BEFORE THE UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

FEDERAL AVIATION ADMINISTRATION

MANSFIELD HELIFLIGHT, INC.

Complainant,

v. Docket No. 16-14-06

CITY OF BURLINGTON,

VERMONT

Respondent.

REBUTTAL OF THE CITY OF BURLINGTON, VERMONT

Pursuant to 14 C.F.R. § 16.23(f), and FAA’s December 8, 2014 order granting an

extension of time, Respondent, the City of Burlington, Vermont (“City” or “Respondent”),

submits this Rebuttal in response to the Consolidated Reply and Answer to Respondents Answer

and Motion for Summary Judgment (“Reply”) filed by Mansfield Heliflight, Inc.

(“Complainant”). The City incorporates all of the arguments made in, and exhibits submitted

with, its Consolidated Answer, Motion for Summary Judgment, and Motion to Dismiss

(“Answer”), and reiterates those arguments as if restated herein. To the extent Complainant

raises new allegations in its Reply that are not expressly addressed in this Rebuttal, such

allegations are hereby denied.

I. INTRODUCTION

Complainant has the burden of proof for showing noncompliance, 14 C.F.R.

§ 1 6.23(k)(1), and it must carry that burden by a preponderance of substantial and credible
evidence. See BMI Salvage Corp. v. Miami-Dade Cnty., Fla., FAA Docket No. 16-05-16, Final

Decision and Order on Remand at 51 (Apr. 15, 2011); Aerodynamics ofReading, Inc. v. Reading

Reg ‘1 Airport Auth., FAA Docket No. 16-00-03, Final Decision and Order at 15-16 (July 23,

2001). “First-person accounts of conversations and an abundance of argumentative opinion and

criticism do not equate to substantial and credible evidence.” Meyer v. City ofCincinnati, FAA

Docket No. 16-12-14, Director’s Determination at 25 (Sept. 12, 2014). Here, aside from offering

conjectures-based on unfounded innuendo, Complainant has introduced no evidence of

noncompliance.

In its Answer, the City showed, based on the evidentiary record (much of which was

introduced by Complainant), why each of Complainant’s claims of noncompliance are wrong. In

its Reply, Complainant merely rehashes its own conspiracy theories about how the City tried to

exclude Complainant from the Airport. But nothing that Complainant adds to the record—either

in its arguments or with new evidence—supports the proposition that the City is in violation of

Grant Assurances. On the contrary, the evidence clearly shows that the City is, and has been,

addressing the day-to-day needs and long-term planning goals of the Airport while appropriately

engaging with Complainant. The City is aware that it is required to provide reasonable Airport

access to aeronautical users without unjust or undue discrimination. As the administrative record

shows, the City has done so here by responding to Complainant’s inquiries and working to

accommodate its many requests.

It is the characterization of, and the motivation for, the City’s dealings with Complainant

that are in dispute, not the relevant facts themselves. Complainant attempts to paint the City’s

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responses and dealings as incomplete and evasive,1 but the City has maintained professional and

appropriate open channels of communication with Complainant. The City should not be

obligated to give Complainant special treatment. Indeed, it might be improper to do so. The

City’s actions have been reasonable and in compliance with its Federal obligations.

II. THE CITY’S DEALINGS WITH COMPLAINANT HAVE BEEN FAIR

AND IN COMPLIANCE WITH ITS FEDERAL OBLIGATIONS

Because Complainant continues to rely almost exclusively on rhetorical arguments, it is

important to revisit the relevant, material facts that are actually supported by the record evidence.

It is on these facts that the City rests2 and relies in support of its Motion for Summary Judgment.3

Complainant has made different and often vague requests for space at the Airport,

including: hangar space to store aircraft, hangar space from which to offer aeronautical services

(sometimes to run an FBO, other times suggesting that it wished to provide maintenance services

or charter services), office space (again, at different times suggesting different proposed uses),

and/or raw land in which to build FBO facilities. Complainant argues that its requests have been

clear—it wishes to start a new FBO. See, e.g., Reply at 3. While it is true that Complainant has

stated from time to time that it wishes to open a new FBO (in fact, at one point the City believed

l For example, Complainant alleges that after the meeting in January 2013, Director of Aviation Gene Richards

refused to “engage [Complainant] directly on the subject ofits interest in opening an FBO.” Reply at 14 n. 8. Not

only is this statement unsupported, but it is actually contradicted by record evidence introduced by Complainant.

See, e.g., Complaint Ex. 20 (October 2013 email exchange between Mr. Richards and Complainant); Complaint Ex.

21 (same); Complaint Ex. 33 (May 2014 email exchange between Mr. Richards and Complainant).

2 The City sees no need to introduce additional evidence, and rejects Complainant’s suggestion that the City must

put forth additional evidence ofits own. Reply at 2. First, although the City has done so here, it is not the airport

sponsor’s burden to show that it remains in compliance with its Federal obligations. Second, a respondent in a Part

16 proceeding should be able to base its arguments on complainant’s own evidence when, as here, that evidence

fails to show noncompliance. Third, the City introduced sufficient evidence with its Answer that, together with the

evidence introduced by Complainant, fully supports the City’s narrative and legal arguments. The City stands ready,

however, to make available any additional information that FAA may require for the determination ofthis case.

