to lease it to Boeing. Jacobsen Dec. ¶ 8. Even if 820 was available, Boeing’s occupation of the 760/770 Parcels leaves the 820 Parcel unsuitable for transient aircraft parking or PFA ’s fligh t training fleet. There is no access to the 820 Parcel from the P erimeter R oad; accordingly, the only way to ferry flight school students or
t ransient customers from PFA will be to drive them through airport drive lanes

– a thoroughly impracticable situati on for an active flight school, or for transient customers. Paholke Dec. ¶ 17

. Thus, w ith no other suitable spaces left for GA thanks to Boeing’s ongoing encroachment into the areas designated for GA, Respondent has been left to lamely suggest that PFA cou ld park aircraft on the site of an old restaurant at the far end of the Airport , which Respondent has admitted would need retrofitting before it was even suitable for such a use , as it is unpaved and located outside of the Airport fence . MSJ at 3, Jacobsen Dec. ¶ 8. In sum, Responden t has chosen to deny PFA , the sole full

- service FBO at RNT, access to the only remaining viable space on the Airport (and one that has been designated for general aviation) to store its flight school aircraft and to park transient aircraft, in favor an ent ity that will offer no services, aeronautical or otherwise, to the public. Accordingly, Respondent’s failure to make the 760/770 Parcels available to the only aeronautical service provider that was interested in leasing them is a violation of Grant Assuran ce 22. Respondent’s Unjust Discrimination Against PFA In addition to failing to provide reasonable access, Respondent unjustly discriminated against PFA during the application and negotiation process for the 760/770 Parcels. Again, PFA alleges and provide s proof to suggest that Respondent actively misled it into believing that the 760 Parcel was not available for lease, while at the same time negotiating lease terms with Boeing for the very same parcel. PFA has provided detailed allegations concerning Resp on dent’s25

discriminatory conduct. See Section I.A , supra . Rather than dispute these allegations, Respondent argues that it was allowed to unjustly discriminate against PFA since it is an aeronautical service provider at the Airport, while Boeing “manufactur ers its aircraft in a facility adjacent to the Airport; taxis t he aircraft to the Airport [and ] uses [the Airport] for new aircraft storage...”. MSJ at 28. Thus, Respondent implies that it was well within its rights to t reat the two differently since Boeing and PFA are not similarly situated users. MSJ 27

- 29. That is a misreading of the applicable law. While it is true that sponsors are entitled to offer different terms to users that are differently situated, there is nothing in any of the caselaw cited by Resp ondent, or in other FAA policy or guidance, to suggest that a sponsor is ever allowed to mislead, deceive, or otherwise unjustly discriminate against one airport tenant in favor of another. See BMI Salvage Corp. & Blueside Servs. v. Miami

- Dade County, FL , FAA Docket No. 16

- 05

- 16, (March 5, 2007) (Final Decision) 2007 WL 926176, *7 (“Among these is the obligation to treat in a uniform manner those users making the same or similar use of the airport, and to make all airport facilities and services available o n reasonable terms and without unjust dis crimination.”) (emphasis added); Northern Air , supra , 2013 LEXIS 316, *31 (noting the requirement to treat similarly situated users in a uniform manner and to make facilities available without unjust discrimination )

. In other words, the obligation not to unjustly discriminate is separate and distinct from the obligation to treat similarly situated users in a uniform manner. Deviation from the former obligation is never permitted. See R/T

- 182, LLC v. Portage County R egional Airport Authority , FAA Docket No. 16

- 05

- 14, (Final Decision) (March 29, 2007) 2007 WL 1058451, *14 (“[T]he plain language of grant assurance 22 does not prohibit discrimination...it prohibits unjust [] discrimination.”) ; Adventure Aviation v. City of Las Cruces, NM , FAA Docket No. 16

