U S DOT FAA - Director's Determination (Sent)

US.
Department
of Transportation
Office of Airport Safety and

Standards
800 Independence Ave.. S.W.

Washington, D.C. 20591
Federal Aviation
Administration
July 25,2005
Ronald J. Cozad
Magellan Aviation Building
McClellan-Palomar Airport
2006 Palomar Airport Road, Suite 214
Carlsbad, CA 92008
John J. Sansone, County Counsel
County of San Diego
Office of County Counsel
1600 Pacific Hwy #335
San Diego, CA 92 101
Thomas R. Devine
Palmer & Dodge LLP
1776 I Street, N.W.
Washington, DC 20006
Scott P. Lewis
William L. Lahey
Palmer & Dodge LLP
1 1 1 Huntington Avenue
Boston, MA 02199
Dear Messieurs Cozad, Sansone, Devine and Lewis:
FAA Docket No. 16-04-08
Enclosed is a copy of the Directors Determination in the above-captioned formal complaint
under 14 CFR Part 16. Upon consideration of the evidence and argument presented by the
parties, applicable law and policy and for the reasons stated above, the Director finds that based
on a preponderance of reliable, probative and substantial evidence, and under the particular
circumstances existing at the airport:
0
The County, by granting leases to PACA3urrows resulting from a right of first refusal, has
not granted an exclusive right in violation of Grant Assurance 23, Exclusive Rights,
49 USC 40103(e) and 49 U.S.C. 9 47107(a)(4),
The County, by its actions in accommodating as many aircraft as possible that were
displaced as a result of the PAC/Burrows development at CRQ, has not violated Grant
Assurance 22, Economic Nondiscrimination, implementing the provisions of
49 USC 47107(a),
The County by granting PAC/Burrows a right of first refusal is not in violation of Grant
Assurance 5 Preserving Rights and Powers, 49 USC Section 47107(a) because of the right
of first refusal was used at the outset of the lease term as a way to ensure the redevelopment
of one property on the airport, and the County specifically preserved its rights and powers
in its contract with PAC/Burrows.
The County has not violated Grant Assurance 35, Relocation and Real Property
Acquisition, 42 USC 3 4601 et seq, since said grant assurance and statutory requirement do
not apply to the PAC/Burrows private development at CRQ.
Accordingly, the above-referencedmatter is dismissed, all motions and requests not expressly
granted are denied, and the docket is closed.
Sincerely,
David L. Bennett
Director, Office of Airport Safety
and Standards
UNITED STATFS DEPARTMENT OF TRANSPORTATION

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FEDERAL AVIATION ADMINISTRATION

WASHINGTON, DC
Pacific Coast Flyers, Inc., Donnya Daubney d/b/a Carlsbad

Aircraft Pilot Supply and Roger Baker,
Complainants,
V.
County of San Diego, California,
Respondents.
July 25,2009
DIRECTOR'S DETERMINATION
I.
INTRODUCTION
This matter before the Federal Aviation Administration (FAA) is based on the Complaint filed under FR4 Rules
ofpracticefor Federally Assisted Airport Proceedings, 14 Code of Federal Regulations (CFR) Part 16, by
Pacific Coast Flyers, Inc., Donnya Daubney d/b/a Carlsbad Aircraft Pilot Supply, and Roger Baker
(Complainants).
The Complaint was filed against the County of San Diego (CountyRespondentISponsor), which owns and
operates the McClellan-Palomar Airport (CRQ) in San Diego County, California. In this Part 16, the
Complainants argue that by granting 30-year leases to Palomar Airport Center (PAC), a master leaseholder' at
CRQ, the County has violated Grant Assurance 23, Exclusive Rights, which prohibits the granting of exclusive
rights at federally obligated airports.*
The Complainants also maintain that the displacement of light general aviation (GA) aircraft and related
businesses, as a result of the County granting the aforementioned leases, constitutes a violation of Grant
Assurance 22, Economic Nondi~crimination.~
The Complainants also argue that by not making available
reasonable alternatives accommodations and providing relocation expenses, the County has violated Grant
Assurance 35, Relocation and Real Property Acquisition4 and by abdicating its obligation to enforce Federal
grant assurances against PAC/Burrows, the County has violated Grant Assurance 5, Preserving Rights and
Powers.'
'
A master leaseholder is an entity that has a lease with the airport sponsor but then subleases parts of its leasehold to other entities. Those
entities are commonly referred to as subtenants.
* FAA Exhibit I, Item 1, p. 1.
FAA Exhibit 1, Item 1, p. 1.
FAA Exhibit 1, Item 1, p. I .
The Complainants summarize the Complaint by stating that in light of the anti-competitive nature of the initial
award of the master leases by the County to P A C B u r r ~ w sPAC/Burrows
,~
unwillingness to reasonably
accommodate the light general aviation users, and in light of the County Supervisors apparent abdication of
oversight responsibilities, the County has committed and allowed violations of Grant Assurances 5 (failure to
enforce assurances), 22 (economic nondiscrimination), 23 (exclusive rights) and 35 (failure to provide fair and
reasonable relocation expense reimbursement and assistance program). The County denies all of these
allegations by the Complainants. Under the particular circumstances existing at the Airport and the evidence of
record, as discussed below, the FAA has determined that:
0
The County, by granting leases to PACBurrows resulting Erom a right of first refusal as part of the 1993
Settlement Agreement, has not granted an exclusive right in violation of Grant Assurance 23, Exclusive Rights,
49 USC 9 40103(e) and 49 U.S.C. 9 47107(a)(4),
The County, by its actions in accommodating as many aircraft as possible that were displaced as a result of
the PAC/Burrows development at CRQ, has not violated Grant Assurance 22, Economic Nondiscrimination, 49
USC 47107(a),
0
0
The County, by granting PACBurrows a right of first refusal as part of the 1993 Settlement Agreement, has
not violated Grant Assurance 5, Preserving Rights and Powers,
The County has not violated Grant Assurance 35, Relocation and Real Property Acquisition, 42 USC 3 4601
et seq, since said grant assurance and statutory requirement do not apply to the PACBurrows private
development at CRQ.
0
The FAAs decision in this matter is based on the applicable Federal law and FAA policy, and review of the
pleadings and supporting documentation submitted by all the parties, which comprise the administrative record
reflected in the attached FAA Exhibit 1.
11.
THE COMPLAINANTS
The three (3) Complainants in this proceeding are Pacific Coast Flyers, Inc., Donny Daubney d/b/a Carlsbad
Aircraft Pilot Supply, and Mr. Roger Baker. Pacific Coast Flyers, Inc. (PCF) is a California Non-Profit Mutual
Benefit Corporation, organized under Cal. Corp. Code 71 10-8910 and operates as a flying club at CRQ. PCFs
membership consists of owners of 14 club aircraft and, as of July 31,2004,301 instructors and persons who rent
the aircraft for business, personal, and instructional purposes. Almost all of PCFs aircraft are tied down on the
Burrows Leasehold and are maintained by Carlsbad Air S e r ~ i c e . ~
Donnya Daubney is the proprietor of Carlsbad Aircraft Pilot Supply situated at CRQ in space subject to a notice
to vacate by October 1,2004. Roger Baker is an aircraft owner and has kept his airplane in a hangar within the
leasehold subject to the notice to vacate.
Mr. Baker, as an individual, co-operates the Yak Flying Club, a group of pilots that make these Soviet and
Chinese aircraft types available to its members.
For the purposes of this Complaint, PAC and PAC /Burrows are the same entity although both are extensively used by all parties in this
Complaint. The name varies in part because the interests holding the company changed over time and the leasehold used to be known as
Burrows, but today is know as PAC.
* FAA Exhibit 1, Item 5, p. 2.
FAA Exhibit 1, Item 1, p.2, FAA Exhibit 1, Item 5, p. 3.
l o FAA Exhibit 1, Item 1, p.2, FAA Exhibit 1, Item 5, p. 3.
l 1 FAA Exhibit 1, p. 2-3, FAA Exhibit 1, Item 5 , p. 4.
111.
THE AIRPORT AND ITS OBLIGATIONS
The McClelland-Palomar Airport (CRQ) is one of the 383 primary airports in the United States. l 2 It is located
three miles southeast of Carlsbad at Palomar Airport Road and El Camino Real, 30 miles north of downtown
San Diego, in Southem Ca1if0rnia.l~CRQ, situated on 486 acres, is a public-use airport owned and operated by
the County of San Diego, Calif~rnia.'~
San Diego County operates an eight-airport system consisting of the
following airports: Agua Caliente Airstrip, Borrego Valley Airport, Fallbrook Community Airpark, Gillespie
Field, Jacumba Airport, Ocotillo Airport, Ramona Airport, and McClelland-PalomarAirport." CRQ is the only
airport in the County system with a precision approach system (an instrument landing system or ILS), which
serves the Airport's sole runway.16Figure 1 below provides an aerial view of the airport and its one-runway
layout, as well as general layout and developed areas.
In 1957, the County of San Diego selected the Carlsbad site to replace another airport called Del Mar Airport
with the airport opening to the public in 1958. In 1961, the runway was extended to 4,700 feet while an FAA air
traffic control tower (ATCT) was placed into operation in 1973. In 1978, the airport was annexed into the City
of Carlsbad. In 1991, American Eagle Airlines began scheduled service from Carlsbad to Los Angeles, while
United Express Airlines began its passenger service to and from Los Angeles in 1994. In 1996, the FAA issued
a certification and permit to operate aircraft that carry in excess of 30 passengers. By 1999, America West
Express had also begun commercial service to and from CRQ." Today, United Express and America West
Express have scheduled airline operations at CRQ."
The airport serves the spectrum of aviation since it accommodatesairline operations, military activity, general
aviation, executive aircraft operation and services, and generally provides access to San Diego and other
surrounding communities in the Southern California area. The airport, as a commercial service airport, holds a
Class I classification under 14 CFR Part 139.19 CRQ is the base for more than 382 aircraft, ranging from singleengine aircraft to corporate jets.20Although the number of annual operations reported by FAA data exceeds
130,000,21May 2004 data provided by the County, indicates a level of operations approaching in excess of
200,000 operations annually in 2003.22
The National Plan of Integrated Airport Systems (NPVLS)~~
indicates that at CRQ, air carrier enplanements have
recently exceeded 83,000.24There are currently six ( 6 ) master leaseholders at CRQ, including Palomar Airport
Center (PAC/Burrows), and the County has awarded 30-year leases to tenants who develop various aeronautical
facilities at the airp01-t.~~
l 2 Primary Airports are defined as those having more than 10,000 annual enplanements (boardings). See The National Plan of Integrated
Airport Systems (NPIAS), http://www.faa.~ov/a~/~lanning/npias/npias2005MPIASO~A~~A~
1.pdf, p. 5.
l3 http://w.
co.san-diego.ca.us/dpw/airports/mcpa1.html#Location
l4 FAA Exhibit 1, Item 1, p. 3; FAA Exhibit 1, Item 5, p. 4; and FAA Exhibit 1, Item 14, Airport Master Record for CRQ.
FAA Exhibit 1, Item 5, Attachment 15.
l6 FAA Exhibit 1, Item 7, p. 3.
17 http://www.co.san-diego.ca.us/dpw/airports/mcpal.h~#Location
http://www.co.san-diego.ca.us/dpw/airports/airskeds.htm
l 9 14 CFR Part 139 requires the FAA to issue airport operating certificates to airports that (1) Serve scheduled and unscheduled air carrier
aircraft with more than 30 seats; ( 2 ) Serve scheduled air carrier operations in aircraft with more than 9 seats but less than 31 seats; and (3)
The FAA Administrator requires to have a certificate. This Part does not apply to airports at which air carrier passenger operations are
conducted only by reason of the airport being designated as an alternate airport. See
http://www.faa.gov/am/certification/part139/certstat.xls
for additional information.
2o Additional FAA data indicates that the number of based aircraft may increase to 41 9 by 201 0. See
1.pdf
http://www.faa.gov/~/planning/npias/npias2005~IASO5AppAfn
FAA Exhibit 1, Item 14, Airport Master Record for CRQ.
22 http://www.co.san-diego.ca.us/dpw/airports/powerpoints/performance.ppt.
23 The National Plan of Integrated Airport Systems (NPIAS) is submitted to Congress in accordance with Section 471 03 of Title 49 of the
United States Code. The plan identifies the 3,344 existing airports (2005) that are significant to national air transportation and, therefore,
eligible to receive grants under the Federal Aviation Administration (FAA) Airport Improvement Program (AIP).
24 h~://www.faa.gov/arp/p~anning/npias/npias2005MPIAS05AppAfn
1 .pdf, FAA Exhibit 1, Item 1, Attachment 16.
25 FAA Exhibit 1, Item 5, p. 4.
*'
03w
AIRPORT DIAGRAM
cARLsBAD/MC CLEW-PALOMAR (CRQ)