Together with its Answer and Motion for Summary Judgment, the City also filed a Motion to Dismiss certain

claims. Answer at 52-60. The City notes that Complainant did not respond to, or in any way address, the arguments

made in the Motion to Dismiss. Thus, the Motion to Dismiss is now unopposed.

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that it had reached conceptual agreement on the development of a new area for such use),

Complainant’s subsequent requests for space have not always appeared to be in pursuit of that

goal. At times, Complainant requested specific facilities that were (and still are) leased to others.

Complainant also asked to look at any and all available space, most of which would be

inappropriate for operating an FBO. More recently, Complainant asked to lease undeveloped

land before suddenly reversing course and again asking for already developed hangar and office

space. At various times, the City has understood Complainant to be asking for space to, among

other things: open a new FBO, run a charter business, store aircraft, and/or perform (or perhaps

offer to the public) aircraft maintenance services. Despite the lack of clarity or consistency in

the various requests, Airport staff has responded to Complainant timely and in good faith—every

time.

A. The City worked with Complainantfrom its initial request to open an

FBO at the Airport.

From the moment that Complainant first approached Airport staff about the possibility of

doing business at the Airport, Airport staff has consistently communicated one basic point:

although the Airport has no available, already-developed facilities suitable for an FBO, there are

undeveloped aeronautical areas that could accommodate such an operation.4 See Answer Ex. 1,

¶ 4; Complaint Ex. 24. Whether Complainant “accepted Respondent’s contention that there was

no room for a second FBO in existing facilities,” Reply at 6 n. 1, is beside the point.

Complainant has introduced no evidence suggesting that the underlying premise is untrue5 or that

~ The suggestion that ifthe City were “legitimately interested” in Complainant developing new space it would

produce internal emails, Reply at 7, is absurd. The City should not be required to hunt for internal documents when

the documentary evidence introduced by Complainant sufficiently supports the City’s position.

~ Relatedly, Complainant originally alleged that “Heritage has yet to put the ASH Hanger [sic] or Atlantic Hanger

[sic] to productive use,” Complaint, ¶ 39, introducing photographs allegedly depicting vacant areas in both

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the parcels proposed by the City for development are not suitable for FBO activities. Eventually,

just a few weeks before filing its Part 16 complaint,6 Complainant announced that it wanted to

move forward with a plan to lease some of the undeveloped land that had been identified by

Airport staff~ “on which [it wished] to build a suitable structure for FBO operations.” Complaint

Ex. 34 at 2.

While early on Complainant expressed a preference to lease existing facilities, the City

believes that its Federal obligations did not require it to acquiesce to Complainant’s requests for

particular facilities, especially since those facilities were being used by, and under lease to,

others. Moreover, while Complainant’s initial request was for space in which to run an FBO,

thereafter the purpose for which Complainant sought space changed.7 In each instance, Airport

buildings. Complaint Ex. 12 at 1-6. The City denied that claim. Answer at 17, ¶ 39; see also Answer Ex. 1, ¶ 5.

Complainant now hedges its bets, insisting that it “has provided photographic evidence demonstrating that properties

in Heritage’s current leasehold at the Airport (i.e., the ASH Hanger [sic] terminal, and the GA terminal associated

with the Atlantic Hanger [sic]) are virtually empty and unused.” Reply at 34 (emphasis added). First, Complainant

provides no foundation for the photographs it placed in the record. It is undeniable that whatever space they show

appeared to be empty at the time the photographs were taken. But it does not follow that the facilities are not being

put to practical use or that they are “virtually” empty and unused. In fact, both the ASH Hangar and the Atlantic

Hangar (better known as the South Hangar) are being used. The ASH Hangar aircraft storage space is fully

occupied. Complainant stores some ofits aircraft and has office space there. While the hangar currently has some

office space available, upon information and belief, Heritage is in active negotiations with a tenant to occupy much

ofit. While the lobby area may be currently vacant, it is only a small portion ofthe building. And while the South

Hangar may have had at some time unused office space, the aircraft storage space in that building is fully occupied

by at least four aircraft owners. The City stands by its denial ofthe allegation. It is unfounded and untrue, and

Complainant’s proffered evidence—photographs without a foundation that are not representative ofthe overall

space—does not change these facts.

6 Negotiations ceased after Complainant filed its Part 16 complaint.

~ In March 2013, Complainant stated that it was interested in being an FBO at the Airport, but would not submit

additional information unless it got some indication that the City was likely to seek another FBO. Complaint Ex. 13,

§ 2.0. Over six months later, Complainant stated it wanted to “introduce services that have never been available at

the Burlington airport as well as return [dropped] services” such as a “full service charter operation.” Complaint Ex.

