U.S. Department of Transportation Federal Aviation Administration 

## JAN 15 

## 2015 Office ofAirport Compliance and Management Analysis



### CERTIFIED MAIL- Return Receipt

Mr. Alan Armstrong, Esq. Attorney at Law 2900 Chamblee Tucker Road Building 5, Suite 350 Atlanta, GA 30341 Mr. Brandon Brown, Esq. General Counsel Louisiana Department ofTransportation and

Development 120I Capital Access Road Baton Rouge, LA 70804 Mr. Gerald G. Metzger, Esq. Mr. Charles Curtis, Esq. Metzger Law Firm 829 Baronne Street New Orleans, LA 70113 Dear Messrs. Armstrong, Brown and Metzger: BOO Independence Ave., SW. Washington, DC 20591



### RE: FLIGHLINE GROUND INC. v. LOUSIANA DEPARTMENT OF TRANSPORTATION AND DEVELOPMENT, AS SUCCESSORTO THE LOUISIANA DIVISION OF ADMINISTRATION AND THE BOARD OF COMMISSIONERS FORTHE MANAGEMENT OF THE LAKEFRONT AIRPORT; NON-FLOOD PROTECTIONASSET MANAGEMENT AUTHORITY, AS SUCCESSOR TO THE BOARD OF COMMISSIONERS OF THE ORLEANS PARISH LEVEE DISTRICT AND ORLEANS PARISH LEVEE DISTRICT, DIVISION OF NON-FLOOD ASSETS, FAA Docket No. 16-11-01 Enclosed is a copy ofthe final decision and order ofthe Federal Aviation Administration (FAA) with respect to the above-referenced matter.The Associate Administrator concludes that the analysis and conclusions contained 

### inthe Director's Determination with regard to Grant Assurance 5, Grant Assurance 19, Grant Assurance 22, Grant Assurance 24, Grant Assurance 25, and Grant Assurance 29 are supported by a preponderance ofreliable, probative, and substantial evidence, and are consistent with applicable law, precedent, and FAA policy. The reasons for upholding the Director's Determination are set forth inthe enclosed final agency decision.

· Sincerely,

# v~C, 

# cJJt

Manager, Airport Compliance

Division Enclosure 2CERTIFICATE OF SERVICE**~~** I HEREBY CERTIFY that on January

# J2_, 2015, I caused to be placed in the United States mail (first class mail, postage paid) a true copy ofthe foregoing document addressed to: For Complainant Alan Armstrong, Esq. Attorney at Law 2900 Chamblee Tucker Road Building 5, Suite 350 Atlanta, GA For Respondent Brandon Brown, Esq. General Counsel Louisiana Department ofTransportation and

Development 1201 Capital Access Road Baton Rouge, LA 70804 Gerald G. Metzger, Esq. Charles Curtis, Esq. Metzger Law Firm 829 Baronne Street New Orleans, LA 70113 Hand Delivered to: FAA Part 16 Airport Proceedings Docket FAA Airport Compliance and Management Analysis, AC0-100

# C!QAAJ,/U~~ Claudia Roberts Office ofAirport Compliance

and Management Analysis

### UNITED STATES DEPARTMENT OF TRANSPORTATION FEDERAL AVIATION ADMINISTRATION WASHINGTON, DC

Flightline Ground, Inc.

Appellant/Complainant 

### v. Louisiana Department ofTransportation and Development, as successor to the Louisiana Division ofAdministration and the Board of Commissioners for the Management ofthe Lakefront Airport; Non-Flood Protection Asset Management Authority, as successor to the Board OfCommissioners ofthe Orleans Parish Levee District and Orleans Parish Levee District, Division ofNon-Flood Assets.

Appellee/Respondent FAA Docket 16-11-01



### FINAL AGENCY DECISION I. INTRODUCTION This matter is before the Federal Aviation Administration (FAA) Associate Administrator for Airports on appeal filed by Flightline Ground Inc., d/b/a Flightline First (Flightline, Appellant, or Complainant) from the Director's Determination ofOctober 24, 2012, issued by the Director of the FAA Office ofAirport Compliance and Management Analysis, pursuantto the Rules of Practicefor FederallyAssistedAirportEriforcement Proceedings found in Title 14 Code of Federal Regulations (CPR) Part 16. The Director's Determination dismissed the Complainant's allegations against the Louisiana Department ofTransportation and Development, as successor to the Louisiana Division ofAdministration and the Board ofCommissioners for the Management ofthe Lakefront Airport; Non-Flood Protection Asset Management Authority, as successor to the Board ofCommissioners ofthe Orleans Parish Levee District and Orleans Parish2

Levee District, Division ofNon-Flood Assets (OLD, Respondent, Appellee, or Sponsor) regarding OLD's Federal obligations associated with its operation ofthe New Orleans Lakefront Airport (Airport), inNew Orleans, Louisiana. The Complainant argues on appeal to the Associate Administrator that the "Director's findings and conclusions were not supported by substantial evidence, ignored evidence in the record cited by Complainant, are arbitrary, capricious, an abuse ofdiscretion or otherwise not in accordance with law [5 U.S.C. § 706(2)(A)] and/or were contrary to constitutional right, power, privilege or immunity 

### [5 U.S.C. § 706(2)(B)]." [FAA Exhibit 

### I, Item 39, page 2] The Complainant objected to sixteen stated findings from the Director's Determination, arguing the Director made conclusions on specific allegations that were inconsistent with the facts and evidence in the record, arbitrary and capricious, and not in accordance with applicable law. [FAA Exhibit I, Item 39] Upon an appeal ofa Part 16 Director's Determination, the Associate Administrator must determine whether (a) the findings offact made by the Director are supported by a preponderance ofreliable, probative, and substantial evidence, and (b) each conclusion oflaw is made in accordance with applicable law, precedent, and public policy. [See e.g., Ricks v. Millington MunicipalAirport, FAA Docket No. 16-98-19, Final Decision and Order p. 21 (Dec. 30, 1999)] The FAA has reexamined the record, includingthe Director's Determination, the administrative record supporting the Director's Determination, the Complainant's Appeal and the Respondent's Reply under applicable law and policy. Based on this reexamination, the FAA Associate Administrator for Airports affirms the Director's Determination. Under this specific set offacts, where an airport sponsor violates a lease agreement with a competitor fixed-base operator (FBO) ofthe Complainant FBO, and thatthrough a mediated settlement agreement between the sponsor and the competitor FBO [See FAA Exhibit I, Item 4, Exhibit R-2, page 2], the competitor receives a perceived or actual economic advantage, the sponsor is under no grant assurance obligation to provide compensation, financial or otherwise, to the Complainant FBO (i.e., provide same or similar benefits). This decision constitutes the final decision ofthe Associate Administrator for Airports pursuant to 14 CFR Part 16. 

### II. SUMMARY OF THE DIRECTOR'S DETERMINATION In the October 16,2012, Director's Determination, the Director concluded: The Respondent has not violated Grant Assurance 5, Rights and Powers and/or Grant Assurance 29, Airport Layout Plan, (I) allowing AeroPremierthe right to sublease the second floor ofBuilding 101 without seeking prior permission from the Respondent or (2) granting AeroPremier the right at its sole optionto cancel the lease ofthe McDermott facility.The Respondent has not violated Grant Assurance 19, Operation and Maintenance by not restoring the National Guard Hangar within 14 months ofthe effective date ofthe Respondents lease with AeroPremier. Evidence presented on an open drainage area is inadequate to make a finding on whether the OLD is allowing the airport to deteriorate and to become a safety hazard because ofthe open drainage area and changes to an on-airport maintenance schedule. The Respondent has not violated Grant Assurance 22(c), Economic Nondiscrimination by entering into a settlement for damages with AeroPremier and Advantage Capital parents. The evidence presented on whether the OLD is unjustly discriminating against Complainant by charging Complainant nonreduced insurance premiums is inadequate to make a finding. The Respondent has not violated Grant Assurance 24, Fee and Rental Structure, by failing to collect past monies due from AeroPremier or by offering rent credits and a temporary reduction in insurance payments to settle its breach oflease with AeroPremier. [FAA Exhibit I, Item 38, pages 38-39] 

### III. THE PARTIES TO THE COMPLAINT Respondent/ Airport 3

The New Orleans Lakefront Airport sponsor is the Non-Flood Protection Asset Management Authority successor to the Board ofCommissioners ofthe Orleans Levee District and Division ofAdministration, State ofLouisiana, and the governing authority ofthe Non-Flood assets ofthe Orleans Levee District (OLD), including the New Orleans Lakefront Airport. [FAA Exhibit 1, Item 38, page I] On January 1, 2007, Management ofthe Lakefront Airport shifted from the Orleans Levee District (OLD) to the State ofLouisiana Division ofAdministration (DOA); ownership ofthe Airport stayed with the OLD. On August 15,2010, Management shifted again from DOA to the newly created Non-Flood Protection Asset Management Authority (Authority); the Authority was under Louisiana's Department ofTransportation and Development (DOTD) but OLD still held ownership ofthe Airport. On January 1, 2012, the Authority became a stand-alone political division removed from DOTD; ownership continues to be with OLD. The Airport is a public-use airport located in New Orleans, Louisiana. The development ofthe Airport has been financed, in part, with funds provided by the FAA underthe Airport Improvement Program (AIP), authorized by the Airport and Airway Improvement Act of 1982, as amended, 49 U.S.C., § 47101, et seq. [FAA Exhibit 1, Item 38, page 2J The airport has accepted $31,444,836 million in FAA AIP funding since 1982. [FAA Exhibit 1, Item IOJ The Airport has 116 based aircraft and approximately 52,000 operations per year. [FAA Exhibit I, Item 38, page 2 citing FAAExhibit I, Item IOJ4 

### Complainant on Appeal The Appellant is the Complainant, Flightline Ground Inc., d/b/a Flightline First (Flightline, Appellant or Complainant). Flightline is a FBO providing services to aircraft owners and operators on the New Orleans Lakefront Airport (Airport) and to transient aircraft requiring fuel, hangar or other services at the New Orleans Lakefront Airport. [FAA Exhibit I, Item 38, pages 2-3] Flightline signed its initial lease with OLD on July 31,2007. [FAA Exhibit I, Item 38, page 3] 

### IV. FACTUAL BACKGROUND AND PROCEDURAL HISTORY Factual Background In late August 2005, Hurricane Katrina struck southeast Louisiana, causing severe damage to areas including the Lakefront Airport (Airport) in Orleans Parish, Louisiana. On July 31, 2007, ComplainantFlightline entered into a new lease withthe Airport. On April 8, 2008, a third party FBO, AeroPremier Jet Center, LLC (AeroPremier), entered into a different lease for other airportproperty with the Airport. These leases were entered into in aneffortto enhance the Airports' revenues and increase competition between and among the FBOs in an effort to make the Airport more self-sustainable. Throughout this time periodrepairs to certain hangars had been completed. [FAA Exhibit 1, Item 4, page 2] On August 13, 2009, the Airport issued a formal notice ofdefaultto AeroPremier for failure to pay rent. [FAA Exhibit I, Item 1, exhibit C-9, page 3] AeroPremier withheld these payments because the Airporthad not completed repairs to office space leased by AeroPremier, which the parties had agreed would be repaired bythe Airport within 14 months ofthe effective date ofthe lease. [FAA Exhibit 1, Item 4, pages 2-3] The Airport and AeroPremier agreedto "stay legal action pending discussions to resolve the issues betweenthem" with regard to the unpaid rent. [FAA Exhibit 1, Item I, exhibit C-9, page 2] On August 17,2009, AeroPremier and its investors, Advantage Partners 

### VI, LP and Advantage Capital Partnership XI, LP (Advantage Capital), filed a Petition for Breach ofContract and for Damages (Civil Suit) againstthe OLD in Orleans Parish Civil District Court, alleging that the Airport had breachedtheir lease by notremediating damaged office space that was leased to AeroPremier, which the parties had agreed would be repaired by the Airport within 14 months ofthe lease execution. [FAA Exhibit 1, Item 4, pages 3, see also Civil Suit, FAA Exhibit 1, Item 4, Exhibit R-5] As part ofthis litigation, both AeroPremier and the OLD commissioned reports calculating the losses sustained by AeroPremier due to the OLD's breach ofthe lease. The report commissioned by the OLD, prepared by Holly Sharp ofLaPorte, Sehrt, Romig and Hand, concluded estimates based on two different scenarios: 

### inone scenario, AeroPremier suffered $199,613 

### in lost profits, and inthe second scenario, AeroPremier suffered no lost profits. [FAA Exhibit I, Item 4, exhibit R-3, page 8] In the report commissionedbyAeroPremier, prepared by Harold Flanagan ofFlanagan Partners, AeroPremier sustained lost profits totaling $2,559,400. [FAA Exhibit I, Item 4, exhibit R-4, page 5]5


### OnNovember24, 2009, Flightline filed an informal Part 13 complaintwiththe FAA's Louisiana/New Mexico Airports District Office (ADO), alleging violations ofGrantAssurances, 22, 24, and 5 , and maintained that because the Airport Sponsor failed to maintain the airport suitably, AeroPremier was being allowed to function onthe Airport rent free giving AeroPremier an unfair competitive advantage. [FAAExhibit 1, Item 39, page 7] OnMarch 25, 2010, the ADO issuedpreliminary findings onthe informal complaint, stating that "we find that the Lakefront Airport sponsor is taking reasonable steps to cure the situation and at this time is in compliance with their grant assurances." [FAA Exhibit I, Item 39, page 3, 

### citing FAA Exhibit I, Item I, Exhibit C-28, page 2] On May 14, 20I0, the District Courtjudge hearing the civil suit issued a Judgment granted a Motion for Summary Judgment filed by AeroPremier, which resulted in OLD being found to be summarily inbreach ofthe lease between itselfand AeroPremier. [FAA Exhibit 1, Item 38, page 4, 

### citing FAA Exhibit I, Item 4, exhibit I, page 2] Following the issuance ofthis Judgment, the parties to the civil suit entered into mediation ofthe litigation, and on October I2, 2010, signed a Mutual Receipt, Release, and Indemnification Agreement (Settlement Agreement), settling the case for a total of$1,258,000. [FAA Exhibit I, Item 38, page 4, 

### citing FAA Exhibit I, Item 4, pages 3-5 and Settlement Agreement, FAA Exhibit I, Item 4, Exhibit R-2] In this Settlement Agreement, the parties agreed in part that: 

### J. The OLD shallprovide a $473,000 credit to AeroPremier, which may be applied to past or

future rent or any other obligation of AeroPremier to OLD. 2. The OLD shallprovide a $500,000 transferable rent credit to AeroPremier orAdvantage as they shall agree between the two of them, which credit may be applied to rent due at any time on Building JOJ on or afterAugust I, 

### 20Jl. The credit may be applied in the amount of up to $J00, 000peryear until exhausted. 3. The OLD waives andreleasesAeroPremier from the obligation under the Lease to invest $285,000 in 

### improvements to realproperty at the Airport. 4. The OLD waives andreleasesAeroPremier from the obligation under the Lease topay rent for Building JOJ, including the hangar,from August J, 20J0 until renovations of Building 1OJ (as a whole) are completed. 5. AeroPremier shall receive a rent credit for any leasedspace within Building JOJ, which ispresently in use byAeroPremier, to the extent such space is unusable due to OLD's construction/renovation activities resulting from Lessor's Repair Obligation. 6. OLD shall be responsiblefor the repair of damage to Building 1OJ which occurred as a result of Hurricane Katrina. OLD shall befurther responsiblefor the repair of damage to Building 10J which may occur as a result of the Lessor's Repair Obligation. 7. 

### The office andcustomer service space within Building J0Jshall [

..] be commercially acceptable office space suitablefor use as a FBO [

..]. 8. The OLD shall lease Building J03 to AeroPremier [.