- 01

- 14,26

(Final Determination) (September 9, 2003) 2003 WL 22696923, *18 (“Grant Assurance 22 does not require the Respondent to offer lease rates and terms that are identical to other leases negotiated, so long as there is no unjust discrimination.”). PFA is not claiming that Respondent unfairly offered different pricing, offered different terms, or imposed unfair requirements

– all things that may properly vary betwe en differently situated users. PFA alleges, and provide s evidence tending to prove , that Respond ent refused to negotiate with PFA in good faith over the lease of the 760/770 Parcels, as the City was only interested in awarding Boeing this space. The failure to negotiate in good faith

– as PFA alleges occurred w hen the City misled it about the availability of the 760 Parcel and discouraged it from submitting a lease application , and when it notified PFA that Boeing had been awarded the 760/770 Parcels before the City formally voted in the matter

– constitutes unj ust discrimination. See United States Construction Corp. v. City of Pompano Beach , FL, FAA Docket No. 16

- 00

- 14 , (Final Determination) (July 10, 2002) 2002 WL 34167573, * 16,

. Even assuming that Boeing is an aeronautical user of RNT, the only entity that G rant Assurance 22 would have allowed preferential treatment for in the application for a lease of a parcel designated for general aviation, would be the entity that was proposing to offer aeronautical services to the GA public therefrom. See ALCA v. Miami

- Dade County, FL , FAA Docket No. 16

- 08

- 05 (August 31, 2010) (Director’s Dete rmination) 210 FAA LEXIS 234, * 39

- 40 citing Grant Assurance 22(i) ( finding that an exception to the prohibition against limiting access to a type , kind or class of aeronautical user exists “ when necessary to serve the civil aviation needs of the public.”) ; accord Roadhouse , 2007 FAA LEXIS 240, *15

- 16; Northern Air , 2013 FAA LEXIS 316, *31

- 32. The only applicant for the 760/770 Parcels proposing to serve the civil aviati on needs of the public was PFA.27

In sum, Respondent shamelessly argues that it was justified in giving preferential
trea tment to Boeing

– an entity that intends to close to the pub lic an area that the Airport has designated for general aviation in order to park those completed airline transport aircraft that it could not fit in its own, off

- a irport facility

– because Boeing i s not “similarly situated” to PFA. Respondent was not so entitled , and its decision to do so constitutes a violation of Grant Assurance 22. Accordingly, its Motion for Summary Judgment should be denied.

C. Grant Assurance 29

– Airport Layout Master Plan “Federal grant agreements require sponsors to conform airport use and development to the ALP.” FAA Order 5190.6B § 7.18. An ALP “reflects the agreement between the FAA and the sponsor regarding the proposed allocation of airport areas to specific operational and support functions.” Id . An approved ALP “becomes an important instrument for controlling the subsequent development of airport faci lities.” Id . A sponsor “will not make or permit any changes or alterations in the airport of any of its facilities which are not in conformity with the Airport Layout Plan as approved by the Secretary and which might, in the opinion of the Secretary, adv ersely affect the safety, utility or efficiency of the airport.” Id . at Appendix A, 29.a. By allowing Boeing to lease large tracts of Air port property designated for GA, Respondent has permitted changes to be made to the ALP, without approval by the Secr etary, which drastically affect the utility of the Airport. PFA’s factual allegations in this rega rd can be found in in Section I.B , supra . Respondent doesn’t deny that the 760/770/820 Parcels are designated on the ALP for GA, nor does it claim that the A LP has been updated since December 2009, which is the version PFA attached a s Exhibit 11 to the Complaint. Instead, in an effort involving no small amount of audacity , it claims that the activities that Boeing will be engaged in on those parcels

– the storage28

of airline transpo rt aircraft

– constitutes GA. MSJ at 40. PFA will not expend either its or the
FAA ’s resources refuting this argument. Suffice it to say, if this definition of GA is accepted , ALPs at airports across the nation will not be worth the paper on which they are written