CARLSBAD, CAUFORNIA
AL-5310{FAA)
AIRPORT DIAGRAM
03247
Figure 1 - Airport diagram and aerial photo of the McClelland-Palomar Airport. Sources: Diagram: FAA; Photo:
http://www.terraserver-usa.com
FAA records indicate that the planning and development of the airport has been financed, in part, with funds
provided by the FAA under the Airport Improvement Program (AIP), authorized by the Airport and Airway
Improvement Act of 1982, as amended, 49 USC tj 47 101, et seq. As depicted in more detail below, between
1983 and 2005 the Airport received a total of $13.15 million in Federal airport development assistance in the
form of AIP grants.26
CRQ Grant History
26
FAA Exhibit 1, Item 15
IV.
ISSUES UNDER INVESTIGATION
The purpose of FAAs review is to determine whether the Countys practices vis-a-vis the Complainants are
consistent with Federal law and applicable FAA policy. Therefore, under the particular circumstances existing
at CRQ and the entire record herein, and based on FAA Rules of Practice for Federally-Assisted Airport
Proceedings (Part 16), and the applicable Federal law and FAA policy, the issues under investigation before the
FAA are:
Issue 1
0
Whether the County, by granting a 30-year lease to PAC/Burrows along with a right of first refusal,
constitutes a violation of Grant Assurance 23, Exclusive Rights, 49 USC 4 40103(e) and 49 U.S.C. 3
47 107(a)(4),
Issue 2
Whether the County, by its actions regarding PAC/Burrows, which resulted in the displacement of based
aircraft, constitutes a Grant Assurance 22, Economic Nondiscrimination, 49 USC 47 107(a),
Issue 3
0
Whether the County, by granting PAC/Burrows a right of first refusal as part of the 1993 Settlement
Agreement, constitutes a violation of Grant Assurance 5 , Preserving Rights and Powers,
Issue 4
Whether the Countys actions regarding the PAC/Burrows leasehold amounts to a violation of Grant
Assurance 35, Relocation and Real Property Acquisition, 42 USC 5 4601 et seq.
0
V. BACKGROUND
In 1965, the County entered into a lease with an aeronautical service provider called South Coast Flying Service,
Inc. In 1978, this lease with South Coast Flying Service, Inc. was assigned to Elden W. Burrows d/b/a Burrow$
and Sons burrow^).^' On November 1990, the County entered into a lease directly with Burrows. In August
1993, the County filed an unlawful detainer action in state court against Burrows for various defaults under its
As a result, a Settlement Agreement was reached on December 10, 1993.30
lease with
The Settlement Agreement explicitly gave PAC/Burrows (PAC is by then an entity that included Burrows and
additional partner^),^' the right of first refusal to develop the property constituting its leasehold.32 Specifically,
the Settlement Agreement stated that while PAC/Burrows remains in possession of the premises, the County is
to complete its Phase 1 of the Master Plan update and prepare a Request for Proposal (WP) for development of
the premises and that prior to the publication of the RFP the County will give PAC a right offirst refusal.33
27
FAA Exhibit 1, Item 1, p. 3, FAA Exhibit 1, Item 5 , p. 6.
FAA Exhibit 1, Item 1, p. 3-4, FAA Exhibit 1, Item 5 , p. 6-7.

Exhibit 1, Item 5 , p. 7. An unlawful Detainer proceeding is an action to return a wrongfully held tenancy (as one held by a tenant
after the lease has expired) to its owner. See Black Law Dictionary, 7 Edition, 1999.
3 1 Since there is a legal relationship between Burrows and PAC and both entities are interlaced in the proceedings, we have used, from
this point forward and in order to avoid confusion, the term PAC/Burrows when referring to PAC or Burrows or both.
32 FAA Exhibit 1, Item 5 , p. 7, FAA Exhibit 1, Item 1, p. 4.
33 FAA Exhibit 1, Item 1, Attachment 1, p. 4.A right of first refusal is a priority arrangement that grants or gives a prospective tenant the
right, over others, to enter into a particular agreement, given certain agreed conditions.
29
30 FAA
In October 1995, the County responded to an inquiry challenging the Countys authority to grant the right of
first refusal and not issue a competitive bidding (RFP) for the property.34 In responding to this inquiry, the
County took the position that under State law, it has the authority to manage, sell, lease, or dispose of its
property and that under County law, airport property offered for lease does not have to be competitively bid. 3 s
In December 1997, the County published an Airport Master Plan (Master Plan, or MP).36The MP addressed
several airport planning issues, including accommodating air carriers, commercial operators, and general
aviation. In addition, it addressed existing conditions, aviation forecasts, facility requirements and alternatives,
Airport Layout Plan (ALP), financial implications, economic impacts, environmental consideration3 and the
need for hangars and parking apron, a general aviation terminal building, and fuel storage.38
In June 1998, the County executed the First Amendment to the 1993 Settlement Agreement (Amendment) with
PAC/Burrow~.~~
In this Amendment, both parties agreed, (1) that the Amendment is fully binding, (2) to
recognize certain changes in the composition of PAC/Burrows, and (3) to recognize the right of first refusal held
by PAC/Burrow~.~~
In May 2000, a study entitled Feasibility Analysis for Commercial Development and Improvements at CRQ
was i ~ s u e d .This
~ study was commissioned by the County to analyze a proposal, which PAC/Bmows was
associated with, to commercially develop and improve CRQ by including a large general aviation terminal, new
hangars of varylng types, a Jet center, and surface parking.42The study revealed significant issues regarding the
Countys acceptance of this proposal and concluded that the County should reject that particular development
proposal.43
In January 24,2001, the FAAs Airports Regional Office (Western Pacific Region) provided comments to the
County concerning PAC/Burrows proposal and lease at CRQ. In its e-mail communication, the FAA stated
that based on the review, the FAA does not object to the general outline of the proposed agreement contained
in Draft 7 of the county letter. We would like to review the proposed lease agreement when it is drafted. The
FAA also stated that Granting PAC, LLC a first opportunity to negotiate lease terms for a new restaurant
appears to be reasonable trade off for closing and relocating the old restaurant from the airfield side to the land
side of the airport.
However, to avoid the appearance of any impropriety, the terms for the new restaurant location should be based
on prevailing market conditions and market rates. Terms that are too favorable for the current tenant may appear
unjustly discriminatory and smack of an exclusive right when viewed by outside third parties. By basing the
terms of the new agreement on prevailing market conditions, the county is ensuring the airport will be as selfsustaining as possible under the circumstances that exist at the airport. The county should be trying to get the
best deal possible with PAC, LLC and equivalent to what it would obtain by soliciting bids on the open
market.
The final element of FAAs January 24, 2001, comments stated that based on airport certification requirements,
the FAA supports the Countys plans to relocate the restaurant from the airfield side to the landside of the
airport. The Airport Certification inspectors opine that the restaurants location presents safety and security
FAA Exhibit 1, Item 1, Attachment 2, FAA Exhibit 1, Item 5, p.7.

Exhibit 1, Item 1, Attachment 2, p.2.
36 FAA Exhibit 1, Item 1, p. 4-5, FAA Exhibit 1, Item 5 , p.8.
37 FAA Exhibit 1, Item 1, Attachment 3,I-1 - 1-3.
38 FAA Exhibit 1, Item 1, Attachment 3,4-8-5-3.
39 FAA Exhibit 1, Item 5 , p. 8, FAA Exhibit 1, Item 1, p.6.
40 FAA Exhibit 1, Item 1, Attachment 5 .
41 FAA Exhibit 1, Item 1, p. 6, FAA Exhibit 1, Item 5, p. 9.
42 FAA Exhibit 1, Item 1, Attachment 6, p. 1.
43 FAA Exhibit 1, Item 1 , Attachment 6, p. 2-4
44 FAA Exhibit 1, Item 1, Attachment 7.
34
35 FAA
shortcomings for the airport. Therefore, relocating the restaurant at the earliest possible date will eliminate this
airport certification concern. 4s
On August 20,2002, the FAAs Airports Regional Office (Western Pacific Region) responded to the Countys
request for FAA to ascertain whether a first right to negotiate for a new restaurant would be acceptable to the
FAA and for FAA to provide guidance on this matter.46The FAA provided the following comments and
guidance:
Regarding the restaurant, since it represents a non-aeronautical activity, you have more flexibility,
subject to local law, to negotiate with PAC/Burrows. To keep things uncomplicated, it may behoove you
to negotiate a separate pact for the restaurant, meaning you keep it separate from any aeronautical
agreement....
I inject a word of caution concerning the PAC/Burrows negotiations for an aeronautical arrangement at
CRQ. As I understand, the settlement agreement with [PAC/Burrows] stipulated that the County would
prepare an RFP and then give PACiBurrows the first right of refusal before opening the RFP to other
bidders. County Counsel opined that it was not necessary to develop an RFP. Counsel deemed it a
formality that the County could skip and go directly to negotiations with PACIBurrows. That opinion
may have rested on an assumption that PAC/Burrows is the entity that possesses the foremost
entitlement to negotiate a lease agreement to the exclusion of all other possible, yet remote, qualified
candidates. In other words, Counsel concluded that PACiBurrows was a shoe-in, so why spend time
developing an RFP if PAC/Burrows was going to exercise its right of first refusal and accept the RFP.
The possibility exists that Counsel omitted consideration of the grant assurance obligations in its
decision-making deliberations, in particular, [Grant Assurance 51, Preserving Rights and Powers, [Grant
Assurance 221, Economic Nondiscrimination, and [Grant Assurance 231, Exclusive Rights.
[Grant Assurance 51 mandates that the airport sponsor will not take any action to deprive itself of its
rights and powers to comply with the grant assurances. Grant Assurance 22 mandates that the airport
sponsor will make the airport available on reasonable terms without unjust discrimination. Grant
Assurance 22 prohibits the granting of an exclusive right.
What follows are my cautionary remarks:
The settlement agreement, per [Grant Assurance 51, cannot be used as a reason to subordinate the
Countys ability to comply with the grant assurances. In other words, the County should not give away
rights under the settlement agreement that would force the County to violate the grant assurances. For
example, by eliminating the formality of an RFP, the County is negotiating exclusively with
PAC/Burrows without clear preordained, county-established criteria for an agreement. So there was
never any doubt in PAC/Burrows collective mind about its exercising the right of first refusal. In other
words, the County made it easy for PACIBurrows to be the only entity in contention for a lease.
The nature of the negotiations can be construed as less than ideal because PAC/Burrows has a right of
first refusal for the last developable parcel of land at CRQ, opening the door to a perception that the
County is perhaps granting an exclusive right. PAC/Burrows, by virtue of a settlement agreement, has
won the right of first refusal. The complicating factor at CRQ is that it represents a right of first refusal
for the last developable parcel. So, for example, if there are other qualified parties with a desire to bid
on an airport parcel, they may yell foul if they are cut out of the negotiations and prevented from
45
46
FAA Exhibit 1 , item I , Attachment 7.

competing with PACBurrows. In the end, if they feel they were harmed, they may complain to the FM,
opening yet another Pandoras box. 47
On September 27,2002, an e-mail between two County employees identifies several issues associated with a
restaurant lease between the County and PACBunows. Two of the issues discussed were the term of the
restaurant lease and the lack of competition in awarding it.48
On November 21,2002, at a meeting of the Palomar Airport Advisory Committee (PAAC), both proponents and
those opposing the PACBurrows proposal discussed several issues related to recommendationsfor
PAC/Burrows new leases at CRQ. Among the issues discussed were the impact of the project on existing
users, the availability of temporary aircraft hangar and parking services while construction takes place, the fact
that the proposed project(s) were not available to public viewing, and that an RFP was not publi~hed.~
On December 5,2002, Jet Source, an FBO at CRQ, sent a letter to the County regarding the proposed thirty (30)
year PAC/Burrows lease and redevelopment plan and its impact on its own operation and potential litigation. In
its comments to the County, Jet Source raised several issues including the statement that the proposal was not
unveiled for review and the 1993 Settlement Agreement was not made available for review either. Jet Source
also identified the lack of an RFP as a problem (the 1993 Agreement required an FWP), the issue of the right of
first refusal, and potential violations of Federal requirements, including exclusive rights5
On December 1 1,2002, the County approved four (4) aviation-related leases (and one fuel lease) involving
PAC/Burr~ws.~
Figure 2 below depicts the location and size of the PAC/Burrows leasehold area in question in
this case. These leases effectively continued the PACBurrows leasehold first established as part of the 1993
Settlement Agreement and the subsequent 1998 amendment. The leases gave PAC/Bmows three years to
complete the planned development, until December 2005.*
On October 2,2003, the County wrote to the FAA on the issue of additional tie-downs at CRQ. In that letter,
the County submitted layout exhibits of the proposed PAC/Bun-owsproject to ascertain whether any alrport
standards would change as a result of the implementation of the pr~posal.~
In this letter, the County recognized
that as a result of the proposed PAC/Burrows site plans, they will be experiencing a major loss of tie-down
space for general aviation aircraft, that general aviation pilots current tie-down positions at available
leaseholds will be significantly reduced, and that there may be in the neighborhood of two hundred (200) lost
tie-down locations when these master lessees begin their development projects early next summer. 54
The County added that it wishes to be proactive in our attempts to provide as many tie-down alternatives as
possible to help soften the effects of this loss of aircraft parking and that our objective in respect to the
temporary tie-down location is to give the airport time to possibly acquire additional lots for automobile
parlung, thereby fieeing up additional onsite tie-down space. This period would also afford the affected GA
pilots time to find alternate locations at other airports. In addition, it will allow us time to develop incentive
packages to encourage aircraft owners to willingly relocate.
FAA Exhibit 1, Item 1 , Attachment 10.