..}. 9. Atany time before the expiration of2J months after completion of the Lessor's Repair Obligation, as defined herein, AeroPremier shall have the right to either sub-lease the 2nd floor of Building JOJ or to release the space to the OLD andthus exclude it from the Lease. J0. AeroPremier shall notpay for (i)

### parking or sod in

### public ally accessible areas and outside of the Airport fence (ii) carparking spaces it does not need. JJ. AeroPremier shall have access to terminal areas to the same extent as other FBOs,6 

### including without limitation, terminal ramp space for aircraft arrivals, departures and US. Customs. 12.

### AeroPremiershall have the right, at its sole option, to cancel the Lease of the McDermott facility[

..] effective upon 60 days' notice to OLD. [FAA Exhibit 1, Item 38, page 4, 

### citing FAA Exhibit 1, Item 27, Exhibit R-2, pages 2-3] The Settlement Agreement also contained provisions inparagraph 17 that stipulated the Agreement was subject to FAA approval. [FAA Exhibit I, Item 38, page 5, 

### citing FAA Exhibit 1, Item 4, Exhibit R-2, page 4] The parties also agreed to paragraph 14 in the Settlement Agreement that: 

### 14. The Parties agree that thisAgreement is intended to include a complete and final release of all claims that have been or could be asserted in the Lawsuit, the matter having been settledto their satisfaction. Notwithstanding the above, there is no release in thisAgreement for a (i) 

### breach of thisAgreement or (ii) a future breach of the Lease (as amended) or the FAA Sponsor assurances. [FAA Exhibit 1, Item 40, Exhibit R-2, page 3, 

### citing FAA Exhibit 1, Item 4, Exhibit R-2] On November 18, 2010, the FAA's Louisiana/New Mexico ADO provided comments regarding" concerns [the FAA] may have that could result in potential violations ofthe sponsor's grant assurance obligations." [FAA Exhibit 1, Item 33, page 1] These concerns included:

• The disparity between the two commissioned reports estimating AeroPremier's losses due to the breach ofcontract, which 

### "may result in an improper use of airport revenue if

the sponsor agrees toprovide unfounded compensation, subsidies, and/or set an improper fee schedule benefittingAeroPremier in violation of GrantAssurance 22, Economic Non Discrimination; 24, Fee andRental Structure; and25, Airport Revenue." [FAA Exhibit 1, Item 33, page 1] • The lack ofdocumentation submitted by AeroPremier regarding its losses and profits, which 

### "may lead to more violations of GrantAssurances 22 (Economic Nondiscrimination) and24 (Fee andRental Structure)." [FAA Exhibit I, Item 33, page 2] • Concerns that 

### "the sponsor may have or may be ceding its rights andpowers to operate and administer the airport by executing a settlement agreement that may allowAero Premier to make leasing decisions without the sponsor's approval or acknowledgment that such decisions are in accordance with the Airport Layout Plan and the sponsor's right to develop its airport[

..] GrantAssurance 5 (Preserving Rights andPowers) and GrantAssurance 29 (Airport LayoutPlan) may be affected by thisprovision." [FAA Exhibit 1, Item 33, page 2] On February 2, 2011, the Complainant, Flightline Ground, Inc. filed a formal Part 16 Complaint with the FAA, alleging that the Respondent, as sponsor ofthe Lakefront Airport has engaged in activity contrary to its Federal obligations. Inits Complaint, Flightline alleges that the Respondent has systematically and continuously permitted a competing FBO, AeroPremier, to7


### default on financial obligations to the Respondent, which has placed the Complainant at a competitive disadvantage. [FAA Exhibit 1, Item 1, 

### page 4] Complainant specifically alleges that the Respondent has violated 49 U.S.C., § 

### 47107(a) (5) and airport Grant Assurance 22(c), which requires that each FBO at the airport shall be subject to the same rates, fees, rentals, and other charges as are uniformly applicable to all other fixed based operators making the same or similar uses ofsuch airport and utilizing the same or similar facilities. The Complainant also alleges the Respondent has violated Grant Assurances 5, 24, 25, and 29. [FAA Exhibit 1, Item 1, pages 4-7] Procedural History 

### On February 2, 2011, the Complainant, Flightline Ground, Inc. filed a formal Complaint. [FAA Exhibit 1, Item 1] On February 22, 2011, the FAA issued a docketing notice and assigned docket number 16-11- 01 to the Complaint. [FAA Exhibit 1, Item 2] On March 15, 2011, the Respondent filed a motion for an extension oftime to file an Answer. [FAA Exhibit 1, Item 3] On March 22, 20 11, the Respondent provided its Answer to the Complaint. [FAA Exhibit 1, Item 4] On March 17, 2011, the Complainant filed a motion to alter the briefing schedule. [FAA Exhibit 1, Item 5] On March 17, 2011, the Complainant responded to the Respondent's motion for extension of time to file an Answer. [FAA Exhibit 1, Item 6] On March 17, 2011, the Complainant filed a motion to amend the style ofcase. [FAA Exhibit 1, Item 7] On March 21, 2011, the Complainant filed a motion to extend time to respond to the Respondent's Answer. [FAA Exhibit 1, 

### Item 8] On March 28, 2011, the Complainant filed a second motion to extend time to respond to the Answer ofthe Respondent. [FAA Exhibit 1, 

### Item 9] On April 6, 2011, the Airport Grant History for Lakefront Airport was added to the docket. [FAA Exhibit 1, Item 10] On April6, 2011, Complainant submitted its Response to the Respondent's Answer. [FAA Exhibit 1, Item 11] On April 5, 2011, Counsel for the Complainant submitted an Affidavit in support ofthe Complaint from Michael A. 

### Hodges, ABS Aviation Consultancy, Inc., d/b/a Airport Business Solutions. [FAA Exhibit 1, Item 12]On April13, 2011, Respondent filed a First Motion to Extend the Time to Rebut the Complainant's Response to the Answer ofthe Management Authority. [FAA Exhibit 1, Item 13] On April15, 2011, Complainant filed Notice ofthe Intention to Move to Amend Complainant's Response to the Answer ofthe Management Authority Based uponNewly Discovered Evidence. This submission includes exhibit C-66, dated Aprill3, 2011. [FAA Exhibit I, Item 14] On April21, 2011 the Complainant filed 3 additional pleadings: (1) Complainant's Notice ofThe Intention to Move to Amend Complainant's Response to the Answer ofthe Management Authority Based upon Newly Discovered Evidence, dated April 15, 2011. Includes exhibit C-66. (2) Complainant's Motion to Amend Complainant's Response to the Answer ofthe Management Authority Filed April 6, 2011. (3) Complainant's Amendment to Its Response to the Answer ofthe Management Authority Based upon Newly Discovered Evidence. [FAA Exhibit 1, Item 16] On April 22, 2011, Complainant filed an Amended Complaint. [FAA Exhibit 1, Item 15] 8

On April25, 2011, Complainant flied a Motionto Amend Complaint and includes exhibits C-66 through C-71. [FAA Exhibit 1, Item 17] On April27, 2011, Respondent filed a Motion to Suspend Procedural Process and, In the Alternative, For an Extension ofTime in Which to Respond. [FAA Exhibit 1, Item 18] On April29, 2011, the FAA issued a Notice ofExtension ofTime to Rebut the Complainant's Response to the Answer ofthe Management Authority, which extended the Rebuttal deadline to May 3, 2011. [FAA Exhibit 1, Item 19] On May 5, 2011, the FAA issued a Second Notice ofExtension ofTime regarding Respondent's Motion to Suspend Procedural Process to allow Respondent until June 3, 2011 to file its Rebuttal. [FAA Exhibit I, Item 20] On March 15, 2011, The Louisiana Department ofTransportation and Development answered and stated it is not a proper party to the Complaint as it does not have any legal authority over the Non-Flood Protection Asset Management Authority. Electronically signed and dated March 15,2011. [FAA Exhibit 1, Item 21] On April29, 2011, the Complainant filed a Briefin Opposition ofFlightline Ground, Inc. to Respondent's Motion to Suspend Procedural Process and in the Alternative, For an Extension ofTime within Which to Respond. Includes Exhibit A. [FAA Exhibit 1, Item 22] On May 2, 2011, Complainant filed a BriefIn Opposition ofFlightline Ground, Inc. To The Prayer In The Motion OfThe Louisiana Department OfTransportation And Development

### Requesting Dismissal, Dated May 2, 2011. [FAA Exhibit 1, Item 23] On March 24, 2011, the Complainant filed an Amendment to Correct Erratato the Complaint. [FAA Exhibit 1, Item 24] On June 2, 2011, the Respondent filed its Rebuttal to the Complainant's Response and Amended Response and Response to the Amended Complaint by the Management Authority, which includes Exhibit 1. [FAA Exhibit 1, Item 25] On September 15, 2011, the FAA issued a Notice ofExtension ofTime to December 20,2012. [FAA Exhibit 1, Item 34] On December 6, 2011, The Director ofthe Office ofAirport Compliance and Management Analysis issued a Request for Additional Information and Notice ofExtension ofTime. [FAA Exhibit 1, Item 26] On January 5, 2012, the Respondent provided a Submission ofDocuments in Response to the Request for Additional Information. [FAA Exhibit I, Item 27] 9



### On January 13, 2012, the Complainant filed a Motion to Strike or in

### the Alternative File Affidavit ofBrayton Matthews in Response to Respondent's Submission ofDocuments. [FAA Exhibit 1, Item 29] On January 13, 2012, the Complainant also submitted an affidavit from Brayton Matthews, Manager and Secretary ofFlightline Ground. [FAA Exhibit I, Item 28] On January 16, 2012, the Respondent filed an Opposition to Complainant's Motion to Strike or in the Alternative File Affidavit ofBrayton Matthews in Response to Respondent's Submission ofDocuments. [FAA Exhibit 1, Item 30] On February 21,2012,the FAA issued an Order Denying Motion to Strike and Granting Motion to File Affidavit, and Notice ofExtension ofTime. [FAA Exhibit 1, Item 31] On April2, 2012, the FAA issued a Notice ofExtension ofTime to June 30,2012. [FAA Exhibit I, Item 32] Letter dated November 18,2010, to Mr. Robert Lupo and Mr. Louis Capo from Andy Velayos, Lead Program Manager for FAA's Louisiana/New Mexico ADO regarding proposed settlement agreement between OLD and AeroPremier. [FAA Exhibit I, Item 33] On June 20,2012, the FAA issued a Notice ofExtension ofTime to August 31,2012. [FAA Exhibit I, Item 35] On August 27, 2012, the FAA issued a Notice ofExtension ofTime to September 17,2012. [FAA Exhibit 1, Item 36]On September 18,2012, the FAA issued a Notice ofExtension ofTime to October 12,2012. [FAA Exhibit I, Item 37] On October 16, 2012, the FAA issued the Director's Determination. [FAA Exhibit 

### 1, Item 38] 10

On November 14, 2012, the Complainant filed an Appeal to the Director's Determination. [FAA Exhibit 

### I, Item 39] OnNovember 29, 2012, the Respondent filed the Reply ofRespondent to the Appeal ofthe Complainant to the Director's Determination including Respondent Exhibits R-1 through R7. [FAA Exhibit 1, Item 40] On January 30,2013, the FAA issued a Notice ofExtension ofTime to on or about June 2, 2013. [FAA Exhibit 1, Item 41] On March 7, 2013, the Complainant submitted an Objectionto Failure ofthe Associate Administrator to Issue a Final Decision Even with the Extended Time Limits. [FAA Exhibit 1, Item 42] On June 7, 2013, the FAA issued a Notice ofExtension ofTime to on or about September 16, 2013. [FAA Exhibit 1, Item 43] On June 20, 2013, the Complainant submitted an Objection to Failure ofthe Associate Administrator to Issue a Final Decision Even with the Extended Time Limits. [FAA Exhibit 1, Item 44] On September 17, 2013, the FAA issued a Notice ofExtension ofTime to on or about January 31,2014. [FAAExhibit1,Item45] On September 24,2013, the Complainant submitted an Objection to Failure ofthe Associate Administrator to Issue a Final Decision Even with the Extended Time Limits. [FAA Exhibit 1, Item 46] On January 30,2014, the FAA issued a Notice ofExtension ofTime to on or about June 2, 2014. [FAA Exhibit 1, Item 47] On May 29, 2014, the FAA issued a Notice ofExtension ofTime to on or about October 1, 2014. [FAA Exhibit I, Item 48] V. APPLICABLE FEDERAL LAW AND FAA POLICY The Federal role in civil aviation has been augmented by various legislative actions that authorize programs for providing Federal funds and other assistance to local communities for the development ofairport facilities. In each such program, the airport sponsor assumes certain obligations, either by contract or by restrictive covenants in property deeds and conveyance instruments, to maintain and operate its airport facilities safely and efficiently and in accordanceII

with specified conditions. Commitments assumed by airport sponsors inproperty conveyance or grant agreements are important factors in maintaining a high degree ofsafety and efficiency in airport design, construction, operation and maintenance, as well as ensuring the public fair and reasonable access to the airport. The following is a discussion pertaining to the Airport Improvement Program, Airport Sponsor Assurances, the FAA Airport Compliance Program, enforcement ofAirport Sponsor Assurances, and the Complaint and Appeal Process. The Airport Improvement Program Title 49 U.S.C. § 47101, etseq., provides for Federal airport financial assistance for the development ofpublic-use airports under AlP established by the Airport and Airway Improvement Act of 1982 (AAIA), as amended. Title 49 U.S.C. § 47107, et seq., sets forth assurances to which an airport sponsor agrees as a condition ofreceiving Federal financial assistance. Upon acceptance ofan AlP grant, the assurances become a binding contractual obligation betweenthe airport sponsor and the Federal Government. The assurances made by airport sponsors in AIP grant agreements are important factors in maintaining a viable national airport system. Airport SponsorAssurances As a condition precedent to providing airport development assistance under AAIA, codified at Title 49 U.S.C. § 47101, et seq., the Secretary ofTransportation receives certain assurances from the airport sponsor. The AAIA, 49 U.S.C.§ 47101, et seq., sets forth assurances to which an airport sponsor receiving Federal financial assistance must agree as a condition precedent to receipt ofsuch assistance. These sponsorship requirements are included in every AlP grant agreement. Upon acceptance ofan AIP grant by an airport sponsor, the assurances become a binding obligation between the airport sponsor and the Federal Government. Six grant assurances are relevant to the Complainant's appeal: Grant Assurance 5, Preserving Rights andPowers; Grant Assurance 19, Operation andMaintenance; Grant Assurance 22, Economic Nondiscrimination; Grant Assurance 23, Exclusive Rights; Grant Assurance 24, Fee andRental Structure; and Grant Assurance 29, AirportLayoutPlan. Grant Assurance 5, PreservingRights andPowers Grant Assurance 5, PreservingRights andPowers 1

, requires the airport owner or sponsor to retain all rights and powers necessary to ensure the continued operation ofthe airport consistent with its Federal obligations. This assurance implements the provisions ofAAIA, 49 U.S.C. § 47107(a), et seq., and requires, inpertinent part, thatthe owner or sponsor ofa federally obligated airport "

...will not take or permit any action which would operate to deprive it ofany of

1 See, e.g., the Federal Aviation Act of1958, as amended and recodified, Title 49 U.S.C. §§ 40101, 40113, 40114, 46101, 46104, 46105, 46106, 4611 0; and the Airport and Airway Improvement Act of 1982, as amended and recodified, Title 49 U.S.C. §§ 47105(d), 47106(d), 47107(k), 47107(1). 471II(d), 47122.12
the rights and powers necessary to perform any or all ofthe terms, conditions, and assurances in the grant agreement without the written approval ofthe Secretary, and will act promptly to acquire, extinguish ormodifY any outstanding rights or claims ofright ofothers which would interfere with such performance by the sponsor." FAA Order 5190.6A,Airport Compliance Requirements, describes the responsibilities under Grant Assurance 5 assumed by the owners or sponsors ofpublic-use airports developed with Federal assistance. Among these is the responsibility for enforcing adequate rules, regulations, or ordinances as are necessary to ensure the safe and efficient operation ofthe airport. [See Order 5190.6A, Sec

.. 4-7 and 4-8.] 

### 2. GrantAssurance 19, 

### Operation andMaintenance Grant Assurance 19, Operation andMaintenance, requires, in pertinentpart, The airport andall facilities which are necessary to serve the aeronautical users of the airport,

...shall be operatedat all times in a safe andserviceable condition and in accordance with the minimum standards as may be required orprescribedby applicable federal, state andlocal agencies for maintenance andoperation. It will not cause orpermitany activity or action thereon which would interfere with its usefor airportpurposes. 