19. Yet over the following few weeks, Complainant changed tack, saying that “securing space at the Airport” had

become a priority, Complaint Ex. 22, and that it wanted to look at “everything available now, as well as whatever

space could/would be available in the future,” Complaint Ex. 23. That request was not specific to any particular

aeronautical service, but instead was accompanied by a list of aircraft that Complainant owns or operates, without

indicating which aircraft, if any, might be involved in the inquiry. Id. The following month, Complainant sent a

letter enumerating its business capabilities and objectives and how they “dovetail[ed] with its desire to secure a lease

that provides airport access.” Complaint Ex. 25. Five months later, Complainant reiterated its goal to provide FBO

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staff continued working with Complainant, doing its best to respond to each inquiry, despite

Complainant’s moving target. See, e.g., Complaint Ex. 20 (stating that Airport staff would keep

Complainant updated on any agreement on the Valley and North Hangars); Complaint Ex. 24

(detailing facilities available for lease at the Airport, offering the possibility that Complainant

might construct facilities, and asking to schedule meeting with Complainant); Complaint Ex. 26

at 3 (describing lease agreement with Atlantic); Complaint Ex. 28 at 1-2 (providing information

about leasing various facilities at the Airport); Complaint Ex. 40 at 1, 3 (telling Complainant that

Airport staff was working on a draft lease for office space and supplying estimated timeline for

approval).

Complainant faults the City for not explicitly asking for a business plan and for

mentioning the need for a business plan at a meeting that Complainant did not attend.8 Reply

at 22. Whether the City should have asked directly, or what Complainant should have provided,

is not relevant to the compliance questions raised by Complainant in this proceeding. What is

services, but this time (finally) also wanting to discuss the building of a new structure and suggesting that it might

want to include charter operations, maintenance services, and fueling. Complaint Ex. 28 at 3-4. Then, a few weeks

later, Complainant changed course and asked about moving its aircraft based at the Airport from the ASH Hangar to

the North Hangar, suggesting (but not requesting) that it expected to lease storage space on comparable terms to its

lease with Heritage. Complaint Ex. 31 at 1. Eventually, five days later, Complainant actually requested office space

in the North Hangar. Complaint Ex. 32 at I. But four weeks later, Complainant appeared to go back, resuming its

interest in building new facilities for an FBO, Complaint Ex. 34, before it tacked again and asked for confirmation

that its office lease in the North Hangar would allow it to provide FBO services from that space, Complaint Ex. 43

at 1. From the Reply, the City now learns that the office space would have been used only to “provide maintenance

services, and possibly charter services.” Reply at 19 n. 12 (without explaining how Complainant would offer

aircraft maintenance services—presumably to the public—using only office space).

~ The suggestion that Director of Aviation Richards “conveniently” raised the need for a business plan at an Airport

Commission meeting that Complainant did not attend, Reply at 22, is an example ofthe baseless innuendo that

permeates the Complaint and Reply. Mr. Richards’ statement was no secret. Complainant could easily have found

out about Richards’ statement by attending the meeting or reading the minutes. See Complaint Ex. 18, § 3.1. But,

once again, the point is not whether the City specifically asked for a business plan. What is relevant in response to

Complainant’s arguments is that Airport staff continued working to accommodate Complainant despite

Complainant’s moving target — i.e., the City believes that it has gone above and beyond what is required by its Grant

Assurances in its dealings with Complainant.

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relevant is that Airport staff properly responded to each of Complainant’s requests for space

rather than dismissing them out-of-hand for lack of specificity.

B. The City accommodated Complainant’s request to explore leasing “any

available space.”

After its initial request to lease space for an FBO, Complainant “request[ed] a lease of

any available space at the airport” on October 18, 2013. Complaint Ex. 21 at 2. Promptly,

Airport staff asked for clarification and offered to compile a list of vacant facilities and a map

showing the various locations. Complaint Ex. 23. Complainant reiterated its expansive wish to

“look at everything available now, as well as whatever space could/would be available in the

future,” and included a list of the aircraft it owns and operates: “Beech 1900D, Citation II, TBM

700, King Air 350, Cheyenne 4, Corvette 26, Cessna’s [sic] of various models, Sikorsky S76,

Bell 407, 206 and 412, Robinson R44, R22, ect [sic].” Id.

On October 30, 2013, Airport staff responded to Complainant with a list of all available

facilities, including the relevant square footage for each space. Complaint Ex. 24 at 2.

Specifically, the City offered: five different spaces in the Terminal Building, a block of space in

the FAA Building, and another block of space at 700 Airport Parkway. Id. Airport staff also

referred to the Airport’s ongoing negotiations with Heritage and indicated that the Airport would

likely reacquire some of the areas leased and used by Heritage, but until an agreement was in

place and details were finalized, none of it could be offered to Complainant. Id. Further, Airport

staff suggested that Complainant might consider a land lease in which to construct new facilities,

echoing its January 2013 suggestion that Complainant consider developing a new site. See

Answer Ex. 1, ¶ 4. Airport staff offered to arrange a meeting to visit the (then) currently

available sites, discuss other possibilities, and review the Airport Master Plan. Complaint Ex. 24

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at 1-3; see also Answer Ex. 5. There can be no doubt that Airport staff was willing to work with

Complainant as Complainant continued to adjust its business plans and goals.

