Author:
Lang, Catherine M., Acting Associate Administrator for Airports
Author Title:
Acting Associate Administrator for Airports
Complainant(s):
BMI Salvage Corp.|Blueside Services, Inc.
Respondent(s):
Miami-Dade County (Fla.) Aviation Department
Airport(s):
Opa-Locka Airport (OPF)
Holding:
Affirming in part and amending in part Final Decision and Order of Mar. 5, 2007. See Determination No. 170.
Abstract:
In their original complaint, Complainants, BMI Salvage Corp. and Blueside Services, Inc., alleged that Respondent, collectively the County of Miami-Dade, Florida and the Miami-Dade Aviation Department, violated Grant Assurance 22. The Director found no violation.|Complainants appealed, arguing that the Director erred by: (1) concluding that Respondent was not in violation of Grant Assurance 22 by failing to offer Complainants a lease comparable to leases offered to similarly situated tenants; and (2) making decisions about the evidence without conducting an evidentiary hearing in violation of Complainants’ due process rights guaranteed by the Fifth Amendment to the U.S. Constitution. The Associate Administrator affirmed the Director’s Determination and dismissed the Appeal. (pp. 2-3).|Complainants then petitioned the Eleventh Circuit Court of Appeals for a limited review of only the portion of the Final Decision and Order that concluded that the Respondent was not in violation of Grant Assurance 22. The Eleventh Circuit found that the record supporting the Agency’s decision was “inadequate” for the court to make a meaningful review. It remanded the decision back to the FAA to give the Respondent an opportunity to present legally and factually sufficient justifications for its failure to enter into an agreement with the Complainants to occupy or develop facilities at the Airport. (p. 1).|On remand, the Associate Administrator held that the additional evidence submitted by the parties supported its earlier finding that Respondent was not in violation of Grant Assurance 22 and that pages 13-16 of the Final Decision and Order were superseded by this Final Decision and Order. (p. 64). The Associate Administrator additionally found the following:|Jurisdiction:|On remand, an administrative agency has no power or authority to deviate from the mandate issued by a reviewing Court. (p. 20).|In a Part 16 proceeding, a party may not bring up new issues on appeal that were not alleged in the initial complaint when information on such issue was available during the initial pleading stage. (p. 54).|Aeronautical Activities:|“An aeronautical activity is defined as any activity that involves, makes possible, or is required for the operation of aircraft or that contributes to or is required for the safety of such operations. Activities within this definition, commonly conducted on airports include, but are not limited to, the following: general and corporate aviation, air taxi and charter operations, scheduled and nonscheduled air carrier operations, pilot training, aircraft rental and sightseeing, aerial photography, crop dusting, aerial advertising and surveying, aircraft sales and services, aircraft storage, sale of aviation petroleum products, repair and maintenance of aircraft, sale of aircraft parts, parachute or ultra light activities, and any other activities that, because of their direct relationship to the operation of aircraft, can appropriately be regarded as aeronautical activities. Activities such as model aircraft and model rocket operations are not aeronautical activities.” (p. 22, n.12).|FAA policy treats aircraft salvage and demolition as a purely nonaeronautical activity. There are three reasons for FAA’s adoption of this position. First, FAA’s official definition of “aeronautical activity” does not include aircraft salvage and demolition. Second, although the list of examples in FAA’s definition of aeronautical activities is not exhaustive, “it is indicative of the agency’s stated intent . . . that only activities having a ‘direct relationship to the operation of aircraft’ can appropriately be regarded as aeronautical activities.” (p. 23). The single flight operation of delivering an aircraft to be salvaged is an aeronautical activity but the “lengthy business of disassembling the aircraft after that flight is not.” (p. 23). Third, salvage and demolition is similar to aircraft manufacturing, which is also not considered an aeronautical activity. Both activities can be conducted in a nonaeronautical area of the airport or at an off-airport location and their sole link to an aeronautical activity is the arrival of the salvage aircraft (in the case of salvage and demolition) or the departure of the completed aircraft (in the case of manufacturing). (pp. 26-27).|Because aircraft salvage and demolition is a purely nonaeronautical activity, Respondent’s grant assurances would not require it to provide the Complainants with access to the Airport. (p. 27).|Grant Assurance 22:|Respondent is obligated to negotiate in good faith for available land to make the Airport available for aeronautical purposes on reasonable terms. Respondent fulfilled its obligation to the extent permitted by the terms of its existing development leases when it offered Complainants undeveloped available land at the Airport for the purpose of establishing a stand-alone FBO, including aircraft repair service, but not a full-time salvage operation. The Respondent was not obligated to provide Complainants with either a lease for Complainants’ preferred parcel of land or a development agreement that included a salvage operation. “Grant Assurance 22 . . . obligates the airport sponsor to make the airport available for public use on reasonable terms. It does not require the airport sponsor to offer certain convenience or a certain level of cost effectiveness to its tenants and airport users.” (pp. 32-33, 59).|Complainants were found not to be similarly situated to a tenant that operated a repair station at the Airport because: (1) Complainants wished to establish an FBO combined with their aircraft salvage and demolition component, and the other tenant was neither a full-service FBO nor an aircraft salvage operator; (2) Complainants only had a land lease, whereas the other tenant had a building lease; (3) Complainants neither had nor required an enclosed building facility, but the other tenant required an enclosed building facility for its active business; and (4) unlike the other tenant, Complainants were neither evicted from an unsafe building nor were they subject to relocation requirements. Because Complainants were not similarly situated to the other tenant, the Respondent did not violate Grant Assurance 22 when it did not provide Complainants with a lease comparable to the lease offered to the other tenant. (pp. 40-41).|Complainants were also found not to be similarly situated to an FBO tenant when: (1) Complainants wanted to offer more services than the FBO tenant; (2) Complainants wanted a longer lease term than the five-year term agreed upon by the Respondent and the FBO tenant; and (3) the level of investment required by the Complainants was significantly larger than for the FBO tenant and was based on the Complainants’ desire to expand their salvage component and add new FBO services. (p. 49).|It is reasonable for Respondent to request or require proof of financial capability from a prospective tenant wishing to enter into a development lease. Although “tenancy is a valid point [for the Respondent] to consider, rent history alone is not sufficient—nor even reasonable—proof regarding financial capability to complete a development project possibly reaching up to $11 million.” (p. 52).|In determining whether entities are similarly situated, the FAA may distinguish between new and established business in order to consider if “established businesses have an existing clientele and measurable income that the Respondent can use to assess whether [that business] is able to commit the appropriate financial resources for the . . . expansion[] of its leaseholds.” (p. 61).
Index Terms:
Aeronautical activity|Economic Nondiscrimination (Grant Assurance 22)|Jurisdiction|Jurisdiction - Part 16|New evidence on appeal|Similarly situated|Through-the-fence