49 FAA Exhibit 1, Item 1, Attachment 12,
51
FAA Exhibit 1, Item 1, p. 10, FAA Exhibit 1 , Item 5, p. 12.
52
53
54
55
47
48
Figure 2 -Aerial photo of the McClelland-PalomarAirport showing the general area where
the PAC leasehold area in question is located. (Source: USGS)
Also in the October 3,2003 letter to the FAA, the County identifies the need to accommodate a growing
corporate jet market and that as a result, the lessees have indicated that they intend to construct a few large
corporate jet hangars to accommodate this market versus accommodating many GA tie-down customers. These
lessees plan to convert their tie-down accommodations to facilitate a few large hangars to accommodate a new
more lucrative corporate jet customer market. 56 It was at this time that the County recognized that Palomar
Airport is currently built out and appears politically landlocked with respect to expansion into the City of
Carlsbad (the Permitting City authority). 57
On October 3,2003, PACiBurrows wrote to the County on the issue of the proposed lease. In its letter,
PAC/Burrows stated that the redevelopment at CRQ is related to the issue of additional area to accommodate
tie-down users.58 The letter also stated that PACBurrows had forwarded proposals for the development of
alternative space in several locations at Palomar, whether that space was to be master leased to our company
[PAC], another company, or was to be operated directly by the County. We want to stress the urgency of
developing such space as soon as possible, whoever may be chosen as the operator. We feel that our various
proposals all had merit and that the needs of our current tie-down customers should be looked to, irrespective of
the undeniable trend towards commercial and jet aviation. 59 Finally, PAC/Burrows stated that if the County is
entertaining a retroactive change of our plan [PACBurrows proposal], that we be informed of that intention and
that appropriate extensions of time be given for any delay resulting from the Countys actions.60
On November 21,2003, the Palomar Airport Advisory Committee (PAAC) held a public meeting where
representatives of PACBurrows presented several plans related to the proposed PAUBurrows project and how
PAC/Burrows is working with the County to try to obtain temporary facilities for everyone and try to place
hangar and tie-down customers, if possible, in adjacent areas or on other airports. The issue of whether the
56

6o FAA Exhibit 1, Item 1, Attachment 19.
58
59
10
project should be phased in coordination with attempts to accommodate those businesses displaced was also
discussed.6'
On November 25,2003, a light aircraft owner wrote to the County objecting to the plan to displace aircraft from
the PAC/B~rrows.~~
On January 14,2004, the County awarded a 30-year lease to PAC/Burrows for approximately 0.24 acres for a
restaurant on a landside location where car parking used to be located.63
On January 16,2004, an airport user's group named the Palomar Airport Association (PAA) wrote to the FAA
objecting to the PAC/Burrows development plans pending approval of the North Ramp proposal.64The North
Ramp proposal is primarily composed of approximately 160 new tie-down locations along the northern airport
boundary. 65 This area is outlined in pink in Figure 3 below.
In June 2004, PAC/Burrows proposed a Prepaid Hangar Lease Reservation Agreement (Prepaid Lease
Agreement) 66 to be executed between PAC/Burrows and Donnya Daubney d/b/a Carlsbad Aircraft Pilot Supply,
one of the Complainants in this case.67The record does not contain an executed version of this document.
Although PAC/Burrows originally provided the mentioned Prepaid Lease Agreement with a fuel tie-in
provision,68this provision was withdrawn on July 1, 2004.69
On June 29,2004, the FAA approved the proposed development on the North side of CRQ as a tie-down area.
In its letter to the County, the FAA stated that after evaluation of design standards, "we have agreed to allow the
County to proceed with building the particular North side apron and 35' B-11 taxiway development.. .''70
However, this development, designed to accommodate aircraft and users impacted by the PAC/Burrows
Figure 3 Proposed tie-down areas on the North side of CRQ is shown here in pink. The small blue crosses represent actual
aircraft tie down areas typically used for single-engine aircraft.. (Source: FAA Exhibit 1, Item 5, Attachment 16).

63 FAA Exhibit 1, Item 5, p. 16 and Attachment 7 and Exhibit A of Attachment 8.
"FAA Exhibit 1, Item 1 , p. 16.
11
development, will not be ready for nearly two years.71

On July 9,2004, PAC/Burrows sent commercial tenants notices terminating their month-to-monthleases and
informing them to vacate on or before October 1, 2004.72On July 14,2004, the attorney representing the
Complainants wrote to the County requesting copies of PACBunows financials to determine whether
PACBurrows was capable of completing the projects associated with its agreements with the County.73On July
20,2004, PAC/Burrows sent notices to vacate to month-to-month tie-down and hangar tenants. PACBurrows
also stated that it intended to begin redevelopment of its leasehold on or about October 1,2004. 74
On July 25,2004, the attorney for the Complainants wrote to PAC/Burrows regarding tie-down and
maintenance hangar space availability. In the letter, impacted business and users stated that they are willing to
enter into negotiations for space provided PACBurrows represents in writing that it is malung available hangar
space and tie-down space on reasonable and equitable terms and whether PACBurrows is willing to offer
standard long-term leases of maintenance hangar space at a rate in the neighborhood of $0.90 per foot, which we
have learned is the current fair market value of hangar space at CRQ.75
On July 28,2004, aircraft owner John Cornelius wrote to the County stating that the new North Ramp will not
be completed for years and raising concerns regarding the Countys plans to accommodate displaced aircraft
while construction on PACBurrows leasehold takes place.76Also on July 28, a County e-mail addressed the
impact of PAC/Burrows development on the Countys own transient tie-downs. It the e-mail, the Countys Real
Estate Manager states, that this may put Donnya out of business, although that may be happening anyway if
PAC is terminating all t i e - d ~ w n s . ~ ~
On July 30,2004, pursuant to California Public Records Act (CPRA), California Government Code Section
6250, the Complainants asked the County for several documents regarding the PACBurrows development
project, including operating agreements, correspondence, and e - m a i l ~ . ~ ~
On August 3,2004, PACBurrows wrote the County on matters regarding the PACBurrows leasehold. In its
letter, PAC/Burrows states that a total of 124 aircraft were impacted by the notice to vacate, that the number of
temporary spaces available at CRQ is 34, and that the new number of displaced aircraft is 90.79The
Complainants believed the actual number to be between 90 and 150 aircraft.80
On August 4,2004, the County held a meeting for airport tenants. At the meeting, the County described the
availability of 103 alternative tie-downs and hangar spaces at other County airports, except for Borrego Valley
Airport.
On August 6,2004, the Complainants wrote to the County regarding the PAC/Burrows development and its
impact on existing tenants as well as a intention to file a 14 CFR Part 16 complaint.82The Complainants
thanked the County for the commitment to search for workable resolutions to the many problems presented by
the PAC/Bmows re-development plans but also expressed concern over PACBurrows plans to force
~
FAA Exhibit 1, Item 5, p. 17, FAA Exhibit 1, Item 1, p. 17.

71 FAA Exhibit 1, Item5, p. 17, FAA Exhibit 1, Item 1, p.17.
72 FAA Exhibit 1, Item 1 , Attachment 30.
69
70
12
approximately 150 light general aviation aircraft from the airport for at least 16 -18 months while PAC attempts
to convert its leasehold from GA to corporate jet use and that PAC adds insult to injury by announcing rates
for the new facilities that are double or triple the current rates and at least double the rates of the other FBOs at
CRQ. 83 The Complainants also stated that unfortunately, despite the work that you [County] and I
[Complainants attorney] have put into this, it appears that PACs plans are so oppressive that reasonable
alternatives are not possible. In light of the anti-competitive nature of the initial award of the master leases by
your predecessors to PAC, PACs unwillingness to reasonably accommodate the light general aviation users, and
in light of the County Supervisors apparent abdication of oversight responsibilities, we believe we have no other
alternative but to file a formal Part 16 complaint with the FAA.84
On August 12,2004, PAC/Bumows distributed an Extension of TenancyNotice to Vacate Agreement to monthto-month tenant^.^' This extension provided for an extension of the term for the tenants; a notice to vacate upon
30 days notice; and a requirement that tenants waive all protests, liquidation damages and attorney fees.86Also
on August 12,2004, the County agreed to r n e d i a t i ~ n . ~ ~
However, on August 17,2004, the Complainants filed a Complaint under the Rules of Practice for Federally
Assisted Airport Proceedings, 14 CFR Part 16 of the Code of Federal Regulations. The Complaint was docketed
by the FAA as docket No. 16-04-08.88On August 29,2004, the California Pilots Association (CPA) filed a
letter in support of the complainant^.^^
On October 1,2004, the California Department of Transportation (Caltrans) wrote to the County on the subject
of the compliance inspection conducted on August 3 1,2004. It the letter to the County, Caltrans stated its
support for projects to replace older decaying and collapsing hangars, relocate the primary airport
restaurant. ..90
On September 1,2004, the County of San Diego, as the Respondent, filed a Request for Dismissal of the
Complaint with the FAA.91A Notice of Docket was issued by the FAA on September 3, 2004.92On September
14,2004, the Respondents Request for Extension of Time to File an Answer was accepted by the FAA,
effectively granting a sixty (60) day extension.93
In October 22,2004, Donnya Daubney d/b/a Carlsbad Aircraft Pilot Supply, one of the Complainants, moved
onto Magellan leasehold property, also located at CRQ, along with eight aircraft.94On October 26, two aircraft
belonging to the YAK Flight Club, of which one of Complainants is a member [Mr. Roger Baker], relocated
from the PAC/Burrows leasehold to the Countys own tie-down ramp on the west end of CRQ. 95
On November 4,2004, the Respondent filed an Answer to the Complaint96along with a Motion to Dismiss97and
a Memorandum in Support of the Respondents Motion to Dismiss.98 Finally, the Complainants filed a Reply to
FAA Exhibit
FAA Exhibit
85 FAA Exhibit
86 FAA Exhibit
87 FAA Exhibit
88 FAA Exhibit
89 FAA Exhibit
90 FAA Exhibit
91 FAA Exhibit
92 FAA Exhibit
93 FAA Exhibit
94 FAA Exhibit
FAA Exhibit
96 FAA Exhibit
97 FAA Exhibit
98 FAA Exhibit
83
84
1, Item 1, Attachment 43.

