Lexis Cite:
2007 FAA LEXIS 272
Westlaw Cite:
2007 WL 2405821
Author:
Bennett, David L., Director
Complainant(s):
Jimsair Aviation Services, Inc.
Respondent(s):
San Diego County (Cal.) Regional Airport Authority
Airport(s):
San Diego International Airport (SAN)
History:
Affirmed by Final Agency Decision and Order of Aug. 9, 2007. See Determination No. 182.
Holding:
Finding violation in part.
Abstract:
Complainant, Jimsair Aviation Services, Inc., filed a complaint against Respondent, the San Diego County Regional Airport Authority, sponsor and operator of San Diego International Airport, alleging that Respondent caused Complainant's lease to terminate without an opportunity for renewal thereby restricting the Airport to a single FBO in violation of Grant Assurance 23 and favoring scheduled air carriers over general aviation users in violation of Grant Assurance 22. In addition, Complainant alleged that Respondent violated Grant Assurances 5, 8, 16, 18, 24, and 29. The Director found Respondent to be partly in violation.|Economic Nondiscrimination (Grant Assurance 22):|Respondent was not in violation of grant assurances for failing to renew Complainant's lease where the lease was not set to expire until April 30, 2012. "The grant assurances do not obligate the sponsor to renegotiate lease terms early to suit the Complainant." (p. 17).|Respondent was not in violation of grant assurances for failing to renew Complainant's fuel permit where even without a valid permit Respondent was permitting Complainant to continue its fuel storage operation and Complainant presented no evidence to show that Respondent's reluctance to renew the permit had negatively impacted Complainant's aeronautical operation. (p. 17).|Respondent did not impose unreasonable requirements on Complainant in violation of Grant Assurance 22 regarding concession and fueling fees, and price controls, where Complainant did not pay concession fees or fueling fees in excess of what other tenants paid, and price controls were never made part of Complainant’s lease. (p. 39).|Respondent did not unreasonably change requirements by informing Complainant that it would have to store its fuel at a centralized fuel storage facility three months after Complainant completed construction on its own fuel storage facility where Complainant ultimately prevailed in retaining its own fuel operations. (p. 39).|Respondent did not unreasonably change construction requirements by informing Complainant that it would not receive the lease extension for Complainant’s upgrade construction where Complainant demolished its terminal and restaurant building before finalizing negotiations on the lease adjustments it needed to proceed with the upgrade proposal and expansion project. (p. 39).|Respondent did not unjustly discriminate against Complainant by requiring it, and no other tenants, to provide an economic benefits analysis where no other tenant had proposed a comparable lease extension and therefore no other tenant was similarly situated to Complainant. (p. 39).|Whether or not to require an economic benefits analysis is an airport business decision. FAA does not normally intervene in the business decisions of the airport sponsors where grant assurances violations are not at issue. (p. 37).|Respondent was in violation of Grant Assurance 22 for allowing non-tenant aeronautical service providers to engage in ground handling and related aeronautical services in direct competition with Complainant without requiring them to meet the same Minimum Standards and rules and regulations as the Complainant, thereby putting Complainant at a competitive disadvantage. (p. 41).|Exclusive Rights (Grant Assurance 23):|Complainant's failure to obtain additional acreage or to secure its desired lease extension through negotiation with Respondent was not sufficient to show that Respondent was in violation of grant assurances where (1) Complainant was not precluded from conducting any specific aeronautical activity, nor was it precluded from engaging in an activity that other similarly situated tenants enjoyed; and (2) the record showed that Respondent ceased negotiations with Complainant for cause when it was discovered, through an audit, that Complainant had a financial deficiency. (pp. 19-20).|Respondent did not grant an exclusive right to a single FBO where (1) there was no evidence that Respondent had committed to the number of FBOs it would have in the future; (2) Complainant was the only FBO at the Airport as a result of market forces rather than design or actions of Respondent; and (3) there was no evidence that a prospective FBO had requested access to the Airport and been denied. (pp. 22-25).|Airport Layout Plan (Grant Assurance 29):|Respondent was not in violation of Grant Assurance 29 where Complainant could not support its allegation that Respondent had inappropriately converted space designated as aeronautical to nonaeronautical purposes or permitted changes that would adversely affect the safety, utility, or efficiency of the Airport. (p. 26).|Conformity to Plans and Specifications (Grant Assurance 16):|Respondent did not violate its grant assurances by failing to consult with Complainant on the content of an Airport Layout Plan draft in advance of the rest of the public. (p. 27).|“The Authority’s federal obligations do not confer onto the Complainant the guaranteed right or privilege to secure a future fixed-based operator site without participating in a bidding process if, indeed, that is the method the Authority chooses to use.” (p. 28).|Grant Assurance 16 does not apply to airport planning projects undertaken by a sponsor. (p. 28).|Planning Projects (Grant Assurance 18):|Respondent did not violate Grant Assurance 18 by proposing changes to the allocation of fixed-base operator space where these changes were presented in draft form and made available for public comment. (p. 29).|Consultation with Users (Grant Assurance 8):|Respondent did not violate Grant Assurance 8 by not consulting with users in the development of its Airport Master Plan where (1) the Manager of Airport Planning indicated the intention to involve various affected parties in the planning process; (2) the public attended meetings and had access to documents through the Airport’s website prior to meetings; (3) there was media coverage of the airport planning process and issues impacting the Airport Master Plan were voted on in a public election; and (4) Complainant had been active in voicing its opinion regarding proposed changes affecting the FBO site both directly and through consultants and other representatives. (pp. 30-31).|Fee and Rental Structure (Grant Assurance 24):|Respondent was not in violation of Grant Assurance 24 by not receiving revenue from certain aeronautical service providers conducting business on the Airport where those entities were not leasing Airport property. “Establishing the appropriate fee schedule for this aeronautical activity is an Airport business decision.” (p. 43).
Index Terms:
Unjust economic discrimination|Economic Nondiscrimination (Grant Assurance 22)|Exclusive Rights (Grant Assurance 23)|Preserving Rights and Powers (Grant Assurance 5)|Consultation with Users (Grant Assurance 8)|Conformity to Plans and Specifications (Grant Assurance 16)|Planning Projects (Grant Assurance 18)|Fee and Rental Structure (Grant Assurance 24)|Self-sustainability|Airport Layout Plan (Grant Assurance 29)|Similarly situated|Airport Master Plan|Fixed-base operator (FBO) agreement|Land lease|Proprietary right