Complainant replied with a list of services that it wished to offer at the Airport—some

(presumably) right away, some after obtaining FAA certification, and yet others in some

undefined future—including: charter operations, scheduled flight operations, general aviation

maintenance services, fueling services, and helicopter operations. Complaint Ex. 25. A few

days later, Complainant met again with Airport staff. Complaint, ¶ 58; Answer at 19, ¶ 58. At

that meeting, Airport staff again explained the unavailability of ready-built facilities and again

offered the option of constructing new facilities. Answer at 19-20, ¶~J 58-66. Airport staff also

committed to keeping Complainant updated on the Airport’s progress in settlement negotiations

with Heritage, to the extent possible and permitted under its legal obligations, Id. at 20, ¶ 67, and

expressed interest in having a second FBO at the Airport, Complaint Ex. 28 at 4~9

C. The City tried to accommodate Complainant’s interest in leasing space

for aircraft storage.

In an April 7 letter, while noting the length of time that it was taking the City to settle

with Heritage, Complainant asked for a meeting to discuss potential sites for new construction,

and the process for obtaining the requisite approvals. Complaint Ex. 28 at 3-4. Although

Complainant asked to be kept informed of the availability of space at certain existing buildings

“that might be suitable for an FBO operation,” it also stated that it “look[ed] forward to

~ The City submitted the “Vision 2030 Master Plan Update” with its Answer to show that planned future

development for the Airport includes general aviation facilities, fuel storage, and aircraft maintenance areas. The

Master Plan update does not specifically state that the area is reserved for an FBO because the ultimate use ofthe

space will depend, at least in part, on the actual development ofthe land and the aeronautical service providers that

will use it. Answer Ex. 5 at 9.

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beginning discussions about constructing new space at the airport.” Complaint Ex. 28 at 4.

Airport staff responded timely to set up a meeting. Complaint Ex. 29.

The meeting happened on April 29. Complaint, ¶ 73; Answer at 21, ¶ 73. At the

meeting, Airport staff told Complainant that, although negotiations with Heritage were ongoing,

if and when the North Hangar and Valley Hangar reverted to the City, the City would request

proposals for the management and repair of the facilities.’0 Complaint, ¶ 75; Answer at 21, ¶ 75.

At the meeting, the parties also discussed development of a new area. Airport staff told

Complainant that next steps would include the parties entering into a negotiated lease (similar to

the Heritage FBO agreement) and Complainant gaining a better understanding of the building

permit requirements.’~ The City and Complainant also discussed insurance and ground lease

rental rates.’2 After the meeting, Complainant emailed to confirm its requests for a copy of the

standard FBO agreement, a permit number, and insurance requirements. Answer Ex. 15 at 3.

Airport staff responded with the requested information.’3 Id. at 1.

10 Complainant told Airport staffthat it wanted to receive the request for proposals when it was released. Reply

Ex. 3. The City has not yet requested proposals, although the issue has been discussed with the Board ofAirport

Commissioners. Answer Ex. 12, § 9.0. In the interim, all aircraft storage space in the hangar is leased and the City

continues to receive revenue from its tenants.

~ To the latter, Airport stafftold Complainant that research of an earlier building permit for that space may, among

other things, disclose additional requirements, and in a follow-up email, the City sent the permit number to

Complainant to aid in Complainant’s research. Answer Ex. 15 at 1.

12 Contrary to Complainant’s allegation, Reply at 7, Airport staff never represented that this was “the entire universe

ofinformation required in order for [Complainant] to proceed with its development of new facilities.” At the very

least, in order to proceed, Complainant would need to: (1) negotiate its own FBO lease, (2) research whether the

existing building permit is still valid or ifit would need to obtain new permits that would be predicated on as yetundisclosed details ofthe actual uses for the new facilities, and (3) develop and obtain approval for the plans and

specifications for the new facilities. The first two issues were discussed at the April meeting, Answer at 21, ¶ 75,

and the last should come as no surprise.

‘~ Complainant complains that “it was not until six weeks after meeting with Airport staff... that [Complainant] was

finally provided with” the requested material. Reply at 6-7. But Complainant’s narrative fails to note that the April

29 request for information and May 16 follow-up email to Airport staff were sent to the wrong email addresses.

Answer Ex. 15 at 1. Once Airport staff received the email—forwarded by the City’s counsel—the information was

promptly provided to Complainant. Id.

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On May 2, Complainant asked to transfer two aircraft to the North Hangar. These

aircraft were at the time, and are currently, hangared in the ASH Hangar pursuant to

Complainant’s agreement with Heritage. Complaint Ex. 31 at 1. Airport staff requested the

square footage necessary to accommodate the two aircraft, and Complainant responded with

aircraft dimensions. Complaint Ex. 32 at 1. Director of Aviation Richards replied that Airport

staff was working with a group of people interested in space in the North Hangar and hoped to

get back to everyone shortly. Complaint Ex. 33 at 1.

Airport staff kept Complainant updated on the progress, again noting that there were

multiple requests for hangar space and that the City was trying to accommodate everyone.