1, Item 1 , Attachment 43.
1, Item 5, p. 20.
1, Item 1, p. 19, FAA Exhibit 1, Item 5, p. 20.
1, Item 1, p. 1.
1, Item 13.
1, Item 3.
1, Item 2.
1 , Item 4.
1 , Item 5, Attachment 3.
1, Item 5.
1, Item 6.
1, Item 7.
13
the Respondents Answer on November 10,2004 that included a Declaration by Mr. Roger Baker. The
Respondents Rebuttal was filed with the FAA on September 16, 2004.00
Finally on December 5,2004, Ms. Kate Lister, president of Barnstorming Adventurers, Ltd, filed comments
regarding Docket 16-04-08. This filing was followed by a Respondents Motion to Strike certain documents
from the record.
VI. APPLICABLE LAW AND POLICY

A.
The Airport Improvement Proeram and the Airport Sponsor Assurances
Title 49 U.S.C. 5 47101, et seq., provides for Federal airport financial assistance for the development of publicuse airports under the AP established by the AAIA (Airport and Airway Improvement Act) as amended.
Section 47107, et seq., sets forth grant assurances to which an airport sponsor agrees as a condition of receiving
Federal financial assistance. Upon acceptance of an ATP grant, the grant assurances become a binding
contractual obligation between the airport sponsor and the Federal government. The FAA has a statutory
mandate to ensure that airport owners comply with these sponsor assurances.1o2
FAA Order 5 190.6A, Airport Compliance Requirements provides the policies and procedures to be followed by
the FAA in carrying out its legislatively mandated functions related to federally obligated airport owners
compliance with their sponsor grant assurances.
As discussed in more detail below, several grant assurances apply directly or indirectly to this complaint. They
are the prohibition against exclusive rights, Grant Assurance 23, economic nondiscrimination, Grant Assurance
22, relocation and real property acquisition, Grant Assurance 35, preserving rights and powers, Grant Assurance
5, and Airport Layout Plan, Grant Assurance 29. In addition, applicable FAA policies relevant to this case
include the FAAs Policies on Minimum Standards and FAAs Policy Regarding Airport Rates and Charges.
B.
The FAA Airport Compliance Propram
The FAA ensures that airport owners comply with their Federal grant obligations through the FAAs Airport
Compliance Program. The program is based on the contractual obligations, which an airport owner accepts
when receiving Federal grant funds or the transfer of Federal property for airport purposes. These obligations
are incorporated in grant agreements and instruments of conveyance in order to protect the publics interest in
civil aviation and to ensure compliance with Federal laws. The FAA Airport Compliance Program is designed to
ensure the availability of a national system of safe and properly maintained public-use airports operated in a
manner consistent with the airport owners Federal obligations and the publics investment in civil aviation. The
Airport Compliance Program does not control or direct the operation of airports; rather it monitors the
administration of the valuable rights pledged by airport sponsors to the people of the United States in exchange
for monetary grants and donations of Federal property to ensure that the public interest is being served. As a
general rule, the FAA Compliance Program is designed to monitor voluntary compliance with Federal
obligations.
In addressing allegations of noncompliance, the FAA will make a determination as to whether an airport sponsor
is currently in compliance with the applicable Federal obligations. FAA will make a judgment of whether the
airport sponsor is meeting the Federal obligations. FAA may also take into consideration any action or program
the sponsor has taken or implemented or proposed action or program the sponsor intends to take, which in
FAAsjudgment, is adequate to reasonably carry out its obligations under the grant assurances.1o3Thus, the FAA
FAA Exhibit 1, Item 8 and 9.
FAA Exhibit 1, Item 10.
lo FAA Exhibit 1, Item 12.
102
See, e.g., 49 U.S.C. 0 40101 et seq; 46101 st seq; and 47104 et seq.,
lo3 See FAA Order 5 190.6A, Sec. 5-6.
99
loo
14
can take into consideration reasonable corrective actions by the airport sponsor as measures to resolve alleged or
potential violations of applicable Federal obligations, and as measures that could prevent recurrence of
noncompliance and ensure compliance in the future.
C.
Enforcement of Airport Sponsor Assurances
49 U.S.C. 0 40101, et seq., assigns the FAA Administrator broad responsibilities for the regulation of air
commerce in the interests of safety, security, and development of civil aeronautics. Various legislative actions
augment the Federal role in encouraging and developing civil aviation. These actions authorize programs
providing funds and other assistance to local communities for the development of airport facilities. In each
program, the airport sponsor assumes certain obligations, either by contract or by restrictive covenants in
property deeds and conveyance instruments, to maintain and operate its airport facilities safely, efficiently, and
in accordance with specified conditions. Commitments assumed by airport sponsors in property conveyance or
grant agreements are important factors in maintaining a high degree of safety and efficiency in airport design,
construction, operation and maintenance, as well as, ensuring the public reasonable access to the airport.
Pursuant to 49 U.S.C. Q 47122, the FAA has a statutory mandate to ensure that airport owners comply with their
sponsor assurances. FAA Order 5 190.6A details aspects of the airport compliance program.lo4 Finally, Federal
Regulation 14 CFR Part 16 FAA Rules ofpractice for Federally-Assisted Airport Proceedings was published in
the Federal Register (61 FR 53998, October 16, 1996) and implemented on December 16, 1996.
D. The Prohibition Apainst Exclusive RiPhts - Grant Assurance 23

49 USC 0 40103(e), provides, in relevant part, that [a] person does not have an exclusive right to use an air
navigation facility on which Government money has been expended. An air navigation facility includes an
airport. 105 49 U.S.C. 0 47107(a)(4), similarly provides, in pertinent part, that a person providing, or intending
to provide, aeronautical services to the public will not be given an exclusive right to use the airport.
Grant Assurance 23, Exclusive Rights, of the prescribed sponsor assurances requires, in pertinent part, that the
sponsor of a Federally obligated airport:
... will permit no exclusive right for the use of the airport by any person providing, or intending to
provide, aeronautical services to the public ... It further agrees that it will not, either directly or indirectly,
grant or permit any person, firm, or corporation, the exclusive right at the airport to conduct any
aeronautical activities...
An exclusive right is defined as a power, privilege, or other right excluding or debarring another from enjoying
or exercising a like power, privilege, or right. An exclusive right can be conferred either by express agreement,
by the imposition of unreasonable standards or requirements, or by any other means. Such a right conferred on
one or more parties, but excluding others from enjoying or exercising a similar right or rights, would be an
exclusive right.lo6
Therefore, based on the above statutes, the sponsor of a federally obligated airport must not permit an exclusive
right for the use of the airport by any person providing, or intending to provide, aeronautical services to the
public ...will not, either directly or indirectly, grant or permit any person, firm, or corporation, the exclusive right
at the airport to conduct any aeronautical activities. FAA Order 5 190.6A clarifies the applicability, extent and
duration of the prohibition against exclusive rights under 49 USC Q 40103(e) with regard to airports developed
with FAA administered grant assistance and Federal property conveyance^.'^^ The exclusive rights prohibition
remains in effect as long as the airport is operated as an airport. FAA takes the position that the grant of an
exclusive right for the conduct of any aeronautical activity on such airports is contrary to the requirements of the
See also Sec. 6-2.
See 49 USC $$ 40102(a)(4), (9), (28).
06 See FAA Order 5 190-5 Exclusive Rights at Airports.
IO7 See FAA Order 5 190.6A. Sec. 5-6.
IO5
15
applicable laws, whether such exclusive right results from an express agreement, from the imposition of
unreasonable standards or requirements, or by any other means.
E.
The FAA's Policv on Minimum Standards
The FAA encourages airport management, as a matter of prudence, to establish minimum standards to be met by
all who would engage in a commercial aeronautical activity at the airport. It is the prerogative of the airport
owner to impose conditions on users of the airport to ensure its safe and efficient operation. Such conditions
must, however, be reasonable and not unjustly discriminatory. They must be relevant to the proposed activity,
reasonably attainable, and uniformly applied.'" The FAA ordinarily makes an official determination regarding
the relevance and/or reasonableness of the minimum standards only when the effect of a standard denies an
aeronautical activity access to a public-use airport.
FAA Advisory Circular 15015190-5, Exclusive Rights and Minimum Standards for Commercial Aeronautical
Activities, June 10,2002, discusses FAA policy regarding the development and enforcement of airport minimum
standards. The FAA policy for recommending the development of minimum standards serves the objective of
promoting safety in all airport activities, maintaining a higher quality of service for airport users, protecting
airport users from unlicensed and unauthorized products and services, enhancing the availability of adequate
services for all airport users, and promoting the orderly development of airport land. Therefore, airport sponsors
should strive to develop minimum standards that are fair and reasonable to all on-airport business operators and
relevant to the activity that the minimum standards concern. The use of minimum standards as a vehicle to
effect an exclusive business operation is prohibited. The FAA recognizes that some sponsors might attempt to .
design their minimum standards to protect only the interests of one business operator, which can be interpreted
as the grant of an exclusive right and a potential violation of the FAA's policy. log
F.
Economic Nondiscrimination Public Use of the Airport) - Grant Assurance 22
The owner of any airport developed with Federal grant assistance is required to operate the airport for the use
and benefit of the public and to make it available to all types, kinds, and classes of aeronautical activity on
reasonable terms, and without unjust discrimination. Grant Assurance 22, Economic Nondiscrimination, of the
prescribed sponsor assurances implements the provisions of 49 U.S.C. 8 47107(a)( 1) through (6), and requires,
in pertinent part, that the sponsor of a federally obligated airport
...will make its airport available as an airport for public use on reasonable terms, and without unjust
discrimination, to all types, kinds, and classes of aeronautical activities, including commercial
aeronautical activities offering services to the public at the airport. [Assurance 22(a)]
...may establish such reasonable and not unjustly discriminatory conditions to be met by all users of the
airport as may be necessary for the safe and efficient operation of the airport. [Assurance 22(h)]
FAA Order 5 190.6A describes in detail the responsibilities assumed by the owners of public use airports
developed with Federal assistance. Among these is the obligation to treat in a uniform manner those
aeronautical users making the same or similar use of the airport and to make all airport facilities and services
available on reasonable terms without unjust discrimination."'
'''See FAA Order 5190.6A, Aimort Comdiance Requirements, Sec. 3- 12,3-17 @),(c); See also FAA Advisory Circular 150/5190-5..
lo9
Section 2.2 of FAA Advisory Circular 150/5 190-5.
' l o See Order, Sections 3-1 and 4-14(a)(2).
16
G. FAA's Policy Reparding Airport Rates and Charpes

The FAA's Policy Regarding Airport Rates and Charges (Rates and Charges Policy), dated June 21, 1996,
established the requirements to be followed by airport sponsors when establishing airport rates and charges.'"
Rates, fees, rentals, landing fees, and other senice charges (fees) imposed on aeronautical users for aeronautical
use of airport facilities must be fair and reasonable."' Aeronautical fees may not unjustly discriminate against
aeronautical users or user groups.1i3Airport proprietors must maintain a fee and rental structure that in the
circumstances of the airport makes the airport as financially self-sustaining as po~sible."~
Among others, the Policy distinguishes between nonaeronautical,' l5 airfield-aeronautical, and non-airfieldaeronautical airport facilities and services. When establishing aeronautical rates and charges, the airport sponsar
must use a rate methodology that is reasonable, transparent, and consistent.
Under the FAA grant assurances, all aeronautical users116are entitled to airport access on fair and reasonable
terms without unjust discrimination. Therefore, the principles and guidance set forth in the Policy apply to all
aeronautical uses of the airport. The FAA recognizes, however, that airport proprietors may use different
mechanisms and methodologies to establish fees for different facilities, e.g., the airfield. The FAA takes these
differences into account when called upon to resolve a dispute over aeronautical fees or, to otherwise consider
whether an airport sponsor is in compliance with its obligation to provide access on fair and reasonable terms
without unjust discrimination. l 7
The prohibition on unjust discrimination does not prevent a sponsor from making reasonable distinctions among
aeronautical users and assessing higher fees on certain categories of aeronautical users based on those
distinctions. Airport sponsors must allocate rate-base costs to their aeronautical users by a transparent,
reasonable, and not unjustly discriminatory rate-setting methodology.
Sponsors may set fees by ordinance, statute, resolution, regulation, or agreement. Federal law does not require a
single rate-setting approach. Accordingly, sponsors may use a residual, compensatory, hybrid, or any other ratesetting method as long as the methodology is consistent for similarly situated aeronautical users and conforms to
the Policy. In general, the Policy permits fees to be set by any reasonable method. Fees may be generally
See 61 Fed. Reg. 31994.; httD://www.faa.gov/a~/Ddftxt/ratesl.htm. Subsequently, United States Court of Appeals for the
District of Columbia vacated and remanded portions of the Policy Statement setting forth guidance on fair and reasonable airfield
and non-airfield fees. See Air TransDort Association of America v. DeDarbnent of Transportation (ATA v. DOT), 119 F.3d 38
(D.C. Cir. 1997), amended 129 F. 3d 625. Specifically, the Court vacated: paragraphs 2.4,2.4.1,2.4.l(a), 2.5.1,2.5.l(a), 2.5.l(b),
2.5.l(c), 2.5.l(d), 2.5.l(e), 2.5.3,2.5.3(a), 2.6, the Secretary's supporting discussion in the preamble, and any other portions of the
rule necessarily implicated by the holding of the August 1, 1997 opinion. Consequently, we will only use those valid portions of the
Final Policy that were not vacated when considering the reasonableness of rates in this proceeding.
' I 2 See Paragraph 2 (no decimal place) of the Policy, found at 61 Fed. Reg. 31994, 32019; httD://www.faa.gov/arp/Ddftxt/ratesl
.htm. see
also 49 U.S.C. 0 47107(a)(l).
113
.htm, see
See Paragraph 3 (no decimal place) of the Policy, found at 61 Fed. Reg. 3 1994,32021; httD://www.faa.rrov/arp/Ddftxt/ratesl
also 49 U.S.C. 47107(a)(1).
See Paragraph 4 (no decimal place) of the Policy, found at 61 Fed. Reg. 3 1994, 32021; httD://www.faa.gov/mbdftxt/ratesl.htm,
see
also 49 U.S.C. $47107(a)(13(A).
'Is The FAA defines aeronautical use as all activities that involve the operation of aircraft including, activities that make the operation of
aircraft possible, activities that make the operation of aircraft safe, and any activity otherwise directly related to the operation of aircraft.
Services located on the airport that are directly and substantially related to the movement of passengers, baggage, mail, and cargo on the
airport are also considered aeronautical uses. Persons, whether individuals or businesses, engaged in aeronautical activities involving the
operation of aircraft or providing flight support directly related to the operation of aircraft are aeronautical users. See e.g., FAA Order
5 190.6A, Appendix 5 (1989).
'I6 The FAA considers the aeronautical use of an airport to be any activity that involves, makes possible, is required for the safety of, or
is otherwise directly related to, the operation of aircraft. See e.g., FAA Order 5 190.6A, Appendix 5 (1989). Persons, whether individuals
or businesses, engaged in aeronautical uses involving the operation of aircraft, or providing flight support directly related to the operation
of aircraft, are considered to be aeronautical users.
See Section A of the Policy, found at 61 Fed. Reg.31994,32017; http://www.faa.gov/arp/pdftxt/ratesl
.htm.
17
established through direct negotiations with individual users. The FAA has, therefore, adopted a flexible
approach to preserve the discretion of airport proprietors and aeronautical users to negotiate terms.'"
H. Grant Assurance 35 Relocation and Real Property Acauisition