. Perhaps recognizing the futility of this argument, Respondent next argues that if the FAA does determine that Boeing’s use of the 760/770/820 Parcels is inconsistent with the ALP (as it is), the City should simp ly be allowed to make an interim update to the ALP, which would cu re any violation. It cites several prior cases in support of this proposition , but these cas es are readily distinguishable. For example, in JetAway Aviation , the FAA determined that it did not constitute a violation of Grant Assurance 29 when the sponsor in question refused to accept Complainant ’ s off

- airport parcel for an FBO just because it was once depicted on an ALP as a future location for an FBO. JetAway Aviation v. Montrose County, C olorado , FAA Docket No. 16

- 08

- 01, (Director’s Determination) (July 2, 2009) 2009 FAA LEXIS 251, *65

- 66. When the needs of aeronautical users and aeronautical development change, the FAA found that a sponsor could deviate from an ALP in order meet these nee ds. Id . Such is not the case here. At RNT, l arge chunks of Airport property that have been designated for GA on the ALP are being turned over to Boeing, an aircraft manufacturer that is not engaged in general aviation activity at the Airport. This is not a change in the ALP that responds to the needs of aeronautical

use rs and aeronautical development

– the type of change that the FAA allows, and in facts
encourages. Id . at *63 quoting Gate 9 v. Dekalb County , FAA Docket No. 16

- 05

- 13 (February 1, 2006) (Director’s Determination) (“The FAA fully expects that pursuit of aeronautical development would reasonably include pursuing any necessary and appropria te alteration [] to an ALP...”). This change comes at the expense of aeronautical development at the Airport, and re

-29

writes the understanding between the FAA and Respondent about the proper allocation of the limited space at the Airport to GA

. Cf. Valley Aviation Services, LLP v. City of Glendale, AZ , FAA Docket No. 16

- 09

- 06 (Director’s Determination) (May 24, 2011) 2011 WL 2274635, *35 (“[I]t is a v iolation of the airport sponsor’s federal obligations to permit aeronautical hangers to be used for non

- aeronautical purposes,[],where there is a need for aeronautical use and where the ALP indicates the use is aeronautical.”) The entire purpose of an FAA

- approved ALP, which is a prerequisite to receiving AIP grants, is to memorialize the agreement between the FAA and the sponsor regarding the proposed allocation of airport areas to specific op eration and support functions. FAA Order 5190.6B § 7.18. Pres umably, when the FAA approved the current ALP in 2009, it was aware of Boeing’s operations on the Airport, and concurred with the Airport’s allocation of space between manufacturing (which must have been understood to mean Boeing) and GA. To simply allow
R espondent to amend the ALP to permit what was previously deemed an incompatible use of Airport property would defeat the very purpose of having an FAA

- ap proved ALP in the first place. The FAA, aeronautical users, and the flying public depend on the repres entations contained therein in order to plan for current and future use and operations. Accordingly, as Respondent has clearly violated the ALP by granting Boeing leases on parcels of the Airport that have been designated for GA, the FAA should order Respo ndent to restore the 760/770/820 Parcels for GA use. FAA Order 5190.6B, Appendix A ¶ 29.b.

D. Grant Assurance 24

– Fee and Rental Structure Boeing is not an aeronautical user of the Airport. See Section II.A , supra ; see also FAA Order 5190.6B § 18

- 3(b) (“ Individuals or business providing services involving operation of aircraft or flight support directly related to aircraft operation are considered to be aeronautical users.”). Because Boeing does not fall within the definition of an aeronautical user, it m ust be30

charged fair

- market rates. Id . § 17.2 (“Fair market fees for the use of the airport are required for

non - aeronautical use...”). Respondent disputes the need to charge Boeing a fair market rate for the 760/770 Parcels on the grounds that: (1) Boeing i s an aeronautical user; (2) the focus of Grant Assurance 24 is an airport’s ability to be self

- sustaining, and PFA has not alleged, nor could it allege, that RNT is not self

- sustaining; and (3) PFA has submitted no evidence to demonstrate that Boeing is no t already being charged a fair market rate. First, while self