### 3. GrantAssurance 22,

### EconomicNondiscrimination Grant Assurance 22, Economic Nondiscrimination, requires the owner ofany airport developed with Federal grant assistance to operate the airport for the use and benefit ofthe public and to make it available to all types, kinds, and classes ofaeronautical activity on fair and reasonable terms, and without unjust discrimination. Grant Assurance 22 deals with both the reasonableness ofairport access and the prohibition ofadopting unjustly discriminatory conditions as a potential for limiting access. Grant Assurance 22 implements the provisions ofTitle 49 U.S.C. 

### §47107(a)(l) through (6), and requires, inpertinent part: [The airport owner or sponsor] will make its airport available as an airport forpublic use on reasonable terms, andwithout urljust discrimination, to all types, kinds, andclasses of aeronautical activities, including commercial aeronautical activities offering services to the public at the airport. [Assurance 22(a).]

... eachjixed-base operator at the airport shall be subject to the same rates,fees, rentals, and other charges as are uniformly applicable to all other fixed-based operators making the same or similar uses of such airport andutilizing the same or similar facilities. [Assurance 22( c).] [The airport owner or sponsor] may establish such reasonable andnot unjustly discriminatory conditions to be met byall users of the airport as may be necessary for the safe andefficient operation of the airport. [Assurance 22(h).] [The airport owner or sponsor] may ...limit anygiven type, kind, or class of aeronautical use of the airport if such action is necessary for the safe operation of the airport or necessary toserve the civil aviation needs of thepublic. [Assurance 22(i).] Subsection (h) qualifies subsection (a), and subsection (i) represents an exceptionto subsection (a) to permitthe sponsor to exercise control ofthe airport sufficient to preclude unsafe and inefficient conditions that would be detrimental to the civil aviation needs ofthe public. In all cases involving restrictions on airport use imposed by airport owners for safety and efficiency reasons, the FAA will make the final determination onthe reasonableness ofsuch restrictions when those restrictions deny or limit access to, or use of, the airport. [See FAA Order 5190.6B, section 14.3.] 13

FAA Order 5190.6B describes the responsibilities under Grant Assurance 22 assumed by the owners or sponsor ofpublic use airports developed with Federal assistance. Among these is the obligation to treat in a uniform manner those users making the same or similar use ofthe airport and to make all airport facilities and services available onreasonable terms without unjust discrimination. [See FAA Order 5190.6B, Chapter 9.] The owner ofan airport developed with Federal assistance is required to operate the airport for the use and benefit ofthe public and to make it available to all types, kinds, and classes of aeronautical activities on reasonable terms and without unjust discrimination. [See FAA Order 5190.6B, section 9.l.(a).] 

### 4. GrantAssurance 24, Fee andRentalStructure Grant Assurance 24, Fee andRental Structure, implements the provisions ofthe AAIA, Title 49 U.S.C. § 47107(a)(13), andrequires, inpertinentpart, that the sponsor ofa federally obligated airport assure: It will maintain a fee andrental structure for thefacilities andservices at the airport which will make the airport as self-sustaining aspossible under the circumstances existingat theparticular airport, taking into account suchfactors as the volume of traffic andeconomy of collection. Grant Assurance 24 addresses fees the owner or sponsor levies on airport users in exchange for the services the airport provides and satisfies the requirements of§ 47107(a)(l3) by addressing self-sustainability. The intent ofthe assurance is for the airport operator to charge fees that are sufficient to cover as much ofthe airport's costs as is feasible while maintaining a fee and rental structure consistent with the sponsor's other Federal obligations. In addition, FAA Order 5190.6B states: To aid in establishing uniform rates andcharges applied to aeronautical activities on the airport, the sponsor shouldestablish minimum standards to be met as a condition for the right to conduct an aeronautical activity on the airport. [FAA Order 5190.6B at Section 9.6.e.]

### 5. GrantAssurance 25,AirportRevenues Grant Assurance 25,AirportRevenues, implements provisions ofTitle 49 U.S.C. § 47107(b) and § 47133, et seq., and requires, inpertinent part, that the sponsor ofa federally obligated airport assure:

a. Allrevenues generated by the airport andany local taxes on aviation foel establishedafterDecember 30, 1987, will be expendedby it for the capital or operating costs of the airport,· the local airport system; or other local facilities which are owned or operatedby the owner or operator of the airport andwhich are directly andsubstantially related to the actual air transportation of passengers orproperty; or for noise mitigationpurposes on or off the airport. b. Aspart of the annual audit required under the Single AuditActof 1984, the sponsor will direct that the audit will review, andthe resulting audit report will provide an opinion concerning, the use of airport revenue andtaxes inparagraph (a), and indicatingwhether fundspaidor transforredto the owner or operator are paidortransferred in a manner consistent with Title 49, United States Code and any other applicableprovision of law, including any regulationpromulgatedby the Secretary orAdministrator.

c. Anycivilpenalties or other sanctions will be imposed for violation of this assurance in accordance with theprovisions of Section 47107 of Title 49, United States Code. 14

FAA's Policy and Procedures Concerning the Use ofAirport Revenues (64 Fed. Reg. 7696, February 16, 1999) (Revenue Use Policy) provides, among other things, the FAA's policy onthe use ofairport revenue. Itprovides, 

### inrelevant part, that: All fees, charges, rents, or otherpayments received by or accruingto the sponsor for any one of the following reasons are considered to be airport revenue: Revenue from sponsor activities on the airport. Airport revenue generally includes all revenue received by the sponsor for activities conductedby the sponsor itself as airport owner andoperator, including revenue received; i. From any activity conductedby the sponsor on airportproperty acquiredwith federal assistance; ii. From any aeronautical activity conductedby the sponsor which is directly connected to a sponsor's ownership of an airport subject to 49 USC.§ 47107(b) or 47133; oriii. From any nonaeronautical activity conductedby the sponsor on airport property not acquiredwith federal assistance, but only to the extent of thefair rental value of the airportproperty. Thefair rental value will be basedon the fair market value. [See Revenue Use Policy at Section II.B.l.b., 64 Fed. Reg. 7696, 7716] 

### 6. Grant Assurance 

### 29,AimortLavoutPlan Grant Assurance 29,AirportLayoutPlan, implements provisions ofTitle 49 U.S.C. § 47107(a)(l6), and requires that the sponsor ofa federally obligated airport assure:

a. It will keep up to date atall times an AirportLayoutPlan of the airport showing (I) boundaries of the airport andallproposedadditions thereto, together with the boundaries of all offiite areas ownedor controlledby the sponsor for airportpurposes and proposedadditions thereto; (2) the location andnature of all existing and proposedairport facilities andstructures (such as runways, taxiways, aprons, terminal buildings, hangars, androads), including allproposed extensions andreductions of existing airport facilities; and (3) the location of all existingand proposednon-aviation areas and of all existing improvements thereon. SuchAirportLayoutPlans andeach amendment, revision, or modification thereof shall be subject to the approval of the Secretary which approval shall be evidencedby the signature of a duly authorizedrepresentative of the Secretary on the face of the AirportLayoutPlan. The sponsor will not make orpermit any changes or alternations in the airport or any of its facilities that are not in conformity with theAirportLayoutPlan as approvedby the Secretary and which might, in the opinion of the Secretary, adversely affect the safety, utility, or efficiency of the airport. b.lf a change or alteration in the airport or the facilities is made which the Secretary determines adversely affects the safety, utility, or efficiency of any federally owned, leased, or fundedproperty on or off the airport andwhich is not in conformity with theAirportLayoutPlan as approved by the Secretary, the owner or operator will, 

### if requested by the Secretary (1) eliminate such adverse effect in a manner approvedby the Secretary; or (2) bear all costs of relocating suchproperty (or replacement thereof) to a site acceptable to the Secretary and all costs of restoring suchproperty (or replacement thereof) to the level of safety, utility, efficiency, andcost of operation existing before the unapproved change in the airport or its facilities. 15

Specifically, Grant Assurance 29 requires the airport owner or sponsor to keep its Airport Layout Plan (ALP), which is a planning tool for depicting current and future airport use, up to date. Grant Assurance 29 prohibits the airport owner or sponsor from making orpermitting any changes or alterations in the airport or any ofits facilities that are not in conformity with its

### FAA-approved ALP. The FAAAirport Compliance Program The FAA discharges its responsibility for ensuring that airport sponsors comply with their Federal obligations through its Airport Compliance Program. Sponsor obligations are the basis for the FAA's airport compliance effort. The airport owner accepts these obligations when receiving Federal grant funds or when accepting the transfer ofFederal property for airport purposes. The FAA incorporates these obligations in grant agreements and instruments ofconveyance to protect the public's interest in civil aviation and to ensure compliance with Federal laws. 16



### The FAA designed the Airport Compliance Program to ensure the availability ofa national system ofsafe and properly maintained public-use airports which airport sponsors operate in a manner consistent with their Federal obligations and the public's interest in civil aviation. The Airport Compliance Program does not control or direct the operation ofairports. Rather, it monitors the administration ofvaluable rights, which airport sponsors pledge to the people ofthe United States in exchange for monetary grants and donations ofFederal property, to ensure that airport sponsors serve the public interest. Order 5190.6B, FAA Airport Compliance Manual (September 30, 2009) sets forth policies and procedures for the FAA Airport Compliance Program. The Order is not regulatory and is not controlling with regard to airport sponsor conduct; rather, it establishes the policies and procedures for FAA personnel to follow in carrying out the FAA's responsibilities for ensuring airport compliance. It 

### provides basic guidance for FAA personnel in interpreting and administering the various continuing commitments airport owners make to the United States as a condition for the grant ofFederal funds or the conveyance ofFederal property for airport purposes. The Order, inter alia, analyzes the various obligations set forth in the standard airport sponsor assurances, addresses the application ofthe assurances in the operation ofpublic-use airports, and facilitates interpretation ofthe assurances by FAA personnel. The FAA Compliance program is designed to achieve voluntary compliance with Federal obligations accepted by owners and/or operators ofpublic-use airports developed with FAA administered assistance. Therefore, in 

### addressing allegations ofnoncompliance, the FAA will make a determination as to whether an airport sponsor is currently in compliance with the applicable Federal obligations. Consequently, "the FAA 

### will consider the successful action by the airport to cure any allegedorpotentialpastviolation of applicable ftderal obligations to be grounds for dismissal of such allegations. " [See Wilson Air Center v. Memphis and Shelby County Airport Authority, FAA Docket No. 16-99-10, (August 30, 2001) (Final Decision and Order), page 5.] 

### The Complaint Process Pursuant to 14 CPR, Part 16, § 16.23, a person directly and substantially affected by any alleged noncompliance may file a complaint with the FAA. The complainant shall provide a concise butcomplete statement ofthe facts relied upon to substantiate each allegation. The complaint shall also describe how the complainant was directly and substantially affected by the things done or omitted by the respondents. [14 CPR, Part 16, § 16.23(b)(3,4).] If, based on the pleadings, there appears to be a reasonable basis for further investigation, the FAA will investigate the subject matter ofthe complaint. Inrendering its initial determination, the FAA may rely entirely on the complaint and the responsive pleadings provided. Each party shall file documents that it considers sufficient to present all relevant facts and arguments necessary for the FAA to determine whether the sponsor is in compliance. [14 CPR, Part 16, § 16.29.] 17

The proponent ofa motion, request, or order has the burden ofproof. A party who has asserted an affirmative defense has the burden ofproving the affirmative defense. This standard burden ofproofis consistent with the Administrative Procedure Act (APA) and Federal case law. The APA provision states, "[ e]xcept as otherwise provided by statute, the proponent ofa rule or order has the burden ofproof." [5 U.S.C. § 556(d).] [See also, Director, Office ofWorker's Compensation Programs, Department ofLabor v. Greenwich Collieries, 512 US 267,272 (1994); Air Canada et 

### al. v. Department ofTransportation, 148 F3d 1142, 1155 (DC Cir, 1998).] Title 14 CPR§ 16.229(b) is consistent with 14 CPR§ 16.23, which requires that the complainant submit all documents then available to support his orher complaint. Similarly, 14 CPR § 16.29 states that "[e]ach party shall file documents that it considers sufficient to present all relevant facts and argument necessary for the FAA to determine whether the sponsor is in compliance." 

### Right to Appeal the Director's Determination A party to the Complaint adversely affected by the Director's Determination may file an appeal with the Associate Administrator within 30 days after the date ofservice ofthe initial determination. Ifno appeal is filed within the time period specified, the Director's Determination becomes the final decision and order ofthe FAA without further action. A Director's Determination that becomes fmal because there is no administrative appeal is not judiciallyreviewable. [14 CFR, Part 16, § 16.33] Part 16 requires all relevant facts to be presented in the complaint documents. [14 CFR, Part 16, § 16.23(b)(3).] New allegations or issues should not be presented on appeal. Review bythe Associate Administrator is limited to an examination ofthe Director's Determination and the administrative record upon which such determination was based. Under Part 16, Complainants are required to provide withthe complaint and reply all supporting documentation upon which it relied to substantiate its claims. Failure to raise all issues and allegations in the original complaint documents may be cause for such issues and allegations to be deemed waived and not reviewable upon appeal. This is consistent withthe Supreme Court's recognition that courts may require administrative issue exhaustion as a general rulebecause it is usually appropriate under an [administrative] agency's practice for contestants in an adversarial proceeding before it to develop fully all issues there. The Court concluded that where parties are expected to develop the issues in an adversarial administrative proceeding, the rationale for requiring issue exhaustion is at its greatest. [See Sims v. Apfel, 530 US 103, 108-110 (2000) citing Hormel v.Helvering, 312 US 552 (1941) and US v. LA Tucker Truck Lines, 344 US 33, (1952).] 

### FAA's Responsibility with Regard to an Appeal Pursuant to 14 CFR, Part 16, § 16.33, the Associate Administrator will issue a final decision on appeal from the Director's Determination, without a hearing, where the complaint is dismissed after investigation. 18

In such cases, it is the Associate Administrator's responsibility to determine whether (a) the findings offact made by the Director are supported by a preponderance ofreliable, probative, and substantial evidence, and (b) each conclusion oflaw is made in accordance with applicable law, precedent, and public policy. [See e.g. Ricks v Millington Municipal Airport, FAA Docket No. 16-98-19, (December 30, 1999) (Final Decision and Order) p. 21; and 14 CFR, Part 16, § 16.227.] VI. ANALYSIS AND DISCUSSION Upon consideration ofthe Complaint, the Director ofthe Office ofAirport Compliance and Management Analysis determined that the Authority is not currently in violation ofFederal obligations under Grant Assurances 5, Rights andPowers; 19, Operation andMaintenance; 22, Economic Nondiscrimination; 24, Fee andRentalStructure; 25,AirportRevenues; and 29, AirportLayoutPlan. On appeal, the Associate Administrator for Airports upholds the Director's Determination based on each conclusion oflaw made in accordance with applicable law, precedent, and public policy. The Associate Administrator for Airports finds that the Director omitted analysis on certain facts in the exhibits that otherwise would have made the same determination in accordance with applicable law, precedent, and public policy. 1. 