Grant Assurance 35, Relocation and Real Property Acquisition, requires an airport sponsor to be guided in
acquiring real property, to the greatest extent practicable under State law, by the land acquisition policies in
Subpart B of 49 CFR Part 24 and will pay or reimburse property owners for necessary expenses as specified in
the Subpart. In addition, the airport sponsor is to provide a relocation assistance program offering the services
described in Subpart C and fair and reasonable relocation payments and assistance to displaced persons as
required in Subpart D and E of 49 CFR Part 24.
Finally, the airport sponsor must make available within a reasonable period of time prior to displacement,
comparable replacement dwellings to displaced persons in accordance with Subpart E of 49 CFR Part 24. The
purpose of 49 CFR Part 2411' is to promulgate rules to implement the Uniform Relocation Assistance and Real
Property Acquisition Policies Act of 1970, as amended (42 U.S.C. 4601 et seq.), in accordance with the
following objectives:
(a) To ensure that owners of real property to be acquired for Federal and federally-assisted projects are
treated fairly and consistently, to encourage and expedite acquisition by agreements with such owners, to
minimize litigation and relieve congestion in the courts, and to promote public confidence in Federal and
federally-assisted land acquisition programs;
(b) To ensure that persons displaced as a direct result of Federal or federally-assisted projects are treated
fairly, consistently, and equitably so that such persons will not suffer disproportionate injuries as a result
of projects designed for the benefit of the public as a whole; and
(c) To ensure that Agencies implement these regulations in a manner that is efficient and cost effective.
I.
Grant Assurance 5, Preservinp Riphts and Powers
Grant Assurance 5 , Preserving Rights and Powers implements the provisions of the MIA,49 USC Section
47107(a), et seq., and requires, in pertinent part, that the sponsor of a federally obligated airport "...will not take
or permit any action which would operate to deprive it of any of the rights and powers necessary to perform any
or all of the terms, conditions, and assurances in the grant agreement without the written approval of the
Secretary, and will act promptly to acquire, extinguish or modify any outstanding rights or claims of right of
others which would interfere with such performance by the sponsor."
FAA Order 5 190.6A,Airport Compliance Requirements, (Order) describes the responsibilities under Assurance
5 assumed by the owners of public-use airports developed with Federal assistance. Among these is the
responsibility for enforcing adequate rules, regulations, or ordinances as are necessary to ensure the safe and
efficient operation of the airport.12' Under Grant Assurance 5 , an airport sponsor cannot take any action that
may deprive it of its rights and powers so it can direct and control airport development and comply with the
grant assurances. Grant Assurance 5 requires the airport sponsor not sell, lease, encumber, or otherwise transfer
or dispose of any part of its title or other interests in the property shown on Exhibit A without the prior approval
of the FAA.
Of particular interest to the FAA would be the granting of property interests to entities on the airport that may
restrict the airport sponsor's ability to preserve its rights and powers to operate the airport in compliance with
'I8
I2O
See Policy, found at 61 Fed Reg. 3 1994,32021; http://www.faa.gov/arp/pdflxt/ratesl

.him.
[54FR 8928, Mar. 2,1989; 54 FR 24712, June 9, 19891
See Order, Secs. 4-7 and 4-8.
18
the Federal obligations. One of the most common violations of Grant Assurance 5 may occur when airport
sponsors enter into agreements with terms that result in subsequent actions that may place the sponsor in
noncompliance with its Federal obligations. Therefore, clauses in the airport agreements that subordinate the
terms of the agreement to the applicable Federal obligations can preserve the airport sponsors rights and powers
to amend an agreement and operate the airport in compliance with the Federal obligations.
Grant Assurance 29, Airport Layout Plan
J.
Grant Assurance 29, Airport Layout Plan (ALP), requires an airport sponsor to keep up-to-date the ALP.
Specifically, Grant Assurance 29 requires the airport sponsor to show on its ALP the boundaries of the airport
and all proposed additions thereto, the location and nature of all existing and proposed airport facilities and
structures (such as runways, taxiways, aprons, terminal buildings, hangars and roads), and the location of all
existing and proposed nonaeronautical uses.
Airport layout plans and amendments, revisions, or modifications thereto, are subject to the approval of the
FAA. What this means from a practical standpoint is that an airport sponsor must not make or permit any
changes or alterations in the airport or any of its facilities which are not in conformity with the airport layout
plan.
From a compliance standpoint, if a change or alteration in the airport or its facilities is made which the FAA
determines adversely affects the safety, utility, or efficiency of any Federal investment on or off the airport and
which is not in conformity with the ALP as approved by the FAA, an airport sponsor may be required to
eliminate such an adverse effect in a manner approved by the FAA. This may include relocating the property (or
replacement thereof) to a site acceptable to the FAA and bearing the costs of restoring the property (or
replacement thereof) to the level of safety, utility, and efficiency existing before the unapproved change was
made in the airport or its facilities.
VII.
A.
ANALYSIS AND DISCUSSION

Compliance with 14 CFR Part 16.210)) and 14 CFR Part 16.23(i)
1. Compliance with 14 CFR Part 16.21(b)

In its defense, the County argues that the Complainants did not make substantial and reasonable good faith
efforts to resolve this matter informally prior to filing the Complaint as required by 14 CFR 9 16.21(b). 12 The
Director finds this argument without merit. First, the record unequivocally shows that all parties have been
involved with each other for several years and more recently since 2003 with the specific issue of the
PAC/Burrows development.22 Second, the notices to vacate that were issued by PAC/Bmows with County
consent are themselves an action that limits further informal resolution for those directly affected by the notices.
Finally, if FAA had doubts regarding compliance with 14 CFR 9 16.21(b), the FAA would not have docketed
this Complaint as complete.
2. Compliance with 14 CFR Part 16.310)

In its Motion to Dismiss, the County argues that the Complaint should be dismissed under 14 CFR Part 16.23
(j).12
14 CFR Part 16.23 (j)is a provision permitting a respondent to include a motion to dismiss the complaint
with a supporting memorandum of points and authoritie~.~~
Upon consideration for the Countys Motion to
Dismiss, the Director finds that since the arguments presented in the Motion to Dismiss, namely items 1 , 2 a-d,
See Background section f this determination.

lZ4
See 14 CFR Part 16.23 6).
19
and 3, are also represented in the Countys Affirmative Defense, the analysis in Section B, concerning
Affirmative Defenses, is the appropriate place to respond to each of the arguments and statements in the Motion
to Dismiss. Specifically, the Director points to Affirmative Defenses 1,4, 5 , 7, 8, 9, 10, and 12, discussed in
more detail below.
B.
Defenses
The following list of Defenses were raised by the County

1 - The Complaint Does not Establish a Reasonable Basis for Further Investigation by the FAA (First
Affirmative Defense)
2 - Complainants Do Not Have Standing to Pursue a Complaint under 14 CFR Part 16 (Second Affirmative
Defense)
3 - The Complainants Have No Standing to Bring a Challenge Under 14 CFR Part 16 On Behalf of Other
Tenants or Businesses at CRQ (Third Affirmative Defense)
4 - The Complaint Does Not Contain Sufficient Evidence to Meet the Complainants Burden of Proof to
Establish That the County Has Violated Grant Assurance 23 (Fourth Affirmative Defense)
Establish That the County Has Violated Grant Assurance 5 (Fifth Affirmative Defense)
6 - The Countys Redevelopment of CRQ is Reasonable and Not Unjustly Discriminatory (Sixth Affirmative
Defense)
Establish That the County Has Violated Grant Assurance 22 (Seventh Affirmative Defense)
8 - Complainants Allegations of Violation of Grant Assurance 22 Fail, as a Matter of Law, to State a Violation
of Federal Law or Applicable Grant Assurance Upon Which Relief Can be Granted Under Part 16 (Eight
Affirmative Defense)
Establish That the County Has Violated Any Provision of Grant Assurance 35,49 CFR Part 24, or the Uniform
Relocation Assistance and Real Property Acquisition Act (Ninth Affirmative Defense)
10 - Complainants Have Not Alleged and Could Not Prove That They Have Been Directly and Substantially
Affected by Any Violation by the County of Grant Assurance 35,49 CFR Part 24, or the Uniform Relocation
Assistance and Real Property Acquisition Act Because These Provisions Only Apply to Federally Assisted
Projects (Tenth Affirmative Defense)
11 - Complainants Allegations of Violation of Assurances With Respect to the Lease for a New Restaurant Site
Fail, as a Matter of Law (Eleventh Affirmative Defense)
12 - The FAA Lacks Authority Under 14 CFR Part 16 or Otherwise to Grant the Relief Sought by the
Complainants (Twelfth Affirmative Defense)
13 - The Complaint is Time-Barred (Thirteenth Affirmative Defense)
Upon review of Defenses numbers 1,2,3,10,13, the Director notes that the FAA initially found the Complaint
procedurally complete under 14 CFR Part 16.23 and 16.27, and thus rejects these defenses. In further regard to
Defense number 3, the Director notes the Countys position that the Complainants have no standing to bring a
20
challenge under 14 CFR Part 16 on behalf of other tenants or businesses at CRQ.

As an element in the
Complaint, the Complainants argue the Countys actions not only have negative impacts on them, but also on
other aviation entities operating at CRQ.26The record confirms that the Complainants argue in support of
entities not directly named in the Complaint.
The Complainants in this case are clearly identified as Pacific Coast Flyers, Inc., Donny Daubney d/b/a Carlsbad
Aircraft Pilot Supply, and Roger Baker. These three entities are the ones to which Part 16.21 and Part 16.23 are
applied as the parties directly and substantially affected by the alleged noncompliance, and identified as
responsible for initiating and engaging in informal resolution. Other entities mentioned in the Complaint are not
complainants for the purpose of this Part 16 action. Any consideration given to these entities would be
inconsistent with Part 16.3, which defines a Complainant as the person submitting the ~omplaint.~~
As to Defenses numbers 4-9, the record contains sufficient evidence for complainants to allege the violations
and are subsequently discussed in more detail below. In response to Defense number 10, the Director discusses
the merit of the allegation regarding Grant Assurance 35 in Section G of the Analysis.
As to Defense number 11, the County states the Complainants allegations of violation of assurances with
respect to the lease for a new restaurant site fail, as a matter of law, to state a violation of federal law or
applicable grant assurance upon which relief can be granted under Part 16. The Complainants allegations, even
taken as true, fail to constitute a violation of law or grant assurance, because the cited assurances do not apply to
leases for nonaeronautical uses.**The Countys statements are in response to the Complainants argument that
the particular steps taken by the County in dealing with the restaurant essentially gives PAC a lucrative
restaurant lease, excluding from consideration all other potentially interested par tie^.'"'^
A review of the record shows that on December 11,2002, as part of the Countys approval of the five leases
with PAC/Burrows, the County developed a Memorandum of Understanding regarding the relocation of the
restaurant to a site outside the secure area (airside) of the airp01-t.~~
On January 14,2004, the County awarded a
30-year lease to PAC/Burrows for approximately 0.24 acres for a restaurant on a landside location where car
parking used to be 10cated.l~
Complainants argued that PAC/Burrows was given without competition the new restaurant lease in a landside
location32or that the County gave PAC the new restaurant lease without publishing an RFP.. .133