Complaint Exs. 35 & 36. Although Airport staff initially believed there would be enough hangar

space to accommodate all requests, that turned out not to be the case. Complaint, ¶ 91; Answer

at 23, ¶ 91. With only limited space available, the City leased the space—on a month-to-month

basis—to aircraft operators who had pending storage space requests.’4

Complainant now argues that its request for business space should have taken precedence

over requests for aircraft storage. Reply at 39-40. First, it is news to the City that Complainant’s

request for aircraft space in the North Hangar was so that it could conduct business from it.15

Complainant simply asked to move its aircraft from the ASH Hangar to the North Hangar.

~ Complainant misconstrues the nature of Messrs. Mendal and Sporn’s requests. See Reply at 15-16 & n.9. When

they asked to lease hangar space for aircraft storage in November 2013, their request was not specific to the North

Hangar. At the time, Mr. Richards told them both that, although there was no aircraft storage space available, he

would keep them updated. Answer Ex. 1, ¶~j 9-10. Complainant now implies a conspiracy to keep it away from the

North Hangar based on the timing ofthe requests. See Reply at 8 n.2. Such allegation is nothing more than baseless

innuendo and is hereby denied.

15 Complainant fails to distinguish between its statements that it is interested in running a business, such as a charter

operation, see Complaint Ex. 19, and its request to “get the aircraft moved ASAP,” Complaint Ex. 31 at 1.

Complainant now treats its request to move the aircraft as a request for space to run a charter operation, see Reply at

18-19, suggesting that Airport staff should have earlier divined its real intentions.

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Complaint Ex. 31 at 1. Although it is true that the City knew about Complainant’s interest in

developing a new FBO, at no time did Complainant suggest that the requested aircraft hangar

space would be used to run an aeronautical business.’6 Even now, it is unclear what type of

aeronautical business Complainant would have conducted, since one of the aircraft it wanted to

move to the North Hangar was inoperable.’7 Second, while the City admits that North Ramp

Aviation and Contact Aero are month-to-month North Hangar tenants whose leases were

assumed by the City when the North Hangar reverted to the City, Reply at 38, these preexisting

tenants are not similarly situated to Complainant who was not operating out of the North Hangar

when operational control was transferred to the City. Lastly, even ifthe City had granted

Complainant a lease for aircraft hangar space, it would have been on a month-to-month basis

(similar to all other North Hangar leases)—hardly the type of leasehold rights necessary to begin

operating a new aeronautical business.

D. The City worked diligently on Complainant’s requestfor office space,

but it turned out to be another moving target.

At the same time that Complainant provided aircraft dimensions for possible aircraft

space in the North Hangar, it also inquired about leasing office space that it had previously

occupied. Complaint Ex. 32 at 1. After some exchanges to clarify the space in question, Airport

staff began working on a lease. Complaint Ex. 40 at 1-2. On July 9, Airport staff informed

Complainant that a draft lease would be available by July 18 or early the following week, and

detailed the steps necessary for formal approval of the agreement. Id. at 1. Then, on July 18,

16 At the time Complainant and the City were discussing a brand new development elsewhere at the Airport to

accommodate Complainant’s business.

17 Complainant does not refute the City’s understanding that one of Complainant’s aircraft currently hangared in the

ASH Hangar has been inoperable since at least 2012. See Answer at 8 n. 9.

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just as the City was about to make available a draft lease, Complainant announced that it was

“ultimately going to want to provide FBO services from the office so the lease should take that

into account.” Complaint Ex. 43 at 1.18 This new requirement was surprising because it

conflicted with Complainant’s contemporaneous assertion that it was “ready to close a deal” on

the land lease for new construction. Complaint Ex. 34 at 2. Further highlighting the lack of

clarity in Complainant’s request, Complainant now claims on Reply that it “had no intention of

operating a full-service FBO out of an office. . . , but that it did believe that it could begin to

provide maintenance services, and possibly charter services.” Reply at 19 n.12.

E. The City tried (butfailed) to clarify communications with Complainant.

On July 22, 2014, the Assistant City Attorney emailed Complainant’s counsel.

Complaint Ex. 44. The email was meant to clarify the status of Complainant’s then-pending

requests and inquiries, including: Complainant’s multiple points of contact,19 the City’s decision

to seek a property manager for the North Hangar, and Complainant’s last-minute request that the

office lease allow for FBO services. Complaint Ex. 44. Complainant’s counsel responded that

‘~ While the draft office lease was pending, Complainant also requested copies ofthe Airport’s minimum standards.

Complaint, ¶ 102; Answer at 24, ¶ 102; Complaint Ex. 41 at 1. It is undisputed that the Airport did not have

minimum standards at that time. However, Complainant infuses a level of conspiracy into the City’s development

of minimum standards that has no basis in fact. See Reply at 20-21. On the contrary, based on the advice of FAA

Region, the City is working to develop thoughtful, appropriate standards for the Airport in order to attract new

aeronautical business. Answer at 12-13. This undertaking is independent of any dealings with Complainant. Id.