- sustainability is a goal for all federally

- obligated airports, the FAA does not elevate the principle of self

- sustainability above all others. In particular, and in recognition of the fact that the prim ary purpose of an airport is to attract and retain aeronautical service providers, the FAA acknowledges that some airports may need to charge rates that are below what would be required to maintain self

- sustainability in order to assure that aeronautical

s ervices are available to the public. In other words, if an airport has to choose between being self

- sustaining, or attracting businesses to provide an appropriate level of aeronautical s ervices to the public, it is appropriate to choose the latter. FA A Or der 5190.6B §§ 17.6, 17.10; See als o , Clarke v. City of Alamogordo , NM, FAA Docket No. 16

- 05

- 19, (Director’s Determination) (September 20, 2006) 2006 WL 2791038, *19 quoting 64 Fed. Reg. 7696 (February 16, 1999) (“[A]n airport proprietor’s decision to char ge rates that are below those needed to achieve self

sustainability in order to assure that services are provided to the public is no t inherently inconsistent with the obligation to make the airport as self

- sustaining as possible in the circumstances.”).
A s for what constitutes a fair market rate, Respondent has not disputed that Boeing pays the same rate per square foot as PFA. Complaint ¶ 68. Rather, Respondent argues that PFA has31

provided no evidence to suggest that this is not the fair market rate for such properties. However, as Respondent is well aware, the rate provided to Boeing is discounted 15% of f the appraised fair market rate due to aviation use restrictions. See 2014 RNT Appraisal, pg. 32, excerpt attached hereto as Exhibit H

. Even assuming, arguen do , that Respondent is charging Boeing the fair market rate, then that means it is also charging PFA the fair market rate , as Boeing and PFA pay the same rate per square foot . This result is incompatible with the requirement that aeronautical users be char ged “reasonable” rates, and that non

- aeronautical users’ fair market rates be employed to lower the rate structure provided to aeronautical users. FAA Order 5190.6B § 17.11 citing Bombardier Aerospace, et al. v City of Santa Monica , FAA Docket No. 16

- 03

- 1 1, January 3, 2004 (“It is to the benefit of aviation and the travelling public that aeronautical users be able to use the airport at rates and charges below the cost of providing the aviation facilities and services if these are effectively subsidized by non - aeronautical users. ”). Furthermore, given the substantial revenue surpluses that the Airport seems to be accruing ( See Jacobsen Dec. ¶ 4 and Ex. 1 thereto), an FAA inquiry into whether the fees being charged to aeronautical users is consistent with the Respondent’s obligation to make the Airport available on fair and reasonable terms would appear to be warranted. FAA Order 5190.6B § 17.9. In sum, if Respondent is going to continue to allow Boeing to displace aeronautical users at RNT, Boeing’s lease rates should be increased to fair market rates in order to subsidize aeronautical activities at the A irport, thereby reducing the economic impact of Boeing’s expansion at RNT on aviation users and the aviation public.

E. Grant Assurance 5

– Preserving Rights and Powers Grant Assurance 5 requires that a sponsor will not “take or permit any action which would operate to deprive it of any of the rights and powers necessary to perform any or all of the32

terms, conditions, and assurances in the grant agreement witho ut the written approval of the Secretary, and will act promptly to acquire, extinguish or modify any outstanding rights or claims of right of others which would interfere with such performance by the sponsor. FAA Order 5190.6B, Appendix A ¶ 5.a. Boeing’ s lease with Respondent gives Boeing the “sole discre tion” to leave all of its leaseholds (including the 760/ 770 Parcel s ) vacant if “business conditions affecting aircraft delivery and/or manufacturing at the time of such determination” warrant as much. Complaint, Ex. 9 (Boeing Lease) ¶ 8.b. Although Respondent asserts that Boeing has a demonstrable need for all of the space it leases , the facts belie this claim. In the past two months, despite Boeing’s apparent record setting pace of forty