### WhetherRespondent violated GrantAssurance 5, Rights and Powers and/or Grant Assurance 29, Airport LayoutPlan, by allowing AeroPremierthe right to sublease the second floor ofBuilding 101 (Building 101 or NG Hangar) without seeking prior permission from the Respondent and (2) grantingAeroPremier the right atits sole option to cancel the lease ofthe McDermott facility. The Director found and concluded that the Airport had not violated Grant Assurance 5, Rights and Powers and/or Grant Assurance 29, Airport Layout Plan, by (1) allowing AeroPremier the right to sublease the second floor ofthe NG Hangar without seeking prior permission from the Airport or (2) granting AeroPremier the right at its sole option to cancel the lease ofthe McDermott facility. [FAA Exhibit l, Item 38, page 38] However, the Director strongly encouraged OLD that ifthe permission to sublease the 2nd floor ofthe NG Hangar results in a sublease for a nonaeronautical purpose without approval by the FAA, or ifAeroPremier were to cancel its lease ofthe McDermott facility without OLD oversight, OLD could be found in noncompliance under Grant Assurances 5 and 29. [FAA Exhibit 1, Item 38, pages 18-19] In citing the FAA Order 5190.6B, the Director also strongly encouraged the Respondent to,19

"place a 'subordination clause' in all ofits tenant leases and agreements that subordinates the terms ofthe lease or agreement to all current and future Federal grant assurances and surplus property obligations. A subordination clause may assist the Sponsor in amending a tenant lease or agreement that otherwise deprives the sponsor ofits rights and powers. A typical subordination clause states that ifthere is a conflict between the terms ofa lease and the Federal grant assurances, the grant assurances will take precedence and govern." [FAA Exhibit I, Item 38, page 18. See also FAA Order 5190.6B, Paragraph 6.6, page 6-2] The Complainant appealed the Director's Determination with respect to Grant Assurance No. 5 for the reason that the Sponsor's conferring on Aero Premierthe right to sublease Building I01 would operate to deprive it ofany ofthe rights andpowers necessaryto perform any and all ofthe terms, conditions, and assurances ofthe grant agreement without the written approval ofthe Secretary, in violation ofGrant Assurance No.5. [FAA Exhibit 1, Item 39, page 22]. The Complainant further appealed and stated "that in light ofthis uncontradicted status ofthe record, no other reasoned conclusion is possible other than the Sponsor ceded rights and powers to AeroPremier to sublease Building 101 and terminate the lease on the McDermott Facility." [FAA Exhibit 1, Item 39, page 48] The Complainant continues to make an argument about the Mutual Receipt, Release and Indemnification Agreement (hereinafterthe 'Settlement Agreement') executed betweenthe Sponsor, AeroPremier and the Advantage Capital entities dated October 12, 2010. [FAA Ex. 1, Item 39, page 47] Paragraphs 9 and 12 states: 9. Atany time before the expiration of21 months after completion of the lessors repair obligation, as defined herein, AeroPremier shall have the right to either sub-lease the second floor of Building 101 or to release the space to the OLD and thus exclude it from the lease; 12. AeroPremier shall have the right, at its sole option, to cancel the lease of the McDermott Facility (definedas MTNorthApron, MTHangar Deck, MT Office/Shop, MTSouthApron, MTParkingAreas [east of North Apron, east of Office/Shop, andeast of SouthApron]) effective upon 60 days' notice to OLD

... The Complainant contends that Paragraphs 9 and 12 in the Settlement Agreement were the preciseprovisions in the document that Andy Velayos ofthe FAALouisiana/New Mexico ADO was referencing when he cautioned the Sponsor: "the right to sublease certain space should be subordinate to the grant agreements." [FAA Ex. 1, Item 39, page 48]. The Complainant further contends that Mr. Velayos warned the Sponsorthat ifit did sign the Settlement Agreement without subordinating AeroPremier's rights to sublease Building 101 the Sponsorwould "be ceding its rights and powers to operate and administerthe airport

...

### inaccordance with the airport layout plan." [FAA Ex. I, Item 39, page 48]. The Complainant also argues that Mr. Velayos was notthe only person to comment about paragraphs 9 and 12 ofthe Settlement Agreement [FAA Ex. I, Item 27, Ex. R-2] The Complainantidentified their ownexpertwitness, Michael Hodges, and suggested that there is agreement with Mr. Velayos as he testified inthis Affidavit:

... Inparagraph 9 of the SettlementAgreement, the Sponsor hasgiven AeroPremier the right to sublease the second floor of the office space within the NGHangar without first obtainingpermission from the Sponsor. This is a clear violation of GrantAssuranceNo. 5 (Preserving Rights andPowers) and is also a violation of GrantAssuranceNo. 29 (the AirportLayoutPlan)

.

. . . Inparagraph 12 of the SettlementAgreement, the Sponsor givesAeroPremier the right to cancel the lease on the McDermott-Tidewater Hangar. This violates GrantAssurance Nos. 5 and29 for the reasons discussed above in myassessment of paragraph 9 of the SettlementAgreement. [FAA Exhibit 1, Item 39] The Complainant specifically stated that "No subordination clauses appear (in paragraphs 9 or 12." (Emphasis in original) The Complainant further argued "despite warnings from 20

Mr. Velayos that paragraphs 9 and 12 ofthe Settlement Agreement should have subordination language inserted to avoid violations ofGrant Assurance Nos. 5 and 29 the Settlement Agreement was executed bythe Sponsor without inserting subordination clauses." [FAA Ex. 1, Item 39, page 48, citing FAA Exhibit I, Item 27, Exhibit R-2]. In the Respondents' Reply to the Complainant's Appeal, the Respondent wrote that "it agreed with and fully accepted the admonition ofthe Directorthat Grant Assurance 5 requires that subleases should be subject to sponsor concurrence and that any sublease to a non-aeronautical tenant in Building 101 without FAA concurrence would subject the sponsor to a potential violation ofGrant Assurance 5." [FAA Exhibit I, Item 40, page 3] The Respondent further identified that "the parties to the Settlement understood that FAA approval would be necessary for at least some of the terms ofthe agreement and therefore made the agreement subject to FAA approval." [FAA Exhibit 1, Item 40, page 3, citingFAAExhibit I, Item 4, Exhibit R-2, page 4, Para.l7]. The Complainant's arguments thatthe Airport Sponsor

### had not subordinatedthe agreements totheFAA grant assurances are notpersuasive and haveno merit. Asnoted 

### inthe FactualBackground section of the Director's Determination, the SettlementAgreement states: The SettlementAgreement also contained the condition that it was subject to FAA approval. [FAA Exhibit 1, Item 38, page 5, citing FAA Exhibit 1, Item 4, Exhibit R-2, page 4} Close review ofthe Settlement Agreement revealed additional language reflecting the subordination ofthe Settlement Agreement to the grant assurances. Although not expressly set forth 

### inParagraphs 9 and 12 in the Mutual Receipt, Release and Indemnification Agreement, Paragraph 14 ofthat Agreement states: 14. The Parties agree that thisAgreement is intended to include a complete and final release of all claims thathave been or couldhave been assertedin the Lawsuit, thematter havingbeen settledto their satisfaction. Notwithstanding the above, there is no release in thisAgreement for a (i) breach of thisAgreementor (ii) a foture breach of the Lease (as amended) or the FAA Sponsor assurances. [FAA Exhibit 1, Item.40, ExhibitR-2,page 3, citingFAAExhibit 1, Item4, ExhibitR-2] 21

The language in Paragraph 14 unambiguously subordinated all the terms and conditions ofthe entire Settlement Agreement to the grant assurances. The parties had negotiated that ifthere is a conflict between the terms ofthe Settlement Agreement, the grant assurances will take precedence and govern. This subordination clause clearly permits the Airport Sponsor to amend the Settlement Agreement ifthere is a conflict that otherwise could deprive the sponsor ofits rights and powers with AeroPremier. [See FAA Order 5190.6B, Paragraph 6.6 (a), page 6-2] Thus, the Airport Sponsor had inserted specific language in their documents throughout its legal negotiations to ensure that it had sufficient control over the airport in order to maintain compliance with the grant assurances 2 Subsequent to the issuance ofthe Director's Determination, in its

**Answe~** to the Complainant's Appeal the Respondent stated: "the Respondent had consented to the assignment and assumption ofAeroPremier's lease to another new airport lessee, Hawthorne Aviation. Hawthorne, prior to any sublease being entered into, released the second floor ofBuilding 101, to the Old and excluded it from the Lease. Hawthorne has also made the decision not to cancel the lease on the McDermott Hangar." [FAA Exhibit 1, Item 40, Pages 2-3] The Respondent's consent to the assignment ofthe AeroPremier lease demonstrates the Respondent's understanding ofits Federal obligations and further strengthens the argument that the Airport Sponsor acted appropriately in subordinating the agreement to the grant assurances. Consequently, the Associate Administrator for Airports finds thatthe lack ofa discussion of Paragraph 14 ofthe Settlement Agreement in the Director's Determination is a harmless error. The FAA notes that the Complainant also failed to discuss the subordination clause (Paragraph 14) in the Settlement Agreement in his initial and amended Complaints and subsequent arguments. The Associate Administrator finds that the Director ultimately made the correct determination inthis matter and thatthe airport sponsor is in compliance with Grant Assurance 5, Rights and Powers, and Grant Assurance 19, Airport Layout Plan, with regards to the above ISSUe. Based upon the Respondent's consent to the Assignment ofthe AeroPremier Lease to Hawthorne and actions taken by Hawthorne, the Associate Administrator finds that the Complainant's claims concerning (1) allowing AeroPremier the right to sublease the second floor ofthe NG Hangar without seeking prior permission from the Airport and (2) granting AeroPremier the right at its sole option to cancel the lease ofthe McDermott facility also can be considered resolved. Therefore, the Associate Administrator for Airports upholds the Director's Determination concerning this issue.

2 A method asponsor may use in this regard is to place a "subordination

**cla~e"** in all ofits tenant leases and agreements that subordinates the tenns ofthe lease or agreement to the federal grant assurances and surplus property obligations. See FAA Order 5190.6B, Paragraph 6.6(a). See also Platinum Aviation and Platinum Jet Center BMI v. BloomingtonwNormal Airport Authority issued November 28,2007 (FAA 16-06-09 and Gina Michelle Moore v. Sumner County Regional Airport Authority issued February 27,2009 (FAA

**16-07~160).**22



### 2. Whether theRespondent is in violation ofGrantAssurance 19, Operation and Maintenance by (1) failing to operatethe airport suitably because Respondents did not restore the National Guard Hangarwithin 14 months ofthe effective date ofthe Respondents lease with AeroPremier and/or (2) allowing the airport to deteriorate and to become a safety hazard because ofan open drainage area and changes to an onairport maintenance schedule. The Director was not persuaded that the Respondent violated Grant Assurance 19, Operations and Maintenance, by failing to restore the NG Hangar with 14 months ofthe effective date ofthe Respondent's lease with AeroPremier. [FAA Exhibit I, Item 38, page 21] The Director found that the repairs were dependent 

### inpart upon the receipt ofFEMA funds. When those funds were not available as anticipated, the delay inrepairing theNG Hangar with the lease provisions did not result in a violation ofGrant Assurance 19. [FAA Exhibit 1, Item 38, page 24] The Director also found the allegations and evidence presentedby Complainantregarding an open dnrin areaonthe airport ramp and changes to an on-airportmaintenance schedule are insufficientto conclude thatthe Respondent has so neglected the facilities at the Airport as to rise to a violation ofGrant Assurance 19. [FAA Exhibit I, Item 38, page 24] The Director found that repairs andreconstruction as a result ofHurricane Katrina may not necessarily have been completed as timely as desired. However, rather than a violation of Grant Assurance 19, this issue is instead a potential breach oflease betweenthe contracted parties (in this case, AeroPremier and the OLD) and was more appropriately addressed in state court. [FAA Exhibit 1, Item 38, page 23] Grant Assurance 19 specifically states that: "nothing herein shall be construedas requiring the maintenance, repair, restoration, or replacement of any structure or facility which is substantially damaged or destroyeddue to an act of Godor other condition or circumstance beyondthe control of the sponsor." [Assurance 19] The Director found that the Respondent was confronted with not only physical damage to the Airport, but also with the need to coordinate with Federal agencies to provide additional financial aid to allow repair and reconstruction. [FAA Exhibit 1, Item 38, page 22] Although an acceptable level ofmaintenance is difficult to express objectively, the FAA will consider a general aviation airport compliantwith its Federal maintenance obligation whenthe sponsor:

... Fully understands thatairport facilities mustbe kept in a safo andserviceable condition.

... Makes available the equipment, personnel,

### fonds, andotherresources, including contract arrangements, to implement an effective maintenanceprogram.

... Adoptsandimplements a detailed program of cyclical preventive maintenance adequate to carry outthis commitment.23 [FAA Order 5190.6B,

**~** 7.5] The Director also found that the Complainant could not explain why the failure to timely repair the NG Hangar resulted in failure to operate and maintain the Airport as required by Grant Assurance 19. [FAA Exhibit I, Item 38, page 22] The Director further found "the Complainant has not shown that the Respondent failed to understand that the airport must be kept in a safe and serviceable condition, or failed to make resources available as those resources were made available to the Respondent." [FAA Exhibit I, Item 38, page 23] Finally, the Director found that the Complainant failed to allege the Respondent has failed to carry out a detailed preventative maintenance program. [FAA Exhibit I, Item 38, page 23] The Complainant appealed the Director's Determination based on several issues. The Complainant objects to the Director's finding that FEMA funds were not available to effect repairs to the NGHangar, since Complainant cited that the Director refused to address evidence in record showing the money to renovate the NG Hangar had been available since 2006. [FAA Exhibit 1, Item 39, page 45] The Complainant further contends not only was the FEMA newspaper story cited to the Director in Complainant's Amended Complaint but that the unsworn nature ofthe evidence did not diminish its credibility. [FAA Exhibit 1, Item 39, page 54] Accordingly, the Complainant contends the Director's Determination that FEMA funds were unavailable is not supported by substantial evidence. [FAA Exhibit I, Item 39, page 53]. In explaining why no Grant Assurance 19 violation was found, the Director wrote: The Complainant has notshown that the Respondent failed to understand that the airport must be kept in a safe andserviceable condition, or failed to make resources available as though resources were made available to Respondent. Nor has the Complainant allegedthat the Respondent has failed to carry out a detailedpreventative maintenanceprogram. [FAA Exhibit 1, Item 38, page 23] Furthermore, the Director again in denying a violation ofGrant Assurance 19 wrote: The Director is notpersuadedthatRespondent violated GrantAssurance 19, operations andmaintenance, by failing to meetself-imposeddeadlines to repair the NGHangar. The Respondent's repairs were dependent inpart upon receipt of FEMAfonds; when thosefunds were not available as anticipated the delay in the NG Hangar didnot result in a violation of Grant 19. The Director alsofinds that the allegations andevidencepresentedby the Complainant regarding an open drain area on the airport ramp and changes to an on-airport maintenance schedule are insufficient to conclude that the Respondent has so neglected the facilities at the Airportas to rise to a violation GrantAssurance 19. [FAA Exhibit 1, Item 38, page 24]. The Complainant argued that there was no sworn testimony in the record thatFEMAfunds were not available. The Complainant contends thatthere was evidence inthe record that the FEMA funds were available beginning in2006. [FAA Exhibit 1, Item 39, pages 45 and 53 citing FAAExhibit 1, Items 14, 15, 16, 17 Exhibits C-66 and C-68] According to the Complainant, the Complainant submitted a newspaper article written by BenMyers in aNewOrleans newspaper on April 8, 2011: LakefrontAirport's owner isproviding a questionable explanation for the slow pace of repairs to a hangar that is central to a FederalAviationAdministration investigation. The Non-FloodProtectionAssetManagementAuthority, thepublic entity that owns the airport, blames the Federal Emergency ManagementAgency for having "obligatedandthen de-obligated funds necessary"to repair the hangar andoffice space. TheAuthority's explanation appears in a formal response to a complaintFlightline First [sic], a Lakefront tenant,filed with the FAA claiming the airportshowed favoritism towarda competitor. The explanation is "definitely notcorrect, "FEMApublic assistance Officer Eddie Williams said FEMA records show that $2.5 million has been "obligated" for the hangar, meaning the money has beenplaced in a reimbursement account the Governor's office controls. The money has been available to the Office of Facility Planning and Control in the form of reimbursements for completedworksince an initial $1.8 million deposit in October 2006. But only $287, 896.27has been drawn down this fall, according to FEMA. [FAA Exhibit 1, Item 39, pages 53-54, citing FAA Exhibit 1, Items 15 and 17, Exhibits C-66 and C-68]. In its rebuttal and response, Respondent stated as follows: Complainant bases its entireAmended Complaint andAmendedResponse to the Answer of the ManagementAuthority on "newly discoveredevidence. " That "evidence, "whichwouldnever be acceptedevidence in any courtof law as itviolates severalstandmdrules of admissibility, isastatementmade byaFEMA emplayeewhich appearedinanarticle in theNew Orleans CityBusiness newspaper onApril8, 2011. In thatarticle the FEMA employee statedthathe was "pretty certain"thatFEMAfunds necessary for the repair of the National GuardHangar were not deobligated by FEMA. However, 