Complainants argue that other businesses within the Burrows leasehold subject to the eviction notice include Barnstorming
Adventures, a company owned and operated by Kate Lister and Tom Hamish that offer the public rides and adventures in classic biplanes, war-birds and vintage aircraft and that Dan and Mary Older, who operate Aviation Service Co., an airplane mechanic shop, will
also be displaced and effectively priced out of business and deprived of its customers. They use two hangars and six tie-downs. In
addition, light aircraft technician Ron Gregory and his wife, Kate, will also be displaced and will no longer be a valuable resource to the
local aviation community. Smaller businesses include an upholsterer, avionics repair station, painters, and detailers. FAA Exhibit 1, Item
1, p. 2.
I2See Part 16.3 Definitions.
FAA Exhibit 1, Item 5, p, 22.
12 FAA Exhibit 1, Item 1, p. 9. As mentioned in the Background section, on September 27,2002, an e-mail between two County
employees identifies several issues associated with a restaurant lease between the County and PAC. The issues discussed in this e-mail
exchange include the term of the restaurant lease and the lack of competition in awarding it. FAA Exhibit 1, Item 1, Attachment 1 1.
FAA Exhibit 1, Item 5, p. 16 and Attachment 7 and Exhibit A of Attachment 8.
FAA Exhibit I , Item 1, p. 16.
21
Figure 4 -The existing airside restaurant at CRQ. (Source: FAA Exhibit 1, Item 5, Attachment 16).
Under its Federal obligations, an airport sponsor must not cause or permit any activity or action that would
interfere with the intended use of the airport for aeronautical purposes. The FAA has an interest in ensuring that
any lease, property transfer, easement, or use will not adversely affect the Federal investment in the
development, improvement, operation, or maintenance of the airport. That is why the grant assurances require
FAA concurrence, in advance, if aeronautical property displayed on the ALP is to be used for a nonaeronautical
purpose. The FAA must ensure that nonaeronautical uses do not act to restrict or undermine the utility of the
Federal investment in the airport. In this case, CRQ has space limitations in serving aeronautical needs. The
County recognizes this when it states Palomar Airport is currently built out and appears politically landlocked
with respect to expansion into the City of Carlsbad (the permitting City authority).y134
The FAA has, since 2001, stated that based on airport certification requirements, the FAA supports the Countys
plans to relocate the restaurant from the airfield side (see Figure 4 above) to a landside site and that FAA
inspectors have taken the position that the restaurants location presents safety and security shortcomings for the
airport and relocating it at the earliest possible date would eliminate this airport certification
Accordingly, the lease of the restaurant when viewed in the context of the effect on the aeronautical uses is
appropriate for review.36
FAA Exhibit 1, Item 1, Attachment 18, p. 1.

136 FAA Exhibit 1, Item 1, Attachment 7 and 10.
134
135
22
In any event, the terms and conditions for the relocation of the restaurant, a non-aeronautical facility, are not
applicable to the FAA grant assurances unless such relocation adversely affects the aeronautical use of the
airport, which in this case, it does not.
Under Defense number 12, the County contends that the FAA lacks authority under 14 CFR Part 16 or
otherwise to grant the relief sought by the Complainants. 137 Specifically, the County argues that the Complaint
does not contain any prayers for relief, so there is some uncertainty about what the Complainants would ask the
FAA to do if their complaint were sustained. Complainants suggest in its Reply that Countys transgressions
be carefully weighted and considered, and if deemed appropriate,
As stated in the Applicable Law and Policy Section of this determination, the FAA Airport Compliance Program
is designed to ensure the availability of a national system of safe and properly maintained public-use airports
operated in a manner consistent with the airport owners Federal obligations and the publics investment in civil
aviation. Many of these Federal obligations specifically relate to the use of airport property, availability of
airport property for aeronautical uses, reasonable access, prohibition in granting exclusive rights, and
preservation of rights and ~ 0 w e r s . l ~ ~
Since any action by a sponsor that compromises its ability to comply with the above-mentioned Federal
obligations is a matter under FAA jurisdiction, the lack of a specific prayer for relief in the complaint is not fatal
and the Director will avail himself to the remedies available under Part 16.
Finally, under Defense number 13, the County argues that the Complaint is time-barred.14 Since the County
fails to offer any specific arguments or support for its contention and the record does not indicate any reason
why or how it is time barred, the argument by the County that the Complaint is time-barred is rejected.
C.
Issue 1 - Exclusive Rights
Whether the County, by granting leases to PACBurrows resulting from a right of first refusal, has
granted an exclusive right in violation of Grant Assurance 23, Exclusive Rights, 49 USC 0 40103(e) and 49
U.S.C. 8 47107(a)(4).
The Complainants argue that the Countys Grant of a 30-year lease of the last developable parcel of airport
property to an inexperienced and unproven party pursuant to a confidential RFP and right of first refusal
constitutes an Exclusive Right prohibited by Grant Assurance 23 .I4 The Complainants also argue that
without responsible leasing practices, without an open and above-board planning and bidding process and
without any minimum standards to speak of, the current development project, disguised as a performance
lease, is merely an exclusive private enterprise feeding on the public trust.142
As discussed above, Grant Assurance 23, Exclusive Rights, requires that the County will prohibit any exclusive
right for the use of CRQ, by any person providing, or intending to provide, aeronautical services to the p ~ b 1 i c . l ~ ~
This includes PAC/Burrows. More specifically, the County cannot, either directly or indirectly, grant or permit
any person, firm, or corporation, such as PAC/Burrows, the exclusive right at the airport to conduct any
aeronautical activity. FAA Order 5 190.6A specifically states the advance grant of options or preferences
FAA Exhibit 1, Item 5 , p, 22.

For example, see Grant Assurances 22,23, 5 , and 29 at http://www.faa.gov/arp/financial/aip/assurances.cfm?ARPnav=financial
FAA Exhibit 1, Item 5 , p, 22.
142 FAA Exhibit 1, Item 9, p. 5 .
143 As discussed in more detail in the applicable law section of this decision, 49 U.S.C. Q 40103(e) prohibits exclusive rights and states, in
pertinent part, that [a] person does not have an exclusive right to use an air navigation facility on which Government money has been
expended. 49 U.S.C. Q 47107(a)(4), similarly provides, in pertinent part, that &aperson providing, or intending to provide, aeronautical
services to the public will not be given an exclusive right to use the airport.
13
23
(including right of first refusal) on all future sites to the incumbent enterprise must be viewed as an exclusive
right.144
The County challenges the Complainantsreference to this section in FAA Order 5 190.6A arguing that the
reference in FAA Order 5 190.6A relates to such rights granted on all future sites, not just on a site that is the
subject of a disputed leasehold, and that if an incumbent FBO were given options to all future sites at the
airport, that might constitute the granting of an illegal exclusive right. Here, in contrast, the option was for the
very parcel that was the subject of the lease dispute between the County and Burrows; that lease arguably gave
Burrows a right to 27 more years on the l e a ~ e h o l d . ~ ~ ~
The County reasons that Grant Assurance 23 does not forbid the County from entering into long-term leases
with FBOs and that it does not mandate any particular method of selecting leaseholders and did not require the
use of an RFP or competitive bidding before the PAC leases were made. 146 The County adds that it is not a
per se violation of Assurance 23, as the Complainants contend, for an airport sponsor to enter into a long-term
lease with an FBO even if the consequence is to give the FBO the right to develop and use a particular site
within the airport for a number of years. 14
The County maintains that the Complainants have not alleged, and could not prove, that PAC has an exclusive
right to act as an FBO at the Airport. There are, in fact, a total offive full-service FBOs at CRQ, as well as an
FBO for helicopter operators. 14*
The County contests that the PAC/Burrows leasehold is the last developable parcel at the airport 149 and that
the Complainants in this case are not other qualified parties seeking to develop the PAC parcel.5oIn fact, the
County argues the PAC/Burrows leasehold is redevelopment of an existing leaseh01d.l~In this case, the issue
before the Director is whether there is evidence that an exclusive right, as a power, privilege, or other right
excluding or debarring another from enjoying or exercising a like power, privilege, or right, was conferred by
the County to PAC/Bmows but not to another by the means of the right of first refusal.
Based on the arguments by both parties and the documents and information contained in the record, the Director
considered the following arguments: (1) consideration of previous FAA comments regarding the right of first
refusal and the 1993 Settlement Agreement, (2) the request for proposal (RFP), (3) the availability of minimum
standards, (4) whether other entities attempted or desired to develop the PAC/Burrows leasehold, and ( 5 )
whether the PAC/Burrows leasehold is the last developable parcel of land.
1.
Previous FAA Comments Regarding the Right of First Refusal and the 1993 Settlement
Agreement
The 1993 Settlement Agreement between the County and PAC/Burrows gave PAC/Burrows the right of first
refusal to develop the l e a s e h ~ l d . A
~review
~
of the record clearly shows that the FAA provided the County with
specific comments and concerns regarding the first right of refusal granted to PAC/Burrows as part of the
Settlement Agreement and subsequent amendments.
In its January 24, 2001, comments, the FAA stated that granting PAC/Burrows a first opportunity to negotiate
lease terms for a new restaurant appears to be a reasonable trade off for closing and relocating the old restaurant
FAA Order 5190.6A, 3-9 (c)(2).

14* FAA Exhibit 1, Item 7, p. 7.
14 FAA Exhibit 1, Item 5 , p. 11.
I5O FAA Exhibit 1, Item 5. p. 11
See FAA Exhibit 1, Item 5 , Attachment 7, PAC Overall Project Master Site Plan, September 15,2004.
144
145
24
from the airfield side to the land side of the

this comment was specifically and clearly directed at the
issue of the restaurant relocation only. The relocation of the restaurant away fi-omthe airside areas was the issue
of concern to the FAA and not the method the County may have used in awarding a new restaurant lease. The
Director reasons the restaurant, as a nonaeronautical activity, is not covered by the grant assurances at issue
here. Therefore, the Director rejects any arguments by the Complainants that the award of the restaurant lease is
a basis for a claim against the airport for noncompliance as alleged by the Complainants.
That said, the comments provided by the FAA on August 20, 2002, raised specific concerns related to the
Countys compliance with the grant assurances, including Grant Assurance 23, the assurance covering exclusive
rights. As part of its comments, the FAA warned of potential problems with the Countys leasing practices and
negotiations for aeronautical development at CRQ, particularly with regard to exclusive rights.154
The FAA stated that the Settlement Agreement could not be used as a reason to subordinate the Countys
ability to comply with the grant assurances and that the County should not give away rights under the
settlement agreement that would force the County to violate the grant assurances and ...The nature of the
negotiations can be construed as less than ideal because PACBurrows has a right of first refusal for the last
developable parcel of land at CRQ, opening the door to a perception that the County is perhaps granting an
exclusive right. PACBurrows, by virtue of a settlement agreement, has won the right of first refusal [on its
existing leasehold]. The complicating factor at CRQ is that it represents a right of first refusal for the last
developable parcel and if there are other qualified parties with a desire to bid on an airport parcel, they may
yell foul if they are cut out of the negotiations and prevented from competing with PACBurrows.. ..155
As mentioned above, the 1993 Settlement Agreement between the County and PACBUIYOWS~~
gave
PACBurrows the right of first refusal to develop the leaseh01d.l~~
More specifically, the Settlement Agreement
allowed PACBurrows to remain in possession of the premises, and was cause for the County to prepare a
Request for Proposal (RFP) for redevelopment of the premises.
Complainants argue that the record establishes a decade-long course of secretive dealing that clearly confers on
PAC rights and privileges and concurrently excludes others from enjoying or exercising similar rights by
withholding all opportunity for others to meaningfully engage in the FBO selection, bidding, and planning
processes. The suspect dealings began with the confidential settlement agreement that obligated the County to
honor a right of first refusal.. .7158
In its defense of the right of first refusal, the County contends that granting a 30-year lease to PACBurrows for
redevelopment is not a granting of an exclusive right within the meaning of Grant Assurance 23 and disagrees
with the Complainants that such an action was aper se violation of Assurance 23. 15 The County asserts that
the FAA has recognized that it is reasonable to grant a tenant a long-term lease in return for capital investment
in the property. Skydance Helicopters, Inc. v. Sedona Oak-Creek Airport Authority and Yavapai County, Docket
No. 16-02-02, Directors Determination, 2003 WL I 1524500, at *23 (FAA March 7 , 2003)...l6 In Skydance,
the investment was $300,000, which FAA found warranted granting a 30-year lease Id.at *22-26. PAC is
investing about $33 million, on its site at the Airport. Such a substantial investment, which will result in
improvements that benefit the public, warranted entering into a long-term lease with PAC.61