- two 737s manufactured per month, Apron B, which can store up to five a ircraft, was occupied for only 9 posit i on days. Paholke Dec . ¶ 21 . This equates to a 3 % occupancy rate. 9 There is no reason to believe that Boeing’s use of the 760 /770 Parcels will be any more robust (and for the first two years of Boeing ’ s lease the have bee n entirely vacant) , but even if its on

- airport needs do materialize, Boeing already had more than sufficient space (o n Apron B) to meet them. Although the City claims that Amendment No. 4 somehow altered the broad discretion given to Boei ng under the original lease, it did not

– Amendment No. 4 is just that, an amendment, and nothing therein states that Section 8.b of the Boeing Lease is being modified or amended. It is true that until Boeing takes occupancy of the 760 and 770 Parcels, Sec tion 1.b allows the current tenants to remain in place; however, once Boeing does take occupancy, its use of the parcels will be governed by Section 8.b of the Boeing Lease, which means that Boeing

9 Five positions o ver 60 days equal 300 position

- days. In the 60 day period that Apron B was observ ed beginning March 24, 2015, two aircraft were parked for one day, one was parked for three days, and one was parked for four days. Paholke Dec . ¶ 21

.33

could leave the parcels empty for the duration of the leas e if it decides, in its sole discretion, that business conditions necessitate such a decision. By giving Boeing the contractual authority to leave space designated for GA fallow for up to 7 years if manufacturing conditions warrant it, Respondent has abdi cated the power necessary to ensure that the Airport is utilized in a manner that benefits the flying public. With palpable irony, Respondent argues that Section 8.b of the Boeing Lease is simply a reflection of the fact that Boeing, unlike PFA, does not s erve public users of the Airport. MSJ at 22. Boeing’s activities at the Airport “are, of necessity, tied directly to the manufacturing operations going on at its facility adjacent to the Airport .” Id

. In other words, Boeing’s use of the Airport is not rel ated to aviation activities at the Airport, but rather to aircraft manufacturing that occurs off

- airport. Thus, Respondent appears, when it is convenient for its case, to be perfectly willing to acknowledge that Boeing does not perform or engage in aeronau tical activities that are related in any way to aeronautical operations at the Airport. Finally, further evidence of Respondent’s relinquishment of its powers necessary to comply with its grant assurance obligations can be found in Boeing’s refusal to nego tiate with
PFA and the City over the use of the 760 /770 Parcel s , despite the request of the City Attorney.
See Email from Gerald Bresslour to Zanetta Fontes, dated March 20, 20 15, attached hereto as Exhibit I ; Email from Zanetta Fontes to Bernie Paholke, dated April 6, 20 15, attached hereto as Exhibit J

. Apparently, Boeing does not believe that the City could force it to relinquish the 760 Parcel if Respondent determined that it was required to do so in order to comply with it s grant assurance obligations and, a s such, Boeing feels no need, even when requested by the City, to engage in negotiations with PFA to attempt to resolve the instant matter

.34 CONCLUSION Based on the foregoing, Complainant respectfully requests that Respondent’s Motion for Summary Judgment be denied, and that t he FAA commence an investigation of PFA’s claims pursuant to 14 C.F.R. 16.29. Dated June 4, 2015. Respectfully submitted,

/s/______

_____________ Benjamin H. Klein L AW O FFICES OF P

AUL A. L ANGE , LLC 80 Ferry Boulevard Stratford, CT 06615 Ph one: (203) 375

- 7724 Fax: (203 ) 375

- 9397 bhk@lopal.com Attorney for Complainant35 CERTIFICATE OF SERVICE I hereby certify that I have this day caused the foregoing Answer to Respondent’s Motion for Summary Judgment to be served electronically , with prior written consent, on the following:

Zanetta L. Fontes Senior Assistant City Attorney 1055 South Grady Way Renton, WA 98057 zfontes@rentonwa.gov

Dated June 4, 2015

_/s/_________________________ Benjamin H. Klein