### the atta.d?edemailsjromMs. LisaSmeltzer from the State of Louisiana Division of Administration

### made itcrystal clear that the saidFEMAfunds were deobligated in September, 2007andreobligatedin December, 2008. See, Exhibit I attached The FEMA employee was therefore misinformedandthe Complainant basedan entireAmendedComplaintandAmendedResponse on that misiriformation. This pattern of usingmisinformation is found throughout Complainant's filings. [FAAExhibit 1, Item40, page 5, citing FAAExhibit 1, Item25, page 3] 2425

The Respondent replied that its obligations "to repair the NG Hangar was dependent in part upon the receipt ofFEMA funds and whenthose funds were not available as the OLD had anticipated, the delay inrepairing the NG Hangar did not rise to a violation ofGrant Assurance 19." [FAA Exhibit 1, Item 40, page 4] The Respondent further emphasizes this by writing "Until the funds were obligated, the State ofLouisiana was unable to proceed with the work." [FAA Exhibit 1, Item 40, page 5] The Respondent emphasized a series ofe-mails sent by Ms. Lisa Smeltzer from the State of Louisiana Division ofAdministration. [FAA Exhibit 1, Item 25, page 3] The record includes a series ofe-mails submitted as part ofthe Respondent's Reply to the Amended Complaint. These e-mails reflect the uncertainty associated with the availability of FEMA funds which in turn delayed the airport sponsor in repairing the airport facility. The emails also indicated thatthe state was having difficulties funding the facility repairs at Lakefront Airport. In one e-mail, onMonday, August 18, 2008, Ms. Lisa Smeltzer ofthe Department of Administration sent an e-mail to Louis Capo, Executive Director ofthe Orleans Levee District. She wrote: We have been trying to get the money back from FEMAfor the PWs [project worksheets] thatwere de- obligatedatLakefrontAirport for several months now. There is a bigmeeting tomorrow to discuss these PWs with top FEMApeople. Couldyousendme a list of whatyou want to do with each of the bldgs., i.e., Bldg.# -demolish, Bldg. #- repair, etc.for all seven buildings which were assigned to the Military at the time of the hurricane? [Exhibit I, Item 25, Exhibit 1] In a subsequent e-mail dated August 22,2008, from Lisa Smeltzer ofthe State ofLouisiana Department ofAdministration to Louis Capo, she wrote: GoodNews! On Tuesday, 8119/08, FEMA (rep.from Odell's office, Walk, Stark, Connelly, etc.), GOHSEP (Reilly, Col. K, etc.: and the Military (Gen. Downer, etc.) met to discuss the deobligatedPWs from Jackson Barracks andLakefront Airport. Asyou may know, this issue has been going on since Sept. 07. As a result of the meeting (and here is the goodnews), FEMA saida letter will be sent to us nextweek, (but don't holdyour breath waiting on a letter), stating that there isNODUPLICATIONoffonding. We areproceedingon their word (since about 30 people were in the meeting). Thus, FPC (Office of Facility Planning and Control) willwrite new P Wrequests for the seven (?) buildings ownedby the Military at the time of the storm. Wejust received the new form from GOHSEP andRonnie will workon this onMonday. We wouldthen expect FEMA to send people to write the PWs. We will probably needassistance from the designers on cost, scope, etc. What I wouldlike to do is have FPC assistyou andmaintain the contractyou have with the designer so we do nothave to go backto selection board FPC couldhandle the bids andissue the

### contractto the contractor for the work includedin the PWs. We will also assistwith any improvedor alternateprojects. So, it

### looks like we are backon thiswithyouandlook forward to makingsome progress. [FAA Exhibit 1, Item 25, Exhibit 1] 26

Finally, Ms. Lisa Smelter ofthe StateofLouisianaDivisionofAdministrationinane-mail to Louis Capo on April 4, 20II provided a synopsis about the FEMA funds availability for the repair work at Lakefront Airport: 

### The de-obligation occurred in 9/07 and there-obligation occurred 12/08, so I apologize 

### if I was afew months off Once the PWs were re-obligated, we had to go through scope alignment which took several months. See attached spreadsheet showing obligation of fundsfor the 3rd

### versions in Sept./Oct. 2009. Until thefunds are obligated, we are unable to proceedwith work. Note also a 4 1 h 

### version on each PWwas not obligated until early 2011 (smaller dollars, but again additional fundsfor theproject.) Hopefully, this answers the question. [FAA Exhibit I, Item 25, Exhibit I] The Complainant also provided a newspaper article about alleged state corruption inwhich a FEMA public assistance officer suggested that the explanation provided by the airport sponsor was defmitely not correct. [FAA Exhibit I, Item 39, page 42 

### citing FAA Exhibit I, Item 15 C-66 and FAA Exhibit 1, Item 17, Exhibit C-66] However, the Complainant did not provide any evidence to showthat the FEMA public assistance officer had been personally involved with the Lakefront Airport or had personal knowledge ofthe 2008 meetings or subsequenttimelines where the different versions ofPWs (project worksheets) were developed for the repair of Lakefront Airport as written in the State ofLouisiana Division ofAdministration e-mails. Even though not sworn testimony, a reasonable reading ofthe chain ofe-mails shows there were several versions ofthe scope ofwork for construction repair to be negotiated betweenthe Airport Sponsor and FEMA for the Lakefront Airport repairs between December 2008 and early 2011. It also appears to be clear that the State ofLouisiana Division ofAdministration would not permit the Airport Sponsorto proceed with all repair work until all ofthe smaller but additional FEMA funds for the individual Lakefront Airport projects were fully obligated in early 2011. To suggest otherwise, one would obligate the airport sponsor to make up the difference out of pocket in the local funds until reimbursed by FEMA ifthe funds ever become available. Itis reasonable for a public entity such as an airport sponsor not to commit to a project until the total funding package is in place. The Respondent also informed the FAA thatthe work onthe hangar was completed in February of2012. [Exhibit I, Item 40, page 4] The Aviation Group (TAG) Report also included an email dated April6, 2011, whichreflected the work being scheduled inside the hangar and the necessary coordination requirements for the constructionto takeplace:Date: Wed, 6Apr201111:16:54 From: Vick Corso To: Rolando Gonzalez GoodmorningRolando, As requested per our conversation 4/6/11 the construction inside hanger will start this comingMonday 4/11/2011. From this day on till thefirst week of June we will need total access to the hangar from 7am till 4:30pmMonday--- Saturday and possible Sunday. 

## .if andevent[sic] we are workinglater hours that dayyou will be notified that morning. There can be noplanes in the hangar due to the working inprogress. The inside of hangar will be staging area toprep materials to be installed, sprinkler systems,fire alarm, coil door install, andhangar glass replaced. I'm not sure how this will affect using it after hours but 

## if you foe! that the aircraftwill be safo beingstoredwith equipment andhardware that will be your call. Please letAnthonyknow 

## if you have any requestday to day. Thanks, Vick Corso VickCorso C.E. 0. Corso Companies/ Anode, Inc. [FAA Exhibit 1, Item 25, Exhibit 1] 27

This e-mail highlights the timetable ofscheduled work and the necessary coordination between all affected parties and tenants for important safety and security capital improvements such as the sprinkler system, fire alarm, doors, glass, etc., being installed. Until the funds were obligated in full, everyone was unable to proceed with work. The PWs (project worksheets) were not able to be finalized between the Airport Sponsor, the State of Louisiana, and FEMA, until the actual amounts were confirmed. Once the funds were reobligated, the State had to go through an additional scope alignment, which took several months. There is therefore substantial evidence in the record ofthis proceeding demonstrating the unavailability ofthe necessary FEMA funds at issue for the Airport Sponsor to complete the scope ofwork and necessary repairs. The Associate Administrator for Airports finds that the factual evidence supports the Director's Determination. An examination of the State ofLouisiana e-mails on appeal further substantiates the Director's conclusion that Respondent did not violate Grant Assurance 19 by failing to meet the self-imposed deadline to repairthe National Guard Hangar ("NG Hangar"). Furthermore, according to the Respondent's Reply to the Complainant's Appeal, the repairs to the NG Hangar were completed in February of2012. [FAA Exhibit 1, Item 40, page 4] The FAA will make a determination as to whether an airport sponsor is currently in compliance with applicable Federal obligations. Consequently, "the FAA will consider the successful action by the airport to cure any alleged orpotentialpastviolation of applicable federal obligations to be grounds for dismissal of such allegations." [See Wilson Air Center v. Memphis and Shelby County Airport Authority, FAA Docket No. 16-99-10, (August 30, 2001) (Final Decision and Order), page 5] Therefore, this issue can be considered moot.28

The Director also correctly found thatthe allegations and evidence presented by Complainant regarding an open drain on the Airport ramp, which has long since been repaired, and changes to an on-Airport maintenance schedule didnotrisetoaviolationof

### GrantAssurance 19. [FAA Exhibit I, Item 38, page 23] In its Original Complaint, the Complainant stated the following: "The Orleans Levy [sic] District is allowing the airport to deteriorate andto become a safety hazard. In the recentpast, ajet aircraft was being relocated on the airport ramp. Because the Orleans Levy [sic] District failed to maintain the drainplates andcover in aproper configuration and failed to have themproperly secured, when the aircraft was moved by tug across the drainplate, theplate gave way andthe aircraftwas damaged. The airport sponsor...denies any liability or responsibility for this damage to the aircraft. The incident with this aircraft is merely one illustration of the manner in which the Orleans Levy District is allowing the LakefrontAirport to deteriorate. Further, 

### if you will examine the Exhibit 18

... . you will note that the

...District now desired to defer filter changes on thefuel filter system from an annual replacement cycle to every twoyears. While this may have a certain appeal economically, itmaypresent a safety hazard." [FAA Exhibit 1, Item 1 , page 21] The Director found that other than Complainant's statements above, there was no additional informationprovided in the pleadings to substantiate these claims. The Complainant has submitted four images that depict a square, open area on the ramp with an adjacent cover- this appears to be a drain area and cover. [FAA Exhibit 1, Item 1, Exhibits 45, 46, 47, 48] Additionally, the images show thatparking cones had been placed around the area to warn and prevent others from getting close to it. The Complainant objects to the Director's Determination finding "aComplaint must present more substantial evidence ofrepeated failure" before Complainant had proven the Sponsor failed to maintain the Airport in violation of49 U.S.C. § 47107(a)(7) and Grant Assurance 19 when there are no such requirement in the statute nor in Grant Assurance 19." [FAA Exhibit I, Item 39, page 44] Even though the Complainant submitted four photographs as exhibits, there is no reliable, probative and substantial evidence to reasonably conclude that there were any airport hazards as the Complainant specifically claimed about the open drain area or changes in the fuel filter system. The four pictures show appropriate temporary safety measures such as placing the parking cones until the repair could be completed. The Airport Sponsor appears to have taken the appropriate temporary corrective action to maintain the safety ofLakefront Airport. The FAA will make a determination as to whether an airport sponsor is currently in compliance with applicable Federal obligations. Consequently, "the FAA will consider the successful action by the airport to cure any alleged orpotential past violation ofapplicable Federal obligations tobe grounds for dismissal ofsuch allegations." [See Wilson Air Center v. Memphis and Shelby County Airport Authority, FAA Docket No. 16-99-10, (August 30, 2001) (Final Decision and Order), page 5 (Wilson FAD).] Therefore, the Airport Sponsor's corrective measures taken properly resolved this issue. Therefore, the Associate Administrator for Airports finds that the Director's Determination is upheld on appeal concerning this issue. 

### 3. Complainant's Appeal ofDirector's Use on the Act ofGod provision in Grant Assurance 19, Operation and Maintenance, for the Determination. The Complainant objected to the Director's Determination finding that "an "act of God" excused compliance with the Sponsor's duty to maintain theAirport suitably as required by 49 U.S. 

### C. § 47107(a)(7), since there is no "act of God" exception to that duty in the statute andsince Hurricane Katrina tookplace in 2005 andthe Sponsor's lease with AeroPremier was executed in 2008, after Hurricane Katrina struck the Gulf Coast with the result thatHurricane Katrina was not andcouldnot have been an intervening "act of God" excusing the Sponsor'sperformance of its duties.[sicj" [FAA Exhibit 1, Item 39, page 21] 29

The Complainant contends that "even 

### if there were an "act of God" exception that applied in this factpattern, a contention the Complainant submits is fallacious,for the "act of God" exception to be triggered, the "act of God" wouldhave hadto have actedas a superseding or intervening cause. There was no "act of God" from April8, 2008 to August 1, 2009 thatpreventedthe AirportSponsor from suitably maintaining the Airport.[sic]" FAA Exhibit 1, Item 39, pages 21- 22] Grant Assurance 19 states: 19. OPERATION ANDMAINTENANCE

a. The airport andall facilities which are necessary to serve the aeronautical users of the airport, other than facilities ownedor controlledby the United States, shall be operatedat all times in a safe andserviceable condition and in accordance with the minimum standards as may be required orprescribedby applicable Federal, state andlocal agencies for maintenance andoperation. It will not cause orpermit any activity or action thereon which would interfere with its use for airportpurposes. It willsuitably operate andmaintain the airport and all facilities thereon or connected therewith, with due regard to climatic and flood conditions. Anyproposal to temporarily close the airport for non-aeronautical purposes must first be approved by the Secretary. Infurtherance of this assurance, the sponsor will have in effect arrangementsforb. Operating the airport's aeronautical facilities whenever required;

c. Promptly marking andlighting hazards resulting from airport conditions,including temporary conditions; and d Promptly notifyingairmen of any condition qffecting aeronautical use of the airport. Nothing containedherein shall be construedto require that the airport be operated for aeronautical use during temporaryperiods when snow,flood or other climatic conditions interfere with such operation andmaintenance. Further, nothing herein shall be construedas requiring the maintenance, repair, restoration, or replacement of any structure or facility which is substantially damagedor destroyeddue to an act of Godor other condition or circumstance beyondthe control of the sponsor. 30

First, Complainant's allegation that there is no 'act ofGod' exception in Grant Assurance 19 has no merit. The assurance in subparagraph (d) states that, nothing herein shall be construed as requiring the maintenance, repair, restoration, or replacement ofany structure or facility which is substantially damaged or destroyed due to an act ofGod or other condition or circumstance beyond the control ofthe sponsor. This is the 'act ofGod' exception that provides flexibility for the sponsor in compliance with Grant Assurance 19 in the aftermath ofan 'act ofGod' event. There is little question that Hurricane Katrina constituted an 'act ofGod'

.3 As to the allegation (or insinuation) that because the act ofGod exception is not included in the statutory provision relating to Grant Assurance 19 (49 U.S.C. 47107(a)(7)), the exception carriers no legal weight or effect, Complainant is in error. The FAA has statutory authority to promulgate new grant assurances and modify existing assurances (see, e.g., 49 U.S.C. 47107(h)); all sponsors are contractually obligated to comply with all ofthe assurances. Sponsors are not free to ignore non-statutory grant assurances or terms. Second, Complainant alleges in the alternative that even ifthere is an 'act ofGod' exception, that the Director erred because Hurricane Katrina occurred in August 2005 and that three years later after that event, the sponsor could no longer utilize the 'act ofGod' exception to excuse compliance with Grant Assurance 19. [FAA Exhibit 1, Item 39, page 44] However, the grant assurance does not require the sponsor to maintain, repair, restore, or replace any airport structures within any timeframe;4 as noted above, it states that the assurance cannot be construed to require the sponsor to take these actions where airport structures are "substantially damaged or destroyed" due to the 'act ofGod'. As a result, there is no merit to Complainant's claim that there was no 'act ofGod' from AprilS, 2008 to August 1, 2009 that prevented the Airport Sponsor from suitably maintaining the Airport. [FAA Exhibit 1, Item 39, page 44] The FAA need not demonstrate or find any intervening or supervening causes. The AeroPremier lease required the Airport Sponsor to repair the facility in 14 months ofthe effective date ofthe Respondents lease with AeroPremier. [FAA Exhibit 1, Exhibit 38, page 3, citing FAA Exhibit 1, Item 1, Exhibit 4, pages 2-3] As the Respondent properly provided in the 3 See Skandia Insurance Co Ltd. V. Star Shipping AS, 173 F.Supp.2d 1228,

