Southern California Pilots Association v. County of Orange – No. 16-23-17
FAA Docket No:
16-23-17
Author:
Michael W. Helvey, Director, Office of Airport Compliance and Management Analysis
Complainant(s):
Southern California Pilots AssociationRespondent(s):
County of OrangeAirport(s):
John Wayne Airport (SNA)
Holding:
No ViolationAbstract:
Complainant, Southern California Pilots Association, claimed that the County violated Grant Assurance 22, Economic Nondiscrimination, and Grant Assurance 24, Fee and Rental Structure, by discriminating against owners of small general aviation aircraft through its General Aviation Improvement Program (GAIP). (Director’s Determination, p. 1.)
Complainant specifically alleged that the GAIP called for the displacement of at least 242 small single-engine aircraft by removing hangar and parking spaces traditionally used by these aircraft to make way for larger jet and turboprop aircraft that the County sought to attract. (Director’s Determination, p. 1.) It further argued that the County violated law by imposing “exorbitant rent increases” on small general aviation parking spaces that, in its view, were inconsistent with federal requirements. (Director’s Determination, p. 1.) Complainant claimed the County, “through definition, design, and price,” was systematically discriminating against small general aviation aircraft in favor of larger jet aircraft. (Director’s Determination, p. 1.)
The County denied these allegations, maintaining that the GAIP did not discriminate against any single aeronautical user or group but instead protected the overall presence of general aviation at the Airport while making necessary adjustments to infrastructure to accommodate future users. (Director’s Determination, p. 1.)
The County acknowledged that a reduction in space for single-engine aircraft could result from market conditions, taxiway reconfiguration, and GAIP implementation, but it emphasized that these changes responded to broader market trends showing a decline in single- and multi-engine aircraft activity and growth in jet and helicopter operations. (Director’s Determination, p. 1.) The County also rejected claims that rental rate increases targeted single-engine aircraft owners, asserting that prior rates were far below market value. It noted that any rate increases imposed by fixed-base operators (FBOs) did not directly affect the Airport’s revenue or operating costs. (Director’s Determination, p. 1.)
Grant Assurance 22, Economic Nondiscrimination—GAIP, Reduction in Parking Positions for Single-Engine Aircraft
The Director agreed with the County, reaffirming that airport sponsors have proprietary rights to plan and develop their airports and may use market influences to guide land use decisions. (Director’s Determination, p. 7.) Citing precedent in Wilson Air Center v. Memphis and Shelby County Airport Authority and Signature Flight Support Corp. v. County of Orange, the Director emphasized that grant assurance does not guarantee—or require—that all aeronautical facilities be available to accommodate all potential demand, nor does it guarantee that a specific type, kind, or class of aeronautical activity will not be inconvenienced in some way. (Director’s Determination, p. 7.) “Airport user access does not give users carte blanche or veto power over an airport sponsor’s appropriate exercise of its proprietary powers. In fact, under Grant Assurance 5, Preserving Rights and Powers, a sponsor cannot take any action that may deprive it of its rights and powers to direct and control development and to comply with the grant assurances.” (Director’s Determination, pp. 7–8.)
The GAIP’s objectives focused on safety, efficiency, flexibility, and maximizing aeronautical use while dedicating substantial acreage to small general aviation aircraft. (Director’s Determination, p. 8.) Historical data showed a decline in single-engine piston aircraft and growth in jet activity over time, supporting the County’s decisions. (Director’s Determination, p. 8.) Although Complainant cited waitlists for parking as evidence of demand, it did not demonstrate that pilots on those lists were ready and able to lease space, had been denied access, or owned single-engine aircraft. (Director’s Determination, p. 8.) The County also presented alternatives in its environmental review, showing that maximizing single-engine parking would come at the cost of other needed facilities. (Director’s Determination, p. 8.)
The Director rejected claims that the County’s definition of “small aircraft,” based on wingspan and weight rather than the regulatory definition in 49 C.F.R. § 1.1, was deceptive, noting that the FAA itself uses multiple definitions depending on context and that planning based on design group and wingspan was logical and consistent with FAA design standards. (Director’s Determination, p. 10.) Allegations that the County was circumventing a local settlement agreement were also dismissed as outside the scope of FAA’s jurisdiction under Part 16. (Director’s Determination, p. 10.)
However, the Director raised two significant concerns. (Director’s Determination, p. 11.) First, the GAIP proposed a substantial increase in surface vehicle parking, from 484 to 795 spaces, potentially at the expense of aircraft parking. (Director’s Determination, p. 11.) This could be construed as prioritizing nonaeronautical use over aeronautical use, which would violate Grant Assurance 22 if substantiated. (Director’s Determination, p. 11.) Second, while the County indicated it would allow leases to expire naturally as development progressed, it had not detailed how it would manage displacement of based aircraft, particularly in a constrained airport environment. (Director’s Determination, p. 11.) Citing Pacific Coast Flyers v. County of San Diego, the Director noted that reasonable efforts to accommodate displaced tenants, even at nearby airports, would demonstrate compliance. (Director’s Determination, p. 11.)