19 The Airport experienced considerable turnover in administrative personnel in 2014. Ryan Betcher left, Answer

Ex. 3, ¶ 9, and since then, Heather Kendrew has resigned to take another job, and Robert McEwing has retired.

Contrary to Complainant’s claims of malicious intent, Reply at 16 n.l0, as responsibilities shifted, Airport staff

notified Complainant ofthe appropriate new contact, doing its best to be responsive to Complainant’s various

inquiries. See, e.g. Complaint Ex. 17, ¶ 4 (Complainant states that on June 20, 2014, Heather Kendrew informed it

that Nicolas Longo was handling leases for the Airport but was out ofthe office until June 24); but see Reply at 18

n. 11 (Complainant appears to change its story when it alleges that Heather Kendrew advised Tina Lindberg to try

again after June 24 not because of Nicolas Longo’s actual availability, but rather because of malicious intent).

Airport staff has consistently made itself available to work with Complainant.

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same day, noting at the end of his email that the parties “appear to have come to the end of the

road here.” Reply Ex. 4. One week later, Complainant filed its Part 16 Complaint.

The timing of the Complaint is representative of the City’s dealings with Complainant.

Complainant takes the time it needs and wants to reply to Airport staff and convey its interest in

different options—and it is free to do so. The City does not purport to question Complainant’s

business judgments. However, Complainant seems to expect that Airport staff should respond

immediately to each of its various requests, even in cases where Complainant asks Airport staff

to do an about-face, adding new or different requests, and despite the City’s explanations about

the time required to go through internal review processes. Complainant now criticizes the City’s

measured responses as untimely and attributes malice and deceit to Airport staff. That is

nonsense.

The City has not deceived, neglected, or refused to work with Complainant. The City did

not unjustly discriminate against Complainant and did not refuse it access to the Airport. On the

contrary, the City has continued to offer space to build new FBO facilities, and has devoted

significant resources to fulfilling Complainant’s other requests to the extentpossible and in light

of the City’s Federal obligations.

III. COMPLAINANT’S ASSERTIONS ABOUT THE CITY’S

RELATIONSHIPS WITH THIRD PARTIES ARE WRONG AND

IRRELEVANT TO THIS PROCEEDING

Complainant’s claim of noncompliance is based on not only its mischaracterization of the

City’s continued efforts to respond to its inquiries and requests, but also its mistaken view—both

of the nature and the relevance—of the City’s relationships with Heritage and BTV Avcenter

Inc., d/b/a Atlantic Aviation (“Atlantic”). While it is possible that an airport sponsor’s

interactions with some parties could impact the sponsor’s compliance obligations towards other

aeronautical users, that is not the case here. Specifically, Complainant rehashes the claim that

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the City created an exclusive right because, allegedly: (1) Heritage is not fully utilizing the

space it controls; (2) the City failed to “take action” when Heritage acquired a controlling

interest in Atlantic in 2011, eighteen months before Complainant first approached the City about

opening a new FBO; and (3) the City “actively conspired” in 2013 to encourage Atlantic to

purchase Heritage rather than encouraging Heritage to sell to Complainant. All three allegations

are unproven and untrue. And even ifthey were true, they are irrelevant to the compliance

claims raised by Complainant.

A. There is nothing inherently improper about Heritage’s space.

Complainant alleges that the City is somehow excluding it from the Airport because it

allowed Heritage to “acquire and hold property that greatly exceeds its immediate needs,” and

this action is tantamount to “land grabbing.” Reply at 11, 27, 34. Complainant is both factually

and legally wrong.

The City’s decision to use the tax litigation settlement negotiations to more

“appropriately tailor the size of Heritage’s leasehold to Heritage’s current service offerings” was

not an “admission. . . that, at least prior to the settlement, Heritage was not making use of all of

its leased properties at the Airport.” Reply at 11 & n.4. Prior to the settlement, Heritage’s

business activities included the management of the North Hangar and the Valley Hangar, in

which Heritage subleased space to other Airport (sub)tenants for office and aircraft storage

purposes. The City’s repossession of these buildings reflects the City’s opinion of the space

required to continue current FBO activities, predicated on the give and take of settlement

negotiations and the City’s leverage gained through litigation. The City believes that its Federal

obligations did not require it to take back any facilities or facilities that in Complainant’s opinion

were more desirable. See Ricks v. Millington Mun. Airport Auth., FAA Docket No. 16-98-19,

Director’s Determination at 25 (July 1, 1999) (in finding that respondent was in compliance with

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Grant Assurance 23 because there was space available at the airport, the Director explained that

“FAA’s policy makes clear that [even] when all or most of the available land and improvements

have been leased to a single enterprise, an arbitrary division or restriction to create an

opportunity for a competitive enterprise is not required merely to comply with the exclusive

rights policy”).

Since the North Hangar and the Valley Hangar reverted to the City on May 8, 2014, there

has been no indication, and Complainant provides no reliable evidence,20 that Heritage is not

utilizing the remaining property in a productive manner. And the two facilities that reverted to

the City are full. The Valley Hangar was and remains fully occupied. Complaint ¶ 75. As

evidenced by the fact that the City could only fit two additional aircraft after it regained

operational control, the North Hangar’s aircraft parking space was productively used when the

facility was under Heritage’s operational control, and remains full today.