**1239~1240** (S.D. Ala. 2001), citing 1Am.Jur.2d Act ofGod§ 5 (1962)("Hurricanes are precisely the sort ofnatural disaster for which the Act ofGod exception from liability is afforded." See 2 Benedict on Admiralty§ !52 (7th ed.l990)). 4 However, the sponsor is required to correct unsafe conditions within areasonable amount oftime. FAA Order 5190.6B,

**~** 7.1 0.31
e-mails submitted as an exhibit, the Airport Sponsor was unable to perform its contractual duties due to the lack ofthe entire financing for the facility repairs. Thus, the Airport Sponsor had no obligation to perform the maintenance orrepairs to any ofits facilities because ofthe Act of God, in this case Hurricane Katrina, even three years after the actual Act ofGod event, without all ofthe necessary capital improvement funds to complete the project in its entirety from planning the final Project Work Sheets through to completion ofconstruction work. According to Respondent, the work on the hangar was completed in February of2012 once the capital improvement funds were received. [FAA Exhibit 1, Item 40, page 4] The Associate Administrator for Airports finds that the Appellant's argument is not persuasive on appeal. The Director's Determination is upheld concerning its findings on Grant Assurance 19. 4. WhethertheRespondentviolated GrantAssurance22(c), EconomicNondiscrimination, GrantAssnrance 24, Fee and Rental Strnctnre, and GrantAssurance 25,Airport Revenues, byagreeingto a settlement that benefited AeroPremierand its Advantage Capitalparent and unjustly discriminated againstComplainant. The Director was not persuaded that the Respondent violated Grant Assurance 22, Economic Nondiscrimination, by agreeing to a settlement agreement that offered rent credits and other concessions to AeroPremier. The FAA will not substitute itsjudgment for that ofthe court or OLD in determining the level ofdamages appropriate to resolve OLD's breach oflease with AeroPremier. The Director was not persuaded by the evidence presented that the Complainant has been economically disadvantaged by the OLD's settlement agreement with AeroPremier. [FAA Exhibit 1, Item 38, page 32] The Director also was not able to make a finding on the evidence presented as to whether the Complainant has been charged excessive insurance rates to 'make up' for a reduction in insurance fees paid by AeroPremier. The Director advised the Complainant to contact the Respondent to resolve this issue. [FAA Exhibit 1, Item 38, page 32] The Complainant appealed the Director's Determination finding thatthe Sponsor's conferring $1,258,000 in economic benefits on AeroPremier and the Advantage Capital entities was a "business decision" when the FAA Southwest Region Airport District Office (ADO) had requested detailed financial documentation in evaluating charges ofviolation against Grant Assurances 22, 24, 25, 5 and 29. [FAA Exhibit 1, Item 39, page 21] The Complainant argued the Director reversed his subordinates' position without explanation and declared, in the absence ofthe necessary documentation, the Sponsor's actions werejustified as a "business decision." [FAA Exhibit 1, Item 39, page 21] The Complainant further argued that the Director's finding that there was no violation ofGrant Assurance 22 because it was ajustified "business decision" was based onthe Director's finding that FEMA funds to renovate premises leased to AeroPremier were not available when there was no sworn testimony to support that finding and there was evidence inthe record demonstrating the Director's finding was manifestly untrue. [FAA Exhibit 1, Item 39, page 21] The Complainant also objected to the Director's Determination fmding that the Airport Sponsor's32 conferring $500,000 inrent credits onthe Advantage Capital entities was lawful as a business decision when the Advantage Capital entities lost their motion for summaryjudgmentin the underlying litigation. [FAA Exhibit 1, Item 39, page 21] The Complainant also objectedto the Director's finding that, "

...the Director is notpersuaded that the terms ofthe settlement are so beneficial to AeroPremier, over and above the damages ifsustained, that it rises to a situation where Flightline or other FBOs on the airport have incurred unjust economic discrimination as a result." [FAA Exhibit 1, Item 39, page 23] The Complainant objected to the Director's finding that 

### "GrantAssurance 22 was not violated to the extent the Director found the court in 

### the underlying litigation rendered judgment on the SettlementAgreement andby virtue of court approval, the Director was notpersuaded that it

### rises to a situation where Flightline incurred unjust economic discrimination as a result." [sic] [FAA Exhibit 1, Item 39, page 23] The Complainant concludes that the Director's finding is not supported by substantial evidence. [FAA Exhibit 1, Item 39, page 23, 

### citing FAAExhibit 1, Items 12, and FAA Exhibit 1, Item 28] The Complainant points to the Velayos letter to the Sponsor ofNovember 18,2010. The FAA's Lead Planner for the Louisiana/New Mexico ADO wrote: 

### We believe that, due to the significant differences betweenAeroPremier's estimate and OLD's report, implementation of this settlement may result in 

### an improper use of airport revenue. 

## lf the sponsor agrees to base its settlement on unfounded compensation, subsidies, and/or set an improper fee schedule benefiting AeroPremier, this action may violate GrantAssurance 22 (Economic NonDiscrimination), 24 (Fee andRentalStructure), and25 (Airport Revenue). [FAA Exhibit 1, Item 33, Exhibit C-55, page 1] The Complainant hired Michael Hodges, its expert witness consultant in management ofFBOs and airports, who provided an Affidavitthat Grant Assurance 22(c), 24 and 25(a) were all interrelated and the evidence before him led him to conclude the Sponsor was in violation of Grant Assurance 22(c), 24, 25(a), 5 and 29. TheComplainantappealedtheDirector'sDetennination as not supportedby "substantial evidence" in light ofthe following: 

### 1. Complainantsubmittedsworn testimony from MichaelA. Hodges, MAl, an expertin 

### fixed base operations and

### managingairports who opinedthe Sponsorwas in violation of Grant AssuranceNos. 22(c), 24, 25(a), 5 and

### 29. 2. Hodges concludedthe deal between the SponsorandAeroPremier in the Orderof February 22, 2010, andthe SettlementAgreementof October12, 2010was "arbitrary, capricious and 

### discriminatory in favor of AeroPremierand

### againstF1ightline, andwas not predicatedupon anysupportable marketdata or justifiable analyses of damages or financial impacts. 3. Hodges notedthateven in 

### the absence of officespace renovations to theNGHangar, it

### was still

..folly capable of being rentedto aircraft owners to house their aircrqft. 4. Hodges notedthe economic concessions the SponsorgaveAeroPremieraspartof'the deal' were grossly and

### demonstrably in 

### excess of any 

### kinds of damagesAeroPremiercould possiblyhave suffiredas a consequence of aportion of the facility's office space having notbeen renovated5. Hodges forther mted: The disparate ecommictreatment the Sponsor

### has handedoutto OdysseyandF7ightline comparedtoAeroPremierconvinces me as aprofossional in the aviation industry thatthe intentof the Sponsorwas to favor the interests of AeroPremier andtheAdvantage Capital entities over those of Flightline and Odyssey. 6. Hodges notedthatwhile there was a 15% reduction in the improved portion of the NG Hangar, the rental was reduced inparagraph 4 of the Order from $28,259.83per month to $7,500.00permonth. 33



### 7. Hodges noteda rationalperson wouldnot reduce the rent by 75% for a 15% reduction in the available space. 8. Hodges opinedthe violation of GrantAssurance No. 22 in the form of unjustifiedand discriminatory economic concessions resulted in a violation of GrantAssuranceNo. 24 requiring the Sponsor to seta rentstructure to make the airportas self-sustaining as possible. 9. Hodges notedeven 

### if intent to discriminate was a requirement toprovidinga violation of GrantAssuranceNo. 22(c), the requirement hadbeen met basedon the evidence. 10. Hodges opined that the unauthorizedand unwarrantedeconomic concessions conferredby the Sponsor onAero Premier resulted in a violation of GrantAssurance No. 25, theAirportSponsor is takingmoney from Flightline andusing thatmoney to subsidizeAeroPremier. 11. AnalyzingAeroPremier's economic lossprojections, Hodges noted: the grossprofit andmarketshareprojections

...are excessive. 12. Drawingon his experience in the industry, Hodges noted:

... theprojection that AeroPremier couldachieve 33% marketshare in such a shortperiod.

.. is not supportable based upon market andhistorical data. 13. Hodges examinedthe SettlementAgreement noting thata rent credit of$473,000.00 was discriminatory under GrantAssuranceNo, 22(c) andthereby also violatedGrant AssuranceNos. 24 and25(a) [1d

**~14(a)].** 14. Hodges remarkedthe $500, 000. 00 rent credit inparagraph 2 of the Settlement Agreementviolated GrantAssuranceNos. 22(c), 24 and25(a) [Id.

**~14(b)].** 15. Hodges notedthat forgivingAeroPremier frompaying $285,000.00 to make improvements as recited inparagraph 3 of the SettlementAgreementviolatedGrant AssuranceNos. 22(c), 24 and25(a). 16. Accordingto Hodges, the waiver of 50% of the insurance and utility fees in paragraph 4 of the SettlementAgreementviolatedGrantAssuranceNos. 22(c), 24 and25(a).17.Accordingto Hodges, paragraph 9 and paragraph 12 of the SettlementAgreement allowingAeroPremier to sublease the second floor office space in the NGHangar without obtaining permission from the Sponsor andto cancel the MI' Hangar lease violated GrantAssuranceNos. 5 and29. 

### I8. Finally, Hodges noted, all FBOs in their first two to threeyears of operations invariably lose money...[F]orAeroPremier to have lost money on operations in their firstyear wouldnot be atypical. Infact it wouldbe expected

... [FAA Exhibit I, Item 39, pages 32-34, citing FAA Exhibit I, Item 12] Further, the Complainant contended the Director relied on the Sponsor's submission of material and the submitted material was debunked and its reliability impeached by the sworn testimony ofBrayton Matthews, Manager and Secretary ofFlightline Ground with respect to potential tenants that would have paid AeroPremier rent ifthe office space in the NG Hangar had been renovated. The Complainants assert: 1. Net Jets never didany business withAeroPremier; 2. NOLA was evictedbyAeroPremier for failure to timelypay rent; 3. GCA is a tenant of AeroPremier in the MI'Hangar; 4. Dominic Lala isjust apilot, not an aircraft owner; 5. He never heard ofCAA; 6. He never heard ofWay Home Contracting; 

### 7. The two hangars operatedbyAeroPremier arefilled to capacity; and 8. The TAG Report is deceptive and is misleading. [FAA Exhibit I, Item 39, pages 36-37 citingFAA Exhibit 1, Item 28] 34

The Complainant contended the Director's reliance on the TAG Report in rendering his findings confirms the Director's conclusions that the Sponsor made a business decision and the finding that Complainant had failed to carry its burden ofproofwas not supported by substantial evidence. [FAA Exhibit I, Item 39, page 37 citing FAA Exhibit I, Item 27, pages 2-4] In its Reply, the Respondent maintained that there is no disputing the fact thata courtof competent jurisdiction in the State of Louisiana adjudgedthe OLD liable for breach of its lease withAero Premier after all due legal proceedings. Even though the issue ofliabilitytoAdvantage Capitalwas notdecidedby summary judgment, that potentialliabilitystill remainedto be adjudgedata trial on the merits. The issue facing the OLD was notwhether it oweddamages to AeroPremierbuthow much those damages wouldbe. A businessdecision wasmade to mediate the case andenter into a settlementagreement. The underlyinglitigation, which, asthe Director correctly pointedout, is beyondthepurviewof the FAA. Furthermore, the Respondent continues

.... theDirectorcorrectlydeterminedthaithe evidencepresented

### bythe Complainant that it

### hadbeen economicallydisadvantagedbythe SettlementAgreementwas not persuasive. The Respondent argues 

### that the Complainantsimplyassumedeconomic disadvantage asa resultof the settlementagreementandthai itneverconsideredthe damage chnetoAdvantage Capitaland AeroPremieras a resultof the breach of the lease. The Respondentalso suggests thai the Complainantdidnotconsiderthe economic benefitComplainantclearly enjoyedas a resultof the breach of Aero Premier's lease. [FAA Exhibit 1, Item 40, pages 5-6, citingFAAExhibit 1, Item 25, page 3] The Respondent further responded by: the Complainant's 'experts; who wrote the conclusory text, didnotbringto this proceeding extensive, direct experience operatingandmanagingFBOs. Their perspective does not relate to trying to impress aprospective tenant bywalking her/him through the FBO lobby or hangar. They have never enduredthe demands of the marketplace when the competitor FBO has aprice advantage. On the other hand, theprincipals ofTAGhaveyears of hands on experience doing the actualwork of running anFBO andthat is the issue in thisproceeding. [FAA Exhibit 1, Item 25, page 9] The Respondent further stated that: [tofurther contrast the Complainant's expert,] the Respondent hired an independent consultant, The Aviation Group (TAG), to examine all the facts of thisproceedingandtheir charge includedthe development of information outside of the Louisiana litigation. TAG examinedthe traffic data before andafter Katrina. They examinedthe airportplan. They assessedthe actual intoplane rates offiredby the FBOs. They trackedthe history of the FBOs on theAirport and tracedthe trends of the various companies thatprecededthe events at issue. In order to understandthe actions of theAuthority, TAG measuredthe impact of Katrina on the region andtheAirport. They set, as criteria for measuringthe Respondent'sperformance andof the management's decisions on the FBOs, their knowledge of other comparable airports. They did independent economic and financial analyses. In short, TAG completedan independent, objective review of the actions at issue. [Exhibit 1, Item 25, pages 9-10] 3536 

### The Mutual Receipt Release and Indemnification Agreement AeroPremier and the Orleans Levee District, Division ofNon-Flood Assets (OLD) engaged in litigation inthe Civil District Court for the Parish ofOrleans, State ofLouisiana, in the case of AeroPremier Jet Center, LLC v. Board ofCommissioners, eta!, No. 09-8632. The central focus ofthis litigation was the claim asserted by AeroPremier that it lost profits because the OLD failed to timely complete renovations to the National Guard Hangar office space leased by AeroPremier. Attendant to that litigation, the OLD permitted AeroPremier to operate without paying the full rent due under an existing lease between AeroPremier and the OLD. [FAA Exhibit l, Item!, C-54] On March 1, 2010, Harold Flanagan ofFlanagan Partners prepared a damages calculation report commissioned by AeroPremier. This report considered damages other thanlost fuel sales. The report reviewed OLD's failure to timely meet contractual deadlines, improper material benefits to AeroPremier's competition including subsidized parking area, ramp space and hangar space and operational infringement. The report also considered lost fuel sales, 'butfor' circumstances and lostnet income on leasing space at arate of$25,000permonth. [FAA Exhibit I, Item 27, exhibit R4. pages 2-4] In October 2010, AeroPremier, its partner Advantage Capital Partners, and OLD entered into a "Mutual Receipt, Release and Indemnification Agreement (Settlement Agreement)." The Agreement stated, in part, that: 

### The OLD shallprovide a $473,000 credit to AeroPremier, which may be applied topast or future rent or any other obligation of AeroPremier to OLD. The OLD shallprovide a $500,000 transferable rent credit to AeroPremier orAdvantage [

..} which credit may be applied to rent due at any time on Building 101 on or afterAugust I, 2011. The credit may be applied in the amount of up to $100, 000peryear until exhausted. The OLD waives and releasesAeroPremier from the obligation under the Lease to invest $285,000 in improvements to realproperty at the Airport. The OLD waives andreleasesAeroPremier from the obligation under the Lease topay rent for Building I

### OJ, including the hangar,from August I, 2010, until renovations of Building 

### J-J (as a whole) are completed. AeroPremier shall receive a rent credit for any leased space within Building 

### JOI which ispresently in use byAeroPremier to the extent such space is unusable due to OLD's construction/renovation activities resulting from Lessor's Repair Obligation. OLD shall be responsiblefor the repair of damage to Building I

### OJ which occurred as a result of Hurricane Katrina. OLD shall further be responsible for the repair of damage to Building 

### JOJ which may occur as a result of the

### Lessor's Repair Obligations. The office and customer service space within Building JOJ, 

### shall, upon completion of the Lessor's Repair Obligation, be commercially acceptable office space suitablefor use as a FBO andconsistent with the agreedplans, specifications, drawings and floorplans. [ ..]AeroPremier shall have the right to either sub-lease the 2'1 

### floor of building JOJ 

### or to releases the space to OLD[

..]. This Agreement is 

### subject to the approval of the FederalAviationAdministration (FAA). 

## If the FAA declines to approve theAgreement, the Parties agree to recommence mediation with Judge Ponder within thirty (30) days. [FAAExhibit 1, Item 1, C-54] The FAA's SouthwestRegionLouisiana/NewMexico ADO's letterofNovember 16, 2010, reviewing the proposed settlement agreement, expressed concerns with the proposed agreement and suggested, 

### in part, that: 

### the sponsor addresses itsfindings, specifically, the conclusions in the two scenarios reported by the CPAfirm estimatingAeroPremier's losses. In its statements to the sponsor, Aero Premier estimated its losses amount to nearly $2. 6M However, the OLD reportpurports two vastly different results. In scenario #J, 

### the report estimates losses amount tojust under $200,000, while in scenario #2, the report states there are no losses. We believe that, due to the significant differences betweenAero Premier's estimate and OLD's report, implementation of this settlement may result in an improper use of airport revenue. 