Ultimately, the Director found that the County was not currently in violation of Grant Assurance 22 because the GAIP remained merely a plan to redevelop airport property rather than an implemented action and reflected legitimate proprietary planning authority. (Director’s Determination, p. 12.) However, the Director cautioned the County to take steps to ensure ongoing compliance, including reaffirming the plan during phased construction, incorporating design flexibility to serve changing user needs, prioritizing aeronautical uses over nonaeronautical uses, and creating contingency plans to accommodate displaced aircraft. (Director’s Determination, p. 12.) The County was encouraged to work collaboratively with all airport users—not just single-engine aircraft owners—to maintain equitable access as the GAIP was implemented. (Director’s Determination, p. 12.)
Increase in Rental Rates for Small Aircraft in Excess of Operating Cost Increases
Complainant argued that rental increases at the airport constituted intentional discrimination aimed at driving small single-engine aircraft from the airport to facilitate GAIP’s implementation. (Director’s Determination, p. 12.) It specifically claimed that between 2017 and 2023, hangar rents for small general aviation aircraft rose by more than 248%, while airport expenses increased only 11.9%, creating what they characterized as a “significant surplus” at the expense of a viable aeronautical activity. (Director’s Determination, p. 12.) It further alleged that rents for larger jet aircraft had not increased, evidencing disparate treatment, and accused the County of deliberately targeting small aircraft owners through excessive pricing. (Director’s Determination, p. 12.)
Complainant rejected the County’s position that rental rates were the responsibility of the FBOs, citing FAA Order 5190.6B, Airport Compliance Manual, which holds airport sponsors accountable for ensuring that rates and terms offered by FBOs are fair, reasonable, and nondiscriminatory. (Director’s Determination, p. 13.) It argued that property tax increases on FBO leaseholds, which raised operating costs passed on to tenants, further compounded the issue, with rates “far exceed[ing] the amount of money required for the County to maintain economic viability of the airport.” (Director’s Determination, p. 13.)
The County denied these claims, stating that hangar and tiedown rental rates had remained unchanged since 2002 and had been “suppressed” for over a decade, necessitating reevaluation. (Director’s Determination, p. 13.) The County argued there was no regulatory requirement for rental increases to track operating costs proportionally and that Complainant had failed to provide evidence of preferential treatment for any other user or category of user. The County maintained that all general aviation users experienced rental increases after 2016, not just small aircraft owners. (Director’s Determination, p. 13.)
Furthermore, the County emphasized that it no longer rented tiedowns directly; rather, the FBOs leased tiedowns and set rates independently. (Director’s Determination, p. 13.) It asserted that revenue from tiedowns, sunshades, and T-hangars was not tied to the County’s gross receipts and that FBOs, not the County, were responsible for maintaining their leaseholds. (Director’s Determination, p. 13.) The County also argued that property tax rates were unrelated to its federal obligations, dismissing this element of the complaint as irrelevant to grant assurance compliance. (Director’s Determination, p. 13.)
The Director agreed with Complainant that the County was ultimately responsible for ensuring FBO rates complied with federal obligations, regardless of FBO autonomy. (Director’s Determination, p. 14.) For example, the Director found that ACI Jet, one of the full-service FBOs, calculated its rates based on County-imposed lease rates, property taxes, and a 19%–25% markup for operations and maintenance. (Director’s Determination, p. 14.) The Director examined the County’s methodology for setting these lease rates, which was based on a 2018 study assessing land value and cost recovery for FBO operations. (Director’s Determination, p. 14.) The County provided documentation, including leases, tax assessments, and details of the general aviation cost center, showing that both major FBOs—ACI Jet and Clay Lacy—were charged identical ground lease rates and similar building lease rates, demonstrating consistency among similarly situated operators. (Director’s Determination, p. 14.) A smaller, limited-service FBO, Jay’s Aircraft Maintenance, paid lower rates, which the Director deemed reasonable because it was not situated similarly to the full-service FBOs. (Director’s Determination, p. 14.)
The Director found the County’s methodology to be reasonable, industry-standard, and equitably applied. (Director’s Determination, p. 15.) Complainant presented no evidence that larger aircraft had avoided similar rate increases or that the County was using FBO lease rates to create an unjust surplus. (Director’s Determination, p. 15.) The County showed that any residual revenue, approximately $1.7 million in FY2022–23, was reinvested into airfield-related projects, reflecting that general aviation operations accounted for about 60% of total airport activity. (Director’s Determination, p. 15.)
The Director also rejected Complainant’s property tax claims, concluding that these taxes were levied independently of airport revenue and were allowable under federal law (49 U.S.C. § 40116(e)). (Director’s Determination, p. 15.)
Although the record confirmed rental increases, the Director determined that they were supported by a transparent, cost recovery–based methodology; consistent among similarly situated users; and not evidence of unjust discrimination. There was also no proof that the County had intentionally favored larger aircraft over smaller ones. (Director’s Determination, p. 15.)