Even assuming, arguendo, that portions of Heritage’s space is currently underutilized,

Complainant has “failed to show how. . . alleged underutilization amounts to a grant assurance

violation.” Bisti Aviation, Inc. v. City ofFarmington, NM, FAA Docket No. 16-07-01,

Director’s Determination at 18 (Dec. 4, 2007) (dismissing allegation of noncompliance with

Grant Assurance 23). Similar to the complainant in Bisti, Complainant has neither alleged nor

introduced any evidence “that aeronautical users are not being accommodated at the Airport

through [Heritage’s] alleged business practices” and, to the City’s knowledge, there have been

no “other complaints from users. . . alleging they are being denied services at the Airport.” Id.

Complainant’s statement, Reply at 35, that the City has not produced additional “evidence of its

20 See note 5, above.

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own” to refute the claim of underutilization is meritless. “[G]rant assurances do not require [the

City) to verify the daily business practices/behavior of an aeronautical tenant nor the daily

occupancy rates of a tenants aircraft storage hangars.” Bisti at 18. While the City has not

micromanaged Heritage, the City is satisfied that Heritage is using its space in accordance with

its contractual obligations, and Complainant does not claim that Heritage’s contractual

obligations violate Grant Assurances.

Under the circumstances at the Airport, Heritage is not “land grabbing.” While the City

readily acknowledges that the “intent of Grant Assurance 23. . . is that an airport sponsor not

lease all available land to one FBO thereby granting an exclusive right,” id. at 18, all available

land has not been leased. As the Airport staff has explained repeatedly to Complainant, there is

undeveloped land available for lease. That space has been offered to, and seemingly accepted

by, Complainant, and Complainant does not claim that the space is not usable for FBO purposes.

The City has acted consistent with its Grant Assurance 23 obligations.

B. The City appropriately responded to Heritage’s acquisition of controlling

interest in Atlantic.

In 2011, eighteen months before Complainant first approached the City for space at the

Airport, Heritage acquired a controlling interest of Atlantic. This transaction took place between

Heritage and Atlantic’s previous owner and without prior notice to, or approval by, the City.

Answer at 3-4. Complainant claims that “Heritage’s acquisition of Atlantic, and Respondent’s

acquiescence to such, constitutes a violation of Grant Assurance 23.” Reply at 8. Complainant

further claims (for the first time) that the City is likely in violation of Grant Assurance 5 due to

the terms of the Atlantic FBO agreement. Reply at 10.21

21 To the extent Complainant seeks to add a new claim of noncompliance, it is procedurally improper because

16
Complainant is wrong. The Atlantic-Heritage deal did not create an exclusive right, and

neither the Atlantic nor the Heritage contracts restrict the City’s ability to preserve its rights and

powers.

1. Heritage’s acquisition of Atlantic’s ownership interest well before

Complainant made its request for space at the Airport does not

support a finding that the City has granted an exclusive right.

Complainant appears to suggest that the City’s tacit acquiescence to the Heritage-Atlantic

transaction created a constructive exclusive right in the surviving entity that is now preventing

Complainant from accessing the Airport to conduct aeronautical activities or offer aeronautical

services to the public. This allegation ignores the fact that: (1) the City has not denied

Complainant access to operate an FBO—an essential component of a finding of a violation of

Grant Assurance 23, Answer at 36-39; (2) the City did not consent to the Heritage-Atlantic

transaction and has made it clear to the parties that consent has not been granted and that they

each remain obligated to the City, Answer at 4, 40; see also note 24 below; and (3) the relevant

contracts are subordinated to the City’s obligations under the Grant Assurances, including the

obligation to not permit exclusive aeronautical rights at the Airport, see Section III.B.2 below.

But even setting aside these deficiencies, Complainant still fails to plead facts or provide any

reliable, probative evidence to support its allegation.

Additionally, Federal requirements should not obligate a sponsor to unravel events that

occurred well before a potential new entrant FBO requests space at an airport. In this case, the

fact that the transaction led to having a single FBO at the Airport eighteen months prior to

Complainant’s request is not, by itself, evidence that the City acquiesced to the creation of an

Complainant filed neither a motion nor supporting documentation to amend its original complaint as required under

14 C.F.R. § 16.23(j). The City, nevertheless, responds to this new claim in order to develop a more complete record.

17
exclusive right. See Answer at 40-41. The City could not have chosen the incumbent over

Complainant because the Atlantic-Heritage transaction was completed prior to Complainant

expressing any interest in starting an FBO at the Airport. All the evidence shows is that:

(1) there used to be two FBOs and now, for the time being, there is only one;22 and (2) the

particular Airport facilities that Complainant prefers to use to start its new business are not

available because they are leased, used, and controlled by that one remaining FBO (or, in the

case of the two hangars that more recently reverted to the City, by other third parties). Neither of

those two conclusions is particularly remarkable or evidence, standing alone, that a constructive

exclusive right is preventing Complainant from gaining access to the Airport.