FAA Exhibit I , Item 1, Attachment 10.
FAA Exhibit 1, Item 5, p. 7
FAA Exhibit 1, Item 5, p. 7, FAA Exhibit 1, Item 1, p. 4.
Is* FAA Exhibit 1, Item 8, p. 3.
I6O (Prospectivetenants considering a substantial investment in the airport generally seek a lease term sufficiently long to ensure that the
tenant gets not only a return ofits investment, but a return on its investment as well [emphasis added] Id).
FAA Exhibit 1, Item 7, p. 8-9.
25
The record shows that with regard to length of leases, the Countys policy states that to allow the County the
greatest flexibility in making land use decisions over time, lease terms are generally limited to the shortest term
possible.62When necessary, fixed-term leases are granted for the minimum number of years adequate to allow a
lessee to amortize, and receive a reasonable return on, the lessees investment in leasehold improvements.
Historically, Airports has granted one year of lease term for each $5,000 invested, per acre of leased land, with a
maximum term for aviation leases set at 30 years. Accordingly, to qualify for a 30-year term on a 5-acre parcel,
a lessee would have to invest $750,000 in approved leasehold improvements ($5,000 x 5 acres x 30 years =
$750,000). Leases where there is no investment by the lessee are usually kept on a month-to-month basis. The
$5,000 per acre, per year formula for determining the length of lease term is a minimum requirement. Virtually
all new projects constructed on County aviation land within the past ten years have exceeded this minimum
investment req~irement.~~
By providing these examples, the County attempts to show that a 30-year lease with
PACBurrows does not constitute the granting of an exclusive right.
The record establishes that the initial lease for the property to be for 28 years ( 1965-1993)lMand that the
Countys action against Burrows in 1993 165 effectively terminated that lease. The subsequent 1993 Settlement
Agreement66then became the basis for a new leasing arrangement that are collectively referred to in this case as
the PAC/Burrows leasehold. Therefore, the four operating leases executed in 2002, granting PACBurrows a
lease for 30 years in return for a $33 million investment, is not per se unreasonable.
In reviewing this case, the Director did not expect the County to refrain from entering into long-term leases.
The Director would agree with the County that providing long-term lease opportunities for one set of
commercial operators constructing hangars whde denying the same to another commercial operator desiring to
invest in hangar construction results in the constructive grant of an exclusive right to those operators given the
preferential long-term leases. 16
At first glance, the right of first refusal is the cause for the P A C B m o w lease awards. In response to the
allegations made by the Complainants, the County takes the position that the right of first refusal was included
as part of a Settlement Agreement that resolved all issues in the unlawful detainer action between the County
and PACBurrows, including PACBurrows claim for damages.68 In other words, the County argues that it was
a necessary step in settling the legal case at the time between the County and PACBurrows. Although the
Director has reviewed the reasons behind the 1993 Settlement Agreement and the fact that settlements dealing
with disputes between airport sponsors and tenants are not unusual, the granting of rights of first refusal are
generally inconsistent with applicable Federal obligations.
Having said this, the Director notes that the offer or a right of first refusal in this case was a means of
establishing a new leasing arrangement to gain a significant investment at the airport and settle a dispute. As
FAA Exhibit 1, Item 18, San Diego County Airports Leasing Practices.
Exhibit 1, Item 18, San Diego County Airports Leasing Practices, p. 2.
164 See Section V Background of this document.
FAA Exhibit 1, Item 5 , p. 7
16 FAA Exhibit 1, Item7, p. 9. The County adds in its defense, that since other FBOs at the Airport have 30-year leases, it could be
argued that failing to grant PAC a long-term lease for its investment would have constituted a grant of prohibited exclusive rights to other
FBOs at the Airport and that the FAA has acknowledged that [providing long-term lease opportunities for one set of commercial
operators constructing hangars while denying the same to another commercial operator desiring to invest in hangar construction results in
the constructive grant of an exclusive right to those operators given the preferential long-term leases. FAA Exhibit 1, Item 7, p. 9.
FAA Exhibit 1, Item 5 , p. 11. The October 27,2004 PAC/Burrows memorandum, submitted as an exhibit to its Answer by the
County, states that that the history of the settlement between Burrows and the County, which granted Burrows or its successor a right of
first refusal to redevelop the leasehold in question is factually misstated in the complaint. The underlying dispute between the County and
Burrows included Burrows allegation that it became impossible for Burrows to perform capital improvements that would have increased
the term of the lease up to twenty-seven years because of a discrepancy in the legal description of the parcel. Specifically, the Burrows
lease required Burrows to redevelop the leasehold over a three-year period commencing in August 1, 1990. Unfortunately,the lease
contained errors in the property lines of the leasehold estate. It took the County two years to correct this error, during which time, it
became impossible for Burrows to finance the leasehold improvements because it could not obtain title insurance. The matter was finally
resolved through Alternative Dispute Resolution. d.
163FAA
26
noted in the Sedona case, at 29, tenants considering a substantial investment in the airport generally seek a lease
term sufficiently long to ensure that the tenant gets not only a Return ofinvestment, but a Return on its
investment. In this case, the right of first refusal was employed at the beginning of the lease term and was
limited to one property and not a majority of the airports properties that would have manifested the granting of
an exclusive right.I6 In this particular case, the right of first refusal to redevelop an existing leasehold as part of
the 1993 Settlement Agreement, achieved a much more limited effect. Since the Settlement Agreement was not
an operating lease, but rather an agreement to enter into a leasing arrangement, the right of first refusal only
gave PACBurrows the ability to enter into a lease with the County. Somethingthe two parties, through
negotiation or any number of other means, could have agreed to in 1993. Effectively, the 1993 Settlement
Agreement and the right of first refusal only delayed the leasing agreements the two parties entered into. It was
the method the parties selected to settle and assure the County that the property would be redeveloped if
PAC/Burrows would not perform.
The record clearly shows that the FAA warned the County that the 1993 Settlement Agreement and the right of
first refusal may result in allegations of violations of the grant assurances, including Grant Assurance 23,
Exclusive Rights. However, the Director finds, the right of first refha1 in this case, does not grant an exclusive
right contrary to Grant assurance 23.
Therefore, based on the above, the Director finds that the 30-year lease to PACBurrows, per se, is not an
exclusive right within the meaning of Grant Assurance 23 170 and that the right of first refusal in this particular
case, is not tantamount to granting of an exclusive right contrary to Grant assurance 23.
2.
Request for Proposal (RFP)
A review of the 1993 Settlement Agreement reveals that it made reference to the County issuing an RFP.I7l
The Settlement Agreement clearly states that while PACBurrows remains in possession of the premises, the
County is to complete its Phase 1 of the Master Plan update and prepare a Request for Proposal (RFP) for
development of the premises and that prior to the publication of the RFP the County will give PAC a right of
first refusal.172Nothing in the record suggests an RFP was ever issued in this case.173
In October 1995, the County responded to an inquiry challenging the Countys authority to grant the right of
first refusal and not issue an RFP for the ~ r 0 p e r t y .The
l ~ ~County took the position that under State law, it has
the authority to manage, sell, lease, or dispose of its property and that under County law, airport property offered
for lease does not have to be competitively bid. 175 The County has also stated that when the lease for
PACBurrows [was] approved by the Board of Supervisors.. ..the lease for the planned development [was]
presented to the public advisory group for Palomar Airport, the Palomar Airport Advisory Committee (PAAC)
twice, both in October and November of 2002, and went to the County Board of Supervisors (Board) in
December 2002. All three meetings complied with Brown Act [state of California] guidelines regarding public
notice and gave opportunities for the public to address the PAAC and the Board on this matter.176
The Complainants have stated that they do not object to the re-development of the airport center. Rather, they
support removal of dilapidated and outdated structures and re-development of the leasehold in a fashion
reasonably consistent with the 1997 Master Plan by a leaseholder selected in an open and fair manner.77The
Complainants also stated that to achieve a resolution to the matter that led to this Complaint, the Complainants
16 Skydance Helicopters, Inc. v. Sedona Oak-Creek Airport Authority and Yavapai County, Docket No. 16-02-02, Directors
Determination, 2003 WL I 1524500, at *23 (FAA March 7,2003)
I7O FAA Exhibit 1, Item 7, p. 7.
17 See FAA Exhibit 1, Item 1, Attachment 1, p 4.
17 FAA Exhibit 1, Item 1, Attachment 1, p. 4. A RFP is generally the first step in a competitive bidding process to obtain a contract
174 FAA Exhibit 1, Item 1, Exhibit 2, FAA Exhibit 1, Item 5, p.7.
175 FAA Exhibit 1, Item 1, Exhibit 2, p.2.
27
5.
Last Parcel of Land
The Complainants argue that the County has granted a 30-year lease to PAC/Burrows that involves the last
developable parcel of airport property, and that, as such, it is a to the violation of Grant Assurance 23, Exclusive
Rights.95The County refutes this by stating that the PAC/Bunows leasehold is not the last developable parcel
at the Airport and that it was already developed, and would have to be redeveloped. Other leaseholders have
developed their parcels, and some are in the process of undertaking redevelopment on them now. 96
Early in its review of this case, the FAA cautioned the County that the complicating factor at CRQ is that it
represents a right of first refusal for the last developable parcel and that the nature of the negotiations can be
construed as less than ideal because PAC/Burrows has a right of first refusal for the last developable parcel of
land at CRQ, opening the door to a perception that the County is perhaps granting an exclusive right.y197
In 2004
the County paved an additional area to add 37 new aircraft tie-down spaces on the west side of the airport, and
has received FAA approval to develop 84 additional tie-down spaces on a vacant parcel north of the runway,
and that these facilities have been or will be built to accommodate the light aircraft that Complainants say need
to be served by the Airport. They could not be built if the PAC site were truly the last parcel available for
aeronautical use.198In retrospect, it appears the FAA was misinformed as to the character of the leasehold wheq
it issued the warning to the County.
Upon review of the record, it is clear that the PAC/Burrows leasehold has been developed since at least 1965.
The PAC/Burrows leasehold does not represent an undeveloped parcel at CRQ, but rather the re-development of
one aviation parcel; on an airport that contains a number of other aviation parcels, some developed, and some
not. As such, it cannot be represented as the last developable parcel capable of accommodating aeronautical
activities. This is supported by the fact that additional unused property at the airport is in the process of being
developed to accommodate tie-downs.
The Director rejects the allegation that the County leased to PAC/Burrows the last parcel of developable
property at CRQ, and the contention that the leasehold conferred an exclusive right.
6.
Conclusion of Exclusive Rights
Based on the foregoing analysis and record presented, the Director finds the County has not granted an exclusive
right to PAC/Burrows or violated its Federal obligations under 49 USC 5 40103(e) and 49 U.S.C. 5 47107(a)(4).
D.
Issue 2 - Grant Assurance 22 - Economic Nondiscrimination
Whether the County, by its actions regarding the displacement of based aircraft, has violated Grant
Assurance 22, Economic Nondiscrimination, implementing the provisions of 49 USC 47107(a).
The Complainants argue that the PAC/Burrows leases result in the displacement of based aircraft and that such
an action constitutes a violation of Grant Assurance 22,Economic Nondiscriminati~n.~~
Grant Assurance 22,
implementing the provisions of 49 USC 47107(a)( I); (2); (3); (5) and (6), requires that the County make its
airport available to all types, lunds, and classes of aeronautical uses on reasonable terms and without unjust
discrimination. In other words, the Complainants argue that the County, as the airport sponsor, has not made
CRQ available to all types, kinds, and classes of aeronautical users on reasonable terms and without unjust
discrimination. In this Section, the Director reviews the Countys action vis-a-vis the PAC/Burrows leasehold
for compliance with Grant Assurance 22 with respect to reasonableness.
FAA Exhibit
Exhibit
19 FAA Exhibit
19 FAA Exhibit
99 FAA Exhibit
19
196 FAA
1, Item 1, p. 20.
1, Item 5 , p. 1 1 .
1, Item 7. p. 8, Footnote 4.
1, Item p. 1, 22.
30
Part 1 - Availability and Reasonableness

Complainants argue that County officials policy of not interfering with the business relationships of its master
leaseholders creates an unreasonable economic discrimination effectively denies airport access to a significant
class of the aviation community in violation of Grant Assurance 22. *O0 Specifically, the general aviation
businesses and their clientele will be economically denied access, and small aircraft owners, pilots, renters and
tenants will lose the ability to place their aircraft on the airport. 20
No documentation was submitted to the record that would demonstrate the County has limited the access of any
airport users for unrestricted operations at the airport. Complainants allegations are more accurately
characterized as to whether they have access to aircraft storage space under reasonable terms and conditions and
without unjust discrimination.
In defending its actions, the County asserts the economic nondiscrimination assurance relates to an airports
obligation to make the airport available without unjust discrimination to all types, kinds, and classes of
aeronautical users. Grant Assurance 22 does not guarantee any particular individual aeronautical user access to
the airport on whatever terms that user may desire.202As the FAA held in Santa Monica Airport Association v.
City of Santa Monica, FAA Docket 16-99-21 Final Decision and Order (Feb. 4,2003), a sponsor is not
required to develop any and all parcels of land in a manner consistent with the wishes of any one party, but
rather may exercise [its] proprietary rights and powers to develop and administer the Airports land in a manner
consistent with the publics interest and that is exactly what the County is doing at CRQ consistent with its
FAA-approved Airport Layout Plan. *03
The County asserts that Grant Assurance 22 does not prevent it, as the airport sponsor, from developing
facilities for new or different markets. 204 And that the Complainants are not being asked to pay more than
others will pay for comparable facilities. They have been and will be offered the same rates as any other tenant
for the facilities in question or for any other facilities at the
In reviewing the numerous alleged arguments, and to ascertain whether the County has made CRQ available to
the public on reasonable or discriminating terms, the Director reviewed several related issues and arguments.
These were (1) the role of the 1997 Master Plan in the Countys decisions, (2) the actions taken by the County in
accommodating displaced aircraft, and (3) the assessment of the rental charges for new facilities on the
PAC/Burrows site.
1.
The Role of the 1997 Airport Master Plan
Airport planning is a systematic process utilizing established guidelines to plan for the development of an airport
that reflects local, state and national interests. A key objective of airport planning is to ensure an effective
airport design that satisfies aviation demand in a financially feasible manner. Airport planning may be as broad
based as a national system plan or a more locally focused Airport Master Plan (MP) for a specific airport. As
such, the FAA recognizes that the County, as the sponsor of CRQ, can identify the airport MP for CRQ as a
representation of the airports blueprint for long-term development.