## If the sponsor agrees toprovide unfounded compensation, subsidies, and/or set an improper fee schedule benefitingAeroPremier in violation of Grant Assurance 22, Economic Non Discrimination; 24, Fee andRental Structure; and25, AirportRevenue·.l Finally, we are concerned that acceptance by the OLD of the documentation, or lack thereof submitted byAeroPremier to support its estimations and allegations regarding lost income and profits may lead to more violations of GrantAssurances 22 (Economic Nondiscrimination) and24 (Fee andRental Structure). For example, we recommend the sponsor engage in due diligence to quantify statements and estimationspertaining to AeroPremier's assertions it 

### lost $25,000per month in leasing opportunities.

5The OlDconunissioned areport fromHolly Sharp ofLaPorte, Sehrt, Romigand Hand to reviewrecords and documents and render an opinion regardingthe losses, ifany, sustained byAeroPremieras aresultof the failure of the OLD to refurbish theformer LouisianaNationalGuard HangarbyAugust 1,2009 for use as officespace, customer service area and other commercial uses. This report focused exclusively on lost fuel sales and provided estimates based ontwo scenarios. In scenario one (I), lost profitto AeroPremierwas $199,613. In scenariotwo (2), there was no profit lost. [FAA Exhibit 1, Item27, exhibit R-3] 3738 [FAA Exhibit 1, Item 33, pages 1-2] The OLD commissioned a report from 'The Aviation Group' (TAG), which reviewed the terms and conditions of the settlement agreementbetweenthe OLD and AeroPremier. InJune 2011, TAG issued a report that concludedthatthe settlement agreement was fair to all parties. Specifically, the report stated: The SettlementAgreementgave rent credits to AeroPremier andAdvantage Capital as well as relief from some obligations. A rent credit forpast rental payments of $473, 000 was grantedtoAero Premier as wellas rent credits for some foture rentalpayments until such time as repairs are completed. Bothparties, OLD andAeroPremierpresentedtheirprojections of current and fUture losses that ranged from a low of less than $200,000 from OLD to a high of over $2,000,000 from AeroPremier. The OLD report was narrow in scope as it only considered foel sales andnot all the other non-fuel revenuepotential. The time period forfUture losses extendedonly to 2012

.

... In addition to aeronautical services, AeroPremier is unable toprovide office space topotential customers.[

..]AeroPremier is unable to assure customers of when andwhatspace will be available. This loss of rent continues to negatively impact their revenue stream. Snapshotprojections of financialperformance that both partiespresentedduringthe settlementhearing are difficult andobviouslyopen to much criticism. However, as time haspassedsince theseprojections were made, the continuedeffects of the lackof the expectedrenovatedNational Guard facility reinforce that the amount of the settlementwas appropriate

.

... The SettlementAgreement alsoprovideda $500,000 transferable rent credit to AeroPremier orAdvantage Capital. [ ..] This rent credit applied over a 

### 5year periodis appropriate forAdvantage to use in order to try to recapture the lost value in their investment

.

... AeroPremier was also released from the obligation to invest $285,000 in improvements in the National Guardhangar. This obligation was in the original lease in 2008. It will now be 3 or moreyears beforeAeroPremier will be able to make improvements to thefacility asprojected.[

..]SinceAeroPremier intends to spenda significant amount to improve thefacility, the relief of the specific amount of the obligation appears appropriate." [FAA Exhibit 1, Item 38, page 28 citing FAA Exhibit 1, Item 27, Exhibit R-7, pages 7-8] The Complainant contended that the Sponsor's submission ofmaterial was debunked and its reliability impeached by the sworn testimony ofBrayton Matthews with respect to potential tenants that would have paid AeroPremier rent ifthe office space in the NG Hangar had been renovated. [FAA Exhibit 1, Item 39] The Complainant also appealed, in part, based on the Matthews Affidavit that: 8. The TAG Report is deceptive and is misleading.[FAA Exhibit I, Item 39, page 37 

### citingFAAExhibit I, Item 28, page 3] The Complainant finally argued that the Director's reliance on this report was not supported by substantial evidence. [FAA Exhibit I, Item 39, page 37] 39

The Director considered the information from the Respondent's Background onthe Justification for the Settlement Agreement

### that: "For the FAA to understand the motivation of the OLD to settle the state court litigation initiatedbyAeroPremier, it is important to understandthefactual and procedural antecedents that ledto the mediatedsettlement. Under the Transportation Statute andthe relevantFAApolicies, Airport Sponsors are entitled to use their best judgment to settle lawsuits using airport revenue in concert with those statutory andregulatory obligations. As explainedbelow, because (I) the OLD hadbeenfound liablefor breach of the lease withAeroPremier, (2) the OLD faced a substantial risk of a large adversejudgment in the state lawsuit, (3) the OLD recognized that its expert report coveredonly one element of the damages claimedbyAeroPremier, lost fuel sales, and (4) a settlement meant that the OLD wouldnot have topay a monetary judgment, which would have allowedAeroPremier to offset I00% of all amounts due OLD until thejudgment waspaid, the OLD decided that it was reasonable to settle the state lawsuit immediately for rent credits. When monetized, these credits were much less than the amountAeroPremier couldhave recovered in its lawsuit. [

..] AeroPremierpresenteda very strong case during the state court litigation. During the early stages of the litigation, Aero Premier obtainedapartial summaryjudgment for breach of lease based on the OLD 'sfailure to repair thefacility on a timely basis [

..]AeroPremier's expert witness, an accountant named HaroldAsher, opined thatAeroPremier lost between $2 million and $3.5 million as a result of the OLD's contract breaches. Hefurther opined that hadAeroPremier failed as a result ofOLDs actions, the losses would have exceeded $5 million. Pursuant to Louisiana Civil Code Article I997, 'An obligor in bad faith is liablefor all the damages,foreseeable or not, that are a direct consequence of his failure toperform. ' As the lawpermits, the expert's calculation includedmore thanjust lost customers that couldbe identifiedby name, andalso took into account lost marketshare andother identifiable losses. The Respondentalso statedthat, with regard to the FAA's reference to the OLD report in its request for forther information, while this report shows a loss of only $200,000, the report analysis didnot include a number of items, including "[t]he loss of other revenue streams generatedalong with the loss of foe/revenue; in addition toproviding fuel, an FBO also earns substantial revenue through the provision of maintenance, office rent, hangar fees, detailing, catering, rental cars, travel service fee, groundsupportandtie downfees. The OLD expertreport did not include these other revenue sources. "[FAA Exhibit I, Item 38, page 29 citing FAAExhibit I, Item 27, pages 2-4] Based on the above FAA policy, the Associate Administrator finds that the Director correctly reviewed the submitted exhibits. [FAA Exhibit I, Item 38, pages 40-42] The Associate Administrator also finds that the administrative record shows the Directorperformed due diligence in this investigation and requested and reviewed additional detailed financial information from the Airport Sponsor concerning the Mutual Receipt, Release and Indemnification Settlement Agreement before making the Director's Determination. [FAA Exhibit I, Item 26] The Associate Administrator for Airports finds that the Director properly concluded that this additional information reasonably addressed the FAA's concerns about its need to have additional financial information. 40

The exhibits, including the exchanges between the FAA and the airport sponsor, indicate that one potential valuation ofdamages to AeroPremier by one expert identified between $2 and $3.5 million and as high as $5 million inpotential liability under state law. [FAA Exhibit I, Item 38, Page 29 citingFAA Exhibit I, Item 27, Pages 2-4] Although it is easy to second guess whether it is right or wrong, any party with potential financial liability will take reasonable action in an attempt to lower the potential financial damages. Mediation was one tool that was available to the Respondent. Fortunately for the Respondent, this was agreed to by the other party. Furthermore, the Respondent assured that the Settlement Agreement was subordinated to the FAA Grant Assurances. Thus, it appears from the evidence that settlement negotiations through mediation was an appropriate and reasonable business tool to utilize underthese conditions based onthe prospective and actual losses. FAA policy requires that a proponent ofa business at an airport has a responsibility to engage in negotiations that include details oflocation, services, financing and qualifications, among other business issues. Pointing out the legal vulnerabilities ofan airport operator in negotiations is not the same as negotiating business particulars. Complaining, formally or informally, does not replace a proponent's responsibility to negotiate detailed proposals. On the contrary, airport sponsors retain the proprietary right to demand that aeronautical business proposals include business plans with business details and associated commercial risks. Likewise, airport sponsors also may negotiate to protect themselves from litigation or complaints from existingbusinesses on the airport. The FAA has found that an airport sponsor may exercise its proprietary rights to protect itselfas a going concern in the face oflitigation. [JetAway v. Montrose, CO, FAA DocketNo. 16-08-01 (Director's Determination) (July 2, 2009) page 17.] See also [Kent J. Ashton, Jacquelin R. Ashton v. City ofConcord, NC, FAA DocketNo. 16-02-01 (Director's Determination) (August 22, 2003) page 27.] The Complainant further argued that in order for the airport sponsor to be in compliance with Grant Assurance 22, they should be treated equally with similar economic benefits such as reduced rents and insurance rates as AeroPremier, after the Settlement Agreement. However, the Complainant has not provided any evidence that the Respondent substantially breached the Complainant's lease terms or conditions similar to that ofAeroPremier's lease. This is a specific circumstance that distinguishes between determining whether the Complainant is being unjustly discriminated or not under these specific circumstances under Grant Assurance 22. To simply assume this as a result ofthe Settlement Agreement is not evidence in itselfofunjustdiscrimination. Consequently, based on the review ofthe entire administrative record, the Associate Administrator for Airports finds that the Director's Determination was made in accordance with the law, precedent, and policy and Grant Assurance 22, Economic Nondiscrimination, should be upheld. 41

In short, this decision finds that the Complainant's allegation that the Director erred in finding that the settlement between OLD and AeroPremier was inconsistent with the grant assurances has no merit. Through state court litigation, OLD had been found liable for breach ofits lease with AeroPremier and the sponsor faced a substantial risk ofan adversejudgment. It was appropriate and reasonable for the sponsor to explore settlement with Aero Premier, and for that settlement- instead ofproviding for OLD to pay a monetaryjudgment- providing instead for AeroPremier to offset 100% ofall amounts due OLD until thejudgment was paid. The settlement is reasonable because when monetized, the rent credits were much less than the amount AeroPremier could have recovered in its lawsuit. It would appear that this settlement actually helped OLD make its airport as self-sustaining as possible under the existing circumstances under Grant Assurance 24. There is no unjust discrimination here. The harmed party (AeroPremier) had a right to damages, but not the unharmed competitor FBO (Flightline). The grant assurances do not require a sponsor to provide same or similar compensation, rent credits, etc. to a competitor FBO thatwas not part ofthe lawsuit and settlement. 

### 5. Whether the Respondent violated Grant Assurance 24, Fee and Rental Structure, and/or Grant Assurance 25, Airport Revenues, by making no effort to collect monies due from AeroPremier and (2) by intentionally subsidizing AeroPremier with revenues by the Airport. The Director was not persuaded bythe arguments or evidence presented thatthe award ofrent credits and other concessions to AeroPremier via the Settlement Agreement were wildly inflated and therefore an unallowable use ofairport revenue or a violation ofthe obligation for the OLD to be as self-sustaining as possible under these unique circumstances. Rather, the Director was persuaded that the settlement agreement was a reasonable solution to this matter and perhaps served to hold down the ultimate cost ofthe settlement. [FAA Exhibit 1, Item 38, pages 37-38] Furthermore, the Director was persuaded that the OLD recognized its liability in failing to meet the terms ofits lease with AeroPremier and negotiated a resolution that was accepted by AeroPremier. The Director found that this resolution did not rise to a violation ofGrant Assurance 24 in that the rent credits granted to AeroPremier do not negatively impact the ability ofthe airport to be as self-sustaining as possible under these unique circumstances. [FAA Exhibit l, Item 38, page 38] The Director also was not persuaded that the OLD was in violation ofGrant Assurance 24 for agreeing to rent credits and a temporary reduction in insurance payments to settle its breach oflease with AeroPremier. Court costs and settlement expenses as a result ofa lawsuit are an acceptable use ofairport revenue. [FAA Exhibit 1, Item 38, page 38] On Appeal, the Complainant objects to the Director's finding that there is no violation:

### there is no violation of 49 U.S. 

### C. 47107(a)(3)and GrantAssurance No. 24 because it is not supported by substantial evidence, is arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law

... 

### [FAA Exhibit 1, Item 39, page 18] Also, under the Complainant's Appeals' Objections and Enumerations No. 8, the Complainant objects, in part

to the Director's Determination finding that the Sponsor's conferring $1,258,000 in economic benefits onAeroPremier andthe Advantage Capital entities was a "business decision" when his subordinates requesteddetailed financial documentation in 

### evaluating charges of GrantAssurance Violations Nos. 22,24, 25, 5 and29, the requesteddata was neverproduced, but the Director reversedhis subordinates without explanation anddeclared in the absence of the necessary documentation, the Sponsor's actions werejustified as a "business decision." 

### [FAA Exhibit 1, Item 39, page 21] In its Amended Complaint, the Complainant alleges that the OLD is in violation ofGrant Assurance 25, Airport Revenues, because it intentionally allowed AeroPremier to pay less than its contractually-obligated lease payments, insurance payments and other obligations. [FAA Exhibit 1, Item 15, page 8] The Complainant, in its Complaint, alleges that the OLD is unlawfully diverting revenue, and that Respondents by systemically andintentionally allowingAeroPremier topay less than its contractually-obligated leasepayments, insurancepayments andother obligations to Respondents are effectively subsidizingAeroPremier 's 

### operation with revenues generated by the Airport, including money obtained from Complainant." Respondent by agreeing in aprivate mediation session to confer $1,258,000.00 in additional economic benefits inAeroPremier[.

..}isdiverting and/or intends to divert Airport revenues to and for the benefit of AeroPremier

.... 42



### Respondents, by arbitrarily and capriciously assessingAeroPremier's leasedpremises at a grossly reducedvalue with no appraisal 

### [are] diverting revenues generated by the Airport [.

..} to AeroPremier andsubsidizingAeroPremier's operations

... While granting economic concessions to Aero Premier for insurance obligations on the theory it has been damagedbypremises not fully remediatedand by charging full insurance to Complainant operating in similar circumstances, Respondents are diverting revenues generated by the Airport[.

..} to AeroPremier

.... 

### [FAA Exhibit I, Item 15, pages 8-9] Additionally, in the initial Complaint, the Complainant also argued that it was obligated to pay insurance premiums in full as required by its lease. The Complainant stated:43

"While granting economic concessions to AeroPremier for insurance obligations on the theory it has been damaged bypremises not folly remediatedandby charging full insurance to Complainant operating in similar circumstances, Respondents are diverting revenues generated by theAirport (insurancepaidby Complainant) to AeroPremier." [FAA Exhibit 1, Item 15, page 9] The Director found that the Complainantprovided little informationregarding that it was forced to pay full insurance premiums for its leased space although it did not provide details ofhowthat its space was unusable or even whether it had contacted OLD to discuss a reduced rate until the facility was fully functionaL [FAA Exhibit 1, Item 38, page 31] In the absence ofthe Complainant providing the details or requesting similar treatment and was denied, the Director could not make a determination that because one FBO received a reduction in its insurance fees because ofa breach oflease, then the Complainant should receive a reduction as well was not reasonable. [FAA Exhibit I, Item 38, page 31] However, the Director did suggest that the Complainant contact the Respondent to resolve this issue. [FAA Exhibit I, Item 38 page 32] Based upon review ofthe record, the Director correctly determined that use ofthe Grant Assurance 24 was more appropriate than Grant Assurance 25, Airport Revenues, as the basis of analysis. The Complainant's correct allegation under Grant Assurance 24 is closely intertwined with the Complainant's Grant Assurance 22 allegation. 

