Horry County, South Carolina v. City of Myrtle Beach, South Carolina - No. 16-21-07

FAA Docket No:

16-21-07

Author:

Kevin C. Willis, Director of Airport Compliance

Complainant(s):

Respondent(s):

Airport(s):

Myrtle Beach International Airport (KMYR)

Holding:

Abstract:

Complainant, Horry County, South Carolina, filed a complaint under 14 C.F.R. Part 16 against Respondent, the City of Myrtle Beach, South Carolina, which is the sponsor of the Myrtle Beach International Airport and three other airports serving the Myrtle Beach area. (Director’s Determination, p. 1.) Neither Complainant nor Respondent was an airport operator or aeronautical user. The City is the owner of the federally conveyed Seascape Properties. (Director’s Determination, p. 1.)

Complainant-County alleged the Respondent-City was obligated to provide the proceeds from the proposed sale of the Seascape Properties to the County to be used for airport purposes, averring that, “[t]he County brings this Complaint because the City refuses to abide by its obligations under the Surplus Property Act of 1944, as amended, 49 U.S.C. §§ 47151-47153 (the Surplus Property Act [or SPA]) to transfer the proceeds from the sale of certain property known as the Seascape Properties to the County for airport purposes.” (Director’s Determination, p. 1.) Further, the Complainant-County claimed that the proposed purchase price was not fair market value (FMV), and the City was obligated to sell the property for FMV in accordance with the SPA and FAA guidance. (Director’s Determination, p. 1.)

In response, the Respondent-City claimed that it was not obligated to provide the proceeds from the sale of the property to Horry County and the proceeds generated from the Seascape Properties did not need to be used for airport purposes. (Director’s Determination, p. 1.) Specifically, the City argued that “the restrictions arising under a deed and agreements between the United States of America and the City were long ago satisfied or released and, in any event, conferred no right, title, interest, or benefit upon the County with respect to the Seascape Properties.” (Director’s Determination, p. 1.) In addition, the Respondent-City claimed that it was not required to receive FMV for the property. (Director’s Determination, p. 1.)

The Director found that the City was obligated to ensure the proceeds of the sale of the Seascape Properties were used for the benefit of civil aviation in accordance with the SPA. (Director’s Determination, p. 2.) Further, the Director found that although Horry County was the logical recipient of the funds as the sponsor of the four public use airports serving the Myrtle Beach area and the past beneficiary of a portion of lease proceeds, the FAA would consider and evaluate the merits of an alternative proposal offered by the City if a significant benefit to civil aviation could be demonstrated. (Director’s Determination, p. 2.) Finally, the Director ruled that the City must follow the FAA process for determining FMV for the sale price in accordance with FAA guidance. (Director’s Determination, p. 2.)

To reach these conclusions, the Director engaged in a detailed review of the term’s deeds and agreements between the City and the County, including a 1948 deed that conveyed the Seascape Properties to the Town of Myrtle Beach, and a 1953 Release that documented the obligation to use property revenues for public airport purposes. (Director’s Determination, p. 18.) In determining that the City was obligated to use the proceeds from the sale of the property for airport purposes under the SPA and the 1953 Release instrument, the Director further noted that the FAA is the agency authorized to ensure compliance with the SPA, and FAA’s policy on disposal of surplus property is described in its guidance, which prescribes procedures for ensuring the property is sold for FMV. (Director’s Determination, p. 26.) In this regard, the Director found that the City must follow FAA procedures for determining FMV and must sell the property in accordance with these procedures. (Director’s Determination, p. 26.)

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