02 FAA Exhibit I , Item 7, p. 1 1.
03 FAA Exhibit I , Item 7, p. I 1.
04 FAA Exhibit 1, Item 7, p. 12. County sites Ashton 11, Final Decision and Order, 2000 WL 1387887 (FAA July 3. 2000) (dismissing
complaint where complainant claimed that the City of Concord attempted to keep out certain aircraft and small aviation businesses and to
attract wealthy owners of expensive aircraft) and that as defined by the FAA, economic discrimination prohibits disparate treatment of
similarly situated aeronautical users.
05 FAA Exhibit 1, item 7, p. 12.
O0
31
In December 1997, the County published an Airport Master Plan (Master Plan or MP) for CRQ.206The MP,,
addressed many airport-planning issues, including the accommodation of air camers, commercial operators, and
general aviation. In addition, the MP inventoried existing conditions, forecast future activity and facility
requirements, evaluated alternative development considerations as well as financial, economic and
environmental con~iderations.~~
The Complainants challenge that the MP and the PAC/Burrows development
unreasonably relied in part on the need to accommodate growing corporate jet activity.208Complainants imply
that Countys development plans discriminate against certain airport users in that accessibility through the
leaseholds is reduced for certain aircraft.
The County argues that the area near the Airport is home to many corporate headquarters and other entities that
are making increased use of corporate jets, a growing segment of general aviation...209Accommodating the
corporatejet segment of general aviation is a responsible way of managing the Countys airport system.210In
other words, the 1997 MP demonstrated the County sought to accommodate business jets at CRQ as well as
smaller aircraft types.21
The MP reflects a balanced mix of aeronautical facilities at CRQ to accommodate an ever-increasing number of
commercial, general aviation, and military operations well into the 20 15 forecast timeframe.212The table below,
as Figure 5 below, represents the forecast for all types of civilian aircraft operations reflected in 1997 MP for
CRQ. It shows that the two categories that better represent small single-engine piston aircraft and corporatejet
operations, namely, General Aviation and Air Taxi, show a similar growth rate of about 20%213
into the 2015
timeframe forecast.
Annual Itinerant Operations
Corrmcml
ii r laxi
Mil :aT
E. 53L
8 182
5 653
10 484
12 683
4.546
15 145
15 r2E.
2830
f4 203
247,117
280C
2803
i3.230
!f6,5#Cl
I /a OE
260,628
2.809
Annual Local Operations
Gcncrai i!vlatl3n
Mil :ary
Total AnnualOperations
~
275395
289,110
~~
Figure 5 - 1997 Master Plan Forecast at CRQ. Source: FAA Exhibit 1, Item 17, p. 1-12.
FAA Exhibit 1, Item 1, p. 4-5, FAA Exhibit 1, Item 5, p.8.

FAA Exhibit 1, Item 1, Attachment 3,I-1 - 1-3.
210 FAA Exhibit 1, Item 7, p. 3-4.
211 FAA Exhibit 1, Item 7, p. 5
212 FAA Exhibit 1, Item 17, p. 1-12,
213 The ratio between 12,683 Air Taxi operations in 2000 and 15,726 in 2015 is approximately 20%. The same holds true for the General
Aviation operations between in 2001 (150,800) and 2015 (182,000).
06
07
32
The record reveals an increase in all operations well into the forecast year of 2015.14 Figure 6 above provides a
depiction of the break down of GA operations at CRQ. The data shows that turboprop and jet aircraft, the types
mostly used in corporate aviation, conducts approximately 44% of GA operations at CRQ.15 These data
contradict the argument that there is no justification to provide new facilities for corporate jet operations at CRQ
since corporate operations at CRQ are as important as small piston GA operations. *16
The September 14,2004 PAC/Burrows general layout of the project reveals that the existing leasehold would be
significantly altered by the proposed construction. 17 It shows that the project is composed of four major
elements, including hangars and tie-downs for small piston aircraft, corporate type hangars for large turboprops
and jets, vehicular parlung facilities and aircraft ramp space, and administrative space and roadway facilities.
The facility PAC/Burrowsproposed appears to balance the needs of GA aeronautical users, including corporate
and small piston aircraft operations. The layout of the PACBurrows facility does not allocate much more space
for corporate facilities as it does for smaller GA operations. The ratio of space allocated to these two types of
GA operations is approximately 48% for corporate operations and 52% for small piston operations.218Therefore,
the record does not substantiate the Complainants allegations the PAC/Burrows plan for the construction of 19
Although the information in this table is a fleet mix forecast (2003 -2013) from a noise modeling analysis, it still is reasonably
re resentative data of the mix of aircraft that are using CRQ.
See FAA Exhibit 1, Item 17, p. 1-27. The aircraft types classified as turboprops and jets are: CL600, CAN441, CNASOO, CNA750,
FAL20, GIIB, GIV, GV, IA1125, LEAR25, LEAR35 and MU3001, for a total of44%.
See FAA Exhibit 1, Item 9, p. 5.
217 See FAA Exhibit 1, Item 5 , Attachment 7, PAC Overall Project Master Site Plan, September 15,2004.
218 These figures are approximations. The total area in question was estimated to be 175 units. The area allocated to small piston GA was
estimated at 91 units and the area allocated for corporate operations was estimated to be 84 units, hence 52% (91x100/175) and 48%
(84x100/175)respectively. The Director does not assume that the area allocated to small piston GA is actually greater than the area
assigned to corporate operations. The number indicates that the size of the areas allocated to both types is very similar in square footage.
214
33
large business jet hangars is accomplished at the expense of virtually all of the light general aviation aircraft
within the leasehold29or that any user is denied access to the airport.
Stating that the new jet center is achieved at the expense of light aircraft at CRQ is not in the pubic interest
is a decision left to the County as the airport sponsor based on reasonable planning documentation such as the
1997 MP, in addition to other factors affecting aeronautical demand and services at CRQ. Statements that
PACBurrows plan to convert their tie-down accommodations in order to facilitate a few large hangars to
accommodate a new more lucrative corporate jet customer market221is not, per se, grounds for a violation of
the grant assurances. This is supported by the fact the proposed new facilities will accommodates both types of
GA operations, albeit not in the ratio the Complainants would expects, i.e. accommodating all existing small
piston aircraft types. One class of aeronautical user cannot expect to indefinitely lay claim to airport facilities at
the expense of another class of aeronautical users or jeopardize the airports ability to manage its facilities.
The County states, the facilities that Complainants leased on a month-to-month basis on the PAC site were old,
substandard buildings that long ago exceeded their usehl lives. Built in approximately 1965, they did not meet
current code requirements and were structurally suspect and that in a report on a State inventory and permit
compliance inspection of the Airport conducted on August 3 1,2004, the California Department of
Transportation, Division of Aeronautics, urged among others that the County replace these buildings and to
pursue projects on the airport to replace older decaying and collapsing hangars.. . *
The PACA3urrows improvements have been described in the aviation media as new metal hangars with electric
lift doors, fire sprinkler and security systems, and treated floors. Additional waterlines will be installed and
utilities will be placed underground. Rent for the new buildings, obviously, will be more than tenants paid for
the old ones.223The record shows that on October 1,2004, the California Department of Transportation
(Caltrans) wrote to the County that Caltrans welcomed projects at the airport to replace older decaying and
Figure 7 - One of the decaying T-hangars at CRQ. (Source: FAA Exhibit 1, Item 5, Attachment 16).
FAA Exhibit 1, Item 1, p. 7 .

222 FAA Exhibit 1, Item 7 , p. 4.
223 See FAA Exhibit 1, Item 19.
219
220
34
collapsing hangars, relocate the primary airport restaurant.. .224 Caltrans observations are supported by
evidence in the record, in this case photographs, as shown in Figure 7 above. Actions by the sponsor to replace
airport facilities that have reached the end of their useful lives is consistent with the provisions of Grant
Assurance 19, Operation and Maintenance. Grant Assurance 19 requires, in part, that the County ensure that
the airport and all related aeronautical facilities are operated at all times in a safe and serviceable condition. This
includes aircraft storage facilities.
The threshold for assessing an alleged compliance violation lies with the Countys action in reasonably
accommodating the demand for all types and classes or aeronautical users. The County, as the airport sponsor,
may accommodate the needs of the small piston aircraft operators in any variety of means and is not restricted to
only the PACBurrows leasehold. That is, some small piston aircraft operators may be accommodated on other
leaseholds at CRQ or other County airports. There is no Federal requirement that all existing tenants on the
existing PACBurrows leasehold must be accommodated in the future PACBurrows facility.
The Director recognizes that the current MP for CRQ, as the Countys vision for the future of the airport,
plays a role in its decision-making process, and for development of the airport. Having said that, the Director
also notes that deviating from the MP, to accommodate changing airport conditions or new requirements, is not
only permissible, but may be necessary and expected.
Therefore, based on the record and analysis presented above, the Director finds that the Countys action in
replacing certain substandard facilities with newer ones, even if it results in the relocation of some tenants in
those substandard facilities is not inconsistent with the Countys Federal obligations and in addressing the future
needs of all classes of aeronautical users, the County is acting in a reasonable manner in meeting its
responsibilities as an airport sponsor.
2.
Actions to Accommodate Existing Small Aircraft
One of the complainants key allegations is that the proposed PACBurrows development has resulted in a large
number of displaced general aviation (GA) aircraft and, as such, constitutes a violation of Grant Assurance 22,
Economic Nondiscrimination, on the part of the County.225Specifically, the Complainants argue that the
displacement of 150 light general aviation aircraft and related businesses to make way for 19 new jet hangars
constitutes prohibited economic discrimination in violation of Assurance 22 and that the proposed development
unreasonably discriminates against two classes of general aviation users: general aviation businesses and their
clientele who will be economically denied access and small aircraft owners, pilots, renters and tenants who will
lose the ability to place their aircraft on the airport.226
Complainants focus on the number of displaced aircraft and challenge the number of impacted aircraft advanced
by the County. For example, the Complainants argue that the County claims that only 33 aircraft will need to
relocate temporarily to other airports is erroneous and misleading and that by the Countys own admission
in Countys letter of October 2,2003 to the FAA, the actual number of displaced aircraft is significantly more.
The Respondent [County] now asserts that 47 aircraft will be accommodated on the leasehold. We agree that
when completed, there will be 19 jet hangars and 28 tie-downs (47 total).y7227
The Complainants provide data claiming it shows the difference in available spaces in a post-development
scenario compared to a pre-development one. It is argued by the Complainants that a pre-development scenario
includes 1 medium maintenance hangar, 3 small maintenance hangars, 1 medium sightseeing operator hangar,
122 tie-downs (includes 12 rented back by the County for transient parking) and 30 small T-hangars for piston
singledlight twins, for a total of 157 spaces. The post-development scenario, the Complainants argue, provides
FAA Exhibit
FAA Exhibit
226 FAA Exhibit
227 FAA Exhibit
224
225

1, Item 1, p. 1.
1, Item 1, p. 22.
1, Item 8, p. 5.
35
for 5 large hangars, 14 medium hangars for business jets or a maintenance facility, 28 tie-downs, and 11 new
small hangars, for a total 47 spaces, with 28 providing storage for piston singlehight twins.228
In response to