Anoka Air Charter, Inc. and Crossroads Aviation, LLC v. Metropolitan Airports Comm’n – No. 16-11-12

Author:

Kevin C. Willis, Director

Author Title:

Director

Complainant(s):

Respondent(s):

Airport(s):

Anoka County-Blaine Airport (ANE)

History:

Complaint dismissed by Director's Determination dated 4/25/17

Holding:

Abstract:

The Metropolitan Airports Commission ("MAC") owned and operated the Anoka County-Blaine Airport (“ANE”) in Blaine, Minnesota, a reliever airport in the Minneapolis - St. Paul metropolitan area. The Complainant—a Part 135 air charter business that operated at ANE since 1991—alleged that it was “forced to sell its aircraft and close its doors [in 2011] … as a result of” MAC’s failure to inform it of its right to self-fuel its aircraft and violation of several federal grant assurances required by 49 U.S.C. § 41707, specifically Grant Assurance 5 (Preserving Rights and Powers), Grant Assurance 20(f) (Economic Nondiscrimination), and Grant Assurance 23 (Exclusive Rights).

The Respondent asserted that despite disagreements, the evidence showed that MAC had treated the Complainant fairly and supported its operations (p. 6.) The Respondent also asserted that the Complainant, not MAC, was responsible for its failed business and that any differences among the agreements of tenants and subtenants in the relevant NW Building were justified. (p. 6-7.)

With respect to Grant Assurance 5, Preserving Rights and Powers, the Complainant alleged that MAC failed to require all the terms, conditions, and assurances contained in the airport grant agreements to be included in a commercial ground lease, i.e., MAC “has allowed leases, including Commercial Full Service FBO leases, at ANE that do not make the grant assurances binding upon the lessees and sublessees. This has put all of the other tenants in a less favorable position.” (p. 17.) The complainant further alleged that MAC allowed land designated for aviation use to be leased for purposes contrary to the grant assurance: “It has also placed the remaining undeveloped land that had been designated for commercial aviation purposes at ANE under the control of Key Air, LLC, for its benefits and not the benefit of MAC or the public.” (p. 17.)

The Director recounted that “clauses in airport agreements that subordinate the terms of the agreement to the applicable federal obligations can help to preserve the airport sponsor’s rights and powers [under Grant Assurance 5] and that “[a] subordination clause enables the airport sponsor to amend terms of an agreement that are inconsistent with the sponsor’s federal obligations to conform with the applicable federal obligations.” MAC had submitted copies of its leases to support its contention that subordination clauses were included in obligating documents with Anoka County for the development and lease of the NW Building Area. Thus, the Director found that, “[i]t is clear from the Joint Powers Agreement between MAC and Anoka County, the Lease between MAC and Anoka County, and the Sublease between Anoka County and the Developer that MAC took appropriate steps to preserve sufficient rights and powers under the leases in accordance with Grant Assurance 5.” As such, the Complainant had come forward with only naked allegations of grant assurance violations and “no evidence that this has occurred.” (p.19.)

Next, with respect to Grant Assurance 22(f), Economic Nondiscrimination, the Complainant alleged that MAC adopted a policy that prohibited virtually all self-fueling and denied the Complainant the right to self-fuel its own aircraft. Relying on MAC’s Ordinance No. 118 (“Reliever Airports Minimum Standards for General Aviation Commercial Aeronautical Operations”), however, the Director found that “self-serving activities, including self-fueling are allowable.” (p.22.) “Given these excerpts from Ordinance No. 118,” the Director noted, “it is unclear … why the Complainant construes that MAC failed to provide guidance and direction regarding whether self-fueling activities are allowed.” Moreover, “[t]here [was] no evidence provided that the Complainant sought clarification or additional information over and above what MAC has provided publicly on how to conduct self-fueling activities if the guidance was unclear [and] [t]he record does not contain evidence of efforts by the Complainant to clarify any alleged ambiguities.” (p. 23.) As such, “[w]ithout more persuasive evidence that a bonafide attempt was made to negotiate the terms and conditions … to self-fuel, the Director cannot reasonably find that MAC denied … the right to self-fuel.” (p. 24.)

Finally, with respect to Grant Assurance 23, Exclusive Rights, the Complainant alleged that MAC gave preferential lease terms to other commercial tenants. The Director found that the Complainants “failed to identity how the differences in lease terms or ground rent constitute an unjust economic discrimination and a prohibited exclusive right. The differences can be reasonably explained and justified, however, by the differing leasing circumstances, financing terms, payment schedule, and dates the leases were negotiated.” (p. 26.) Moreover, the Director did not find that “MAC has unjustly discriminated against the Complainant nor did its actions constitute the constructive granting of an exclusive right. Furthermore, the Complainant has failed to show how it had been excluded by the MAC from offering general aviation FBO services.” (p. 26.)

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