### Inthis specific circumstance, each assurance is required for the other to survive the necessary burden ofproofwhich is on the proponent ofthe allegation. [14 CFR § 16.229] The Associate Administrator for Airports previously has determined that the Director was reasonable in categorizing the Settlement Agreement as business negotiations between parties. A proponent ofa business at an airport again has a responsibility to engage in negotiations that include details oflocation, services, financing and qualifications, among otherbusiness issues. Pointing out the legal vulnerabilities ofan airport operator in negotiations is not the same as negotiating business particulars. Complaining, formally or informally, does not replace a proponent's responsibility to negotiate detailed proposals. Airport sponsors retain the proprietary right to demand that aeronautical business proposals include business plans with sufficient information concerning the business details and associated commercial risks. Airport sponsors would be expected to negotiate to protect themselves from litigation and/or complaints with little or no merit. Finally, there is no specific language in the Settlement Agreement that the airport sponsor has abrogated its Federal obligations without FAA concurrence. Again, referring to the Settlement Agreement, the Associate Administrator found express language thatthe airport sponsor included subordinating the specific terms and conditions to its' grant assurances. In the Mutual Receipt, Release and Indemnification Agreement, paragraph 14 states: The parties agree that thisAgreement is intendedto include a complete and final release of all claims that have been or couldhave been asserted in the Lawsuit, the matter having been settledto their satisfaction. Notwithstanding the above, there is no release in thisAgreement for a (a) breach of thisAgreement or (ii) a44 foture breach of the Lease (as amended) or the FAA Sponsor assurances. [FAA Exhibit I, Item 40, ExhibitR-2, page 3, citingFAAExhibit I, Item4, ExhibitR-2] The FAA is persuaded that OLD recognized its liability in failing to meet the terms ofits lease with AeroPremier and negotiated an acceptable resolution for the parties. By agreeing to rent credits and a reduction in insurance payments to settle its breach does not violate the airport sponsor's ability to be financially self-sufficient under Grant Assurance 24. Court costs and a settlement expense as a result oflegal proceedings is an acceptable use ofairport revenue under Grant Assurance 25. Thus, the Associate Administrator for Airports cannot fmd that the Director erred 

### inmaking this determination with respect to the Respondent complying with its obligations under Grant Assurance 24, Fee and Rental Structure, and Grant Assurance 25,AirportRevenues, as being inconsistent with the grant assurances. 

### 6. Complainant's Reqnest forHearing In both the original Complaint and in the Amended Complaint, the Complainant requested the following: That Complainant beprovidedan evidentiary hearing; That the Complainant be affordedthe right to engage in discoverypursuant to 14 CF.R. §16.213; That Complainant be affordedthe right to take deposition testimonypursuant to 14 C.F.R. §16.212; That Complainant be afforded the right to subpoena witnesses/documents pursuant to 14 CF.R. §16.217. [FAA Exhibit I, Item 39, pages 56-58, citing FAA Exhibit I, Item 1, page 33, and Item 15, pages 43-44] The Complainant believes the Director's finding that FEMA funds were not available was in error and should be reversed. The Complainant also asks that the FAA direct that discovery be conducted to include requests for an evidentiary hearing; discovery, deposition testimony, and to subpoena witnesses and documents. [FAA Exhibit I, Item 39, page 58]14 CFR Part 16 states: 

### Under 14 C.F.R § 16.33 FinalDecisions withouthearing. The AssociateAdministrator will issue afinal decision on appeal from the Director's determination, without a hearing, where-( I) The complaint is dismissed after investigation; (2) A hearing is not required by statute and is not otherwise made available by the FAA; or (3) The FAA provides opportunity for a hearing to the respondent andthe respondent waives the opportunity for a hearing asprovided in subpartE of thispart. 45

Inthis matter, the Director dismissed the 14 CFR Part 16 Complaint. The record on appeal does not supportthe overturning ofthe Director's Determination. The record shows that the Director examined an extensive administrative record, including 56 exhibits submitted by the Complainant. The parties' otherpleadings contained ample documentation. The record does not support the need for further discovery inrendering an initial determination; the FAA may rely entirely on the complaint and responsive pleadings. Each party must file the documents that it considers sufficient to present all relevant facts and arguments necessary for the FAA to determine whether the sponsor is in compliance solely from the record. [14 CFR Part 16 paragraph (b) (1)] Flightline has not persuasively argued thatthe Determination was not decided on the basis ofthe substantial record. The Complainant is not entitled to a hearing. Under 

### § 16.31, a hearing is only made available to a sponsor where the Director's Determination finds the respondent in noncompliance and proposes the issuance ofa compliance order. In that case, the Determination would include notice ofopportunity for a hearing under subpart F ofpart 16, ifsuch an opportunity is provided by the FAA. The Determination issued in this matter did not include these findings or any notice ofavailability ofa hearing. See also section 16.109(a): The agency will provide the opportunity for a hearing if, in the Director's determination, the agency proposes to issue an order terminating eligibility for grants pursuant to 49 U.S.C. 47106(e) and 47111(d), an order suspending the payment ofgrant funds, an order withholding approval ofany new applicationto impose a passenger facility charge pursuantto section 112 ofthe Federal Aviation Administration Act of 1994,49 U.S.C. 47111(e), a cease and desist order, an order directing the refund offees unlawfully collected, or any other compliance order issued by the Administrator to carry out the provisions ofthe Acts, and required to be issued after notice and opportunity for a hearing. In cases in which a hearing is not required by statute, the FAA may provide opportunity for a hearing at its discretion. (b) In a case inwhich the agency provides the opportunity for a hearing, the Director's determination issued under 

### § 16.31 will include a statement ofthe availability ofa hearing under subpart F ofthis part. Again, Complainant is not entitled to a hearing under the above authorities and the FAA is not providing a discretionary hearing. Pursuant to 14 CPRPart 16.33, the Associate Administrator will issue a final decision from the Director's Determination, without a hearing, where the complaint is dismissed afterinvestigation. 6 [FAA Exhibit 1, Item 38, page 16] VII. CONCLUSION The FAA's role in this Appeal is to determine whether the Director erred infindings offact or conclusions oflaw in issuing the Director's Determination. The Associate Administrator finds no error by the Director in the Director's Determination. 46

Specifically, upon an appeal ofa Part 16 Director's Determination, the Associate Administrator must determine whether (a) the findings offact made by the Director are supported by a preponderance ofreliable, probative, and substantial evidence, and (b) each conclusion oflaw is made in accordance with applicable law, precedent, and public policy. 

### [See e.g. Ricks v Millington Municipal Aimort, FAA Docket No. 16-98-19 (December 30, 1999) (Final Decision and Order, page 21)] In arriving at a fmal decision on this Appeal, the FAA has reexamined the record, including the Director's Determination, the administrative record supporting the Director's Determination, the Appeal and Reply submitted bythe parties, and applicable law and policy. Based on this reexamination, this decision concludes that the Director's Determination is supported by a preponderance ofreliable, probative, and substantial evidence, and is consistent with applicable law, precedent, and FAA policy. The Appeal does not contain persuasive arguments sufficientto reverse any portion ofthe Director's Determination. The Director's Determination is affirmed. This decision constitutes the final decision ofthe Associate Administrator pursuant to 14 CFR § 16.33(a). ORDER ACCORDINGLY, itis hereby ORDERED that (1) the Director's Determination is affirmed, and (2) the Appeal is dismissed, pursuant to 14 CFR § 16.33.

6 A hearing, with oral argument, is required for either withholding approval or payment ofgrants as stated in 49 U.S.C. 471 06(d), 49 U.S.C. 47111, and 47114(c) and (e)." 78 Fed. Reg. 56135, 56137. None ofthese requirements were triggered in this matter.47

RIGHT OF APPEAL A party to this decision disclosing a substantial interest 

### in the Final Decision and Order ofthe Federal Aviation Administration may file a petition for reviewpursuant to 49 U.S.C. § 46110, in the United States Court ofAppeals for the District ofColumbia Circuit or in the Court of Appeals ofthe United States for the Circuit in which the person resides orhas its principal place ofbusiness. The petition must be filed not later than 60 days after a Final Decision and Order has been served onthe party. [14 CFR, Part 16, 

### § 16.247(a).]



# /,4;;6~~.~2~)-zjtv"-·i~~····~- Eduardo A.



# Angel~"" Associate Administrator

for AirportsIndex ofAdministrative Record FAA Exhibit 1 Flightline Gronnd, Inc. 

### v. Louisiana Department ofTransportation and Development Docket No. 16- 11-01 Item 1- Part 16 Complaint, datedFebruary 2, 2011, alleges thatthe Respondentviolated 49 U.S.C. § 47107(a) (5) and airport Grant Assurance 22(c). Includes exhibits 1-56. Item 2- Notice ofDocketing, dated February22, 2011. Item 3- Motion for Extension ofTimeto File anAnswer, dated March 15, 2011. Item 4- Answerfrom theNon-Flood ProtectionAssetManagementAuthority, dated March 16, 2011 (date stamped March 22, 2011). Item 5- Complainant's Motion to Alter Briefmg Schedule, dated March 17, 2011. Item 6- ResponsetoMotionfor Extension ofTime to File Answer, datedMarch 17, 20 11. Item 7- Complainant's Motionto Amend Style ofCase, dated March 17, 2011. Item 8- Complainant's MotiontoExtend Time to RespondtotheAnswer of the ManagementAuthority, dated March 21, 2011. Item 9- Complainant's Second Motionto Extend TimetoRespondtothe Answer of the Management Authority, dated March28, 2011. Item 10 -Airport Grant History, dated April6, 2011. Item 11- Complainant's Response to the Answer oftheManagementAuthority, dated April 5, 2011. Includes exhibits C-1 through C-65. Item 12-AffidavitofMichaelA. Hodges, MAI, datedApril5, 2011. Item 13-Respondent's FirstMotionto Extend Timeto Rebutthe Complainant'sResponse to the Answer ofthe Management Authority, dated Aprill3, 2011. Item 14- Complainant'sNotice ofthe Intentionto Moveto Amend Complainant's Response to the Answer oftheManagementAuthority BaseduponNewlyDiscoveredEvidence. Includes exhibit C-66, dated April18, 2011. Item 15- Amended Complaint, filed byFlightline Ground, Inc. anddated April22, 2011. Includes exhibits C-66 through C-71.Item 16- On April21, the Complainant filed 3 additional pleadings. Item16 includes: Complainant'sNotice ofThe Intentionto Move to Amend Complainant's Response tothe Answerof the ManagementAuthority BasedUponNewly Discovered Evidence, dated April15, 2011. Includes exhibit C-66; Complainant's Motionto Amend Complainant's Responseto the Answerof the Management Authority Filed April 6, 2011; and Complainant's Amendmentto Its Responsetothe Answerofthe ManagementAuthority Based UponNewly Discovered Evidence. Item 17- Complainant's Motionto Amend Complaint, dated Apri125, 2011. Includes exhibits C-66 through C-71. Item 18- Respondent's Motion to Suspend Procedural Process and, In The Alternative, ForAn Extension OfTime In Which To Respond. Item 19 -Notice ofExtension ofTime to Rebut the Complainant's Response to the Answer ofthe Management Authority, dated April29, 2011, extending Rebuttal deadline to May 3, 2011. 2

Item 20- SecondNotice ofExtension ofTimeregarding Respondent's Motion to SuspendProcedural Process (Item R) to allow Respondent until June 3, 2011 to file its Rebuttal, issued May 5, 2011. Item21 -Answerby LouisianaDepartment ofTransportation and Development stating it is not a properparty to the Complaint as it does nothave any legal authority overthe Non-Flood Protection Asset Management Authority. Electronically signed and dated March 15, 2011. Item 22- Briefin Opposition ofFlightline Ground, Inc. To Respondent's Motionto Suspend Procedural Process andin the Alternative, for an Extension OfTimeWithinWhich To Respond, dated April 29, 2011. Includes Exhibit A. Item 23- Briefin Opposition ofFlightline Ground, Inc. To The Prayer In The Motion OfThe LouisianaDepartment OfTransportationAnd Development Requesting Dismissal, Dated May 2, 2011. Item 24 -Amendmentto correct erratato the Complaint, dated March 24, 2011. Item 25- Rebuttal to the Complainant's Response and Amended Response and Response to the Amended Complaintbythe Management Authority, DatedJune 2, 2011. Includes: Exhibit 1 which is an email exchange regarding the obligation and de-obligation ofFEMA funds and a report prepared by The Aviation Group. Item 26- Request for Additional Information and Notice ofExtension ofTime, dated December 6, 2011.

### Item 27- Respondents Submission ofDocuments in Response to Request for Additional Information-dated January 5, 2012 Item 28- Affidavit ofBrayton Matthews- Manager and Secretary ofFlightline Ground, Inc. -datedJanuary 13,2012. Item 29- Complainant's Motion to Strike or inthe Alternative File Affidavit ofBrayton Matthews in Response to Respondent's Submission ofDocuments, dated January 13, 2012. 3



### Item 30

- Opposition to Complainant's Motion to Strike or in the Alternative File Affidavit ofBrayton Matthews in Response to Respondent's Submission ofDocuments, dated January 16, 2012. Item 31- Order Denying Motion to Strike and Granting Motion to File Affidavit, and Notice ofExtension ofTime, dated February 21,2012. Item 32 -Notice ofExtension ofTime until June 30,2012, dated April2, 2012. Item 33- Letter, dated November 16,2010, to Mr. Robert Lupo, Chairman ofthe Non-Flood Protection Asset Management Authority and Mr. Louis Capo, Director ofNon-Flood Assets, Orleans Levee District from FAA's Southwest Region Louisiana/New Mexico ADO regarding the proposed settlement agreement. Item 34 -Notice ofExtension ofTime until December 20,2011, dated September 15,2011. Item 35 -Notice ofExtension ofTime until August 31,2012, dated June 20,2012. Item 36 -Notice ofExtension ofTime to September 17, 2012, dated August 27, 2012. Item 37- Notice ofExtension ofTime to October 12, 2012, dated September 18, 2012. Item 38- On October 16,2012, the FAA issued the Director's Determination. Item 39- Complainant's Appeal ofthe Director's Determination dated Nov. 14,2012. Item 40- On November 29,2012, the Respondent filed the Reply ofRespondent to the Appeal ofthe Complainant to the Director's Determination including Respondent Exhibits R-1 through R7. Item 41- On January 30, 2013, the FAA issued a Notice ofExtension ofTime to on or about June 2, 2013. Item 42- On March 7, 2013, the Complainant submitted an Objection to Failure ofthe Associate Administrator to Issue a Final Decision Even with the Extended Time Limits. Item 43- On June 7, 2013, the FAA issued a Notice ofExtension ofTime to on or about

### September 16,2013. Item 44- OnJune 20, 2013, the Complainant submitted an Objection to Failure ofthe Associate Administrator to Issue a Final Decision Even with the Extended Time Limits. Item 45- On September 17,2013, the FAA issued a Notice ofExtension ofTime to on or about January 31,2014. Item 46- On September 24, 2013, the Complainant submitted an Objectionto Failure ofthe Associate Administrator to Issue a Final Decision Even with the Extended Time Limits. Item 47- OnJanuary 30,2014, the FAA issued a Notice ofExtension ofTime to on or about June 2, 2014. Item 48

- On May 29, 2014, the FAA issued aN otice ofExtension ofTime to on or about October 1, 2014. Item 49- On October 10,2014, the FAA issued a Notice ofExtension ofTime to on or about November 7, 2014. Item SO- 

### On December 10,2014, the FAA issued a Notice ofExtension ofTime to on or about January 16,2015. 4