2. The City has retained all necessary rights and powers to operate

the Airport and comply with Grant Assurances.

In passing, Complainant tries to argue that the terms of the Atlantic FBO agreement

violate Grant Assurance 5 because they “granted a property interest. . . that restrict[s] the airport

sponsor’s ability to preserve its rights and powers to operate the airport in compliance with the

applicable federal obligations.” Reply at 10 (internal quotations omitted). But Complainant fails

to explain which provision of the Atlantic FBO agreement violates Grant Assurance 5, or how

any alleged violation occurs. See 14 C.F.R. § 16.23(b)(3) and (4). All Complainant argues is

that “Heritage was free to acquire a monopoly over FBO services at the Airport without

requiring the City’s consent.” Id.

As noted in its Answer, the City denies that Heritage has a monopoly over FBO services

at the Airport, and Complainant does not even attempt to prove monopoly power.23 More

22 In fact, it can be inferred from Complainant’s various statements that its interest in opening a new FBO at the

Airport stems from the fact that the Airport had only one FBO at the time.

23 Complainant does not define the product or geographic market that it claims to have been monopolized by

18
importantly, however, consistent with its obligations and in accordance with FAA best practices,

FAA Order 51 90.6B at 6-2 (2009), all relevant Airport agreements include a subordination

clause stating that ifthere is a conflict between the terms of the agreement and the Grant

Assurances, the Grant Assurances will govern. See Complaint Ex. 3, § 5; Complaint Ex. 4, § 6.

Should the City need to modify any of these agreements to maintain compliance with its Federal

obligations, it has the contractual right to do so. There can be no Grant Assurance 5 violation as

a result of an agreement when the agreement itself is subordinated to the requirements of Grant

Assurance 5.

The City has not consented to the Heritage-Atlantic transaction and has not relinquished

its ability to comply with Grant Assurances in the first place.24 But to the extent that

Complainant is alleging that the Heritage agreement should be modified, no modification is

needed, because those agreements do not deny Complainant access to the Airport.

C. The 2013 negotiations between Atlantic and Heritage do not prove a

violation of Grant Assurances.

Complainant also alleges that the City “overt[ly] violat[ed] Grant Assurances 22 and 23”

by actively encouraging Atlantic to purchase Heritage and “willfully” seeking to prevent

Mansfield from purchasing Heritage assets. Reply at 6; see also id. at 7, 27. As the City has not

engaged in such conduct, it is unclear to what events Complainant is referring, but the City

assumes that Complainant is referring to reported discussions between Heritage and Atlantic in

2013 in which Atlantic’s previous owner is said to have considered reacquiring operational

control over some or all of Heritage’s business concerns at the Airport.

Heritage.

24 The City has not acquiesced to the transaction. Answer at 4. In fact, to this date, the City has not relieved

Atlantic’s previous owner ofits obligations under a financial guarantee made to the City.

19
The City is aware that discussions took place between Heritage and Atlantic and that

nothing came of it. Complaint Ex. 10, § 4.01. More importantly, and contrary to Complainant’s

claim, the City did not “actively” or “willfully” encourage or discourage any party from

purchasing Heritage’s leasehold. Although Complainant was apparently interested in acquiring

some or all of Heritage’s assets, Heritage declined to engage with Complainant. Complaint Ex.

11 at 1. This has nothing to do with the City. Heritage is not an agent of the City; its actions and

statements are its own.25 Complainant has provided no evidence that the City is not in

compliance with its Federal obligations as a result of the 2013 Heritage-Atlantic discussions.

And private discussions between two parties that did not include the City should have no bearing

on the City’s current compliance status.

25 Complainant again refers to an alleged statement of Heritage’s general manager, Reply at 27, suggesting it is

evidence that the City conspired to have only one FBO at the Airport. As the City explained in its Answer, this

individual does not speak for the City, and the City has no knowledge ofthe alleged statement. Answer at 1 n.2. See

also Keyes v. McMinn Cnty., Tenn., FAA Docket No. 16-08-12, Final Agency Decision and Order at 13 n.12 (July

26, 2010) (“The Director will not investigate allegations based on third party conversations that amount to

hearsay . . .

20
IV. CONCLUSION

For the foregoing reasons, the City respectfully requests that the Complaint be summarily

dismissed as requested in the City’s motions or, in the alternative, that it be dismissed after full

investigation.

Respectfully submitted,

~

Pablo 0. Nüesch

Anjali G. Patel

Jessica R. Bell

Spiegel & McDiarmid LLP

1875 Eye Street, N.W.

Suite 700

Washington, DC 20006

Email: pablo.nuesch~spiege1mcd.com

Phone: 202-879-4000

Fax: 202-393-2866

Attorneys for the

City of Burlington, Vermont

January 9, 2015

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Certificate of Service

I hereby certify that I have today, the 9th day of January, 2015, caused the foregoing

Rebuttal to be served electronically, on the following:

Benjamin H. Klein

The Klein Law Firm, LLC

61 Broadway, Suite 2125

New York, NY 10006

bklein@thekleinfirm.com

Attorney for Complainant

Pablo 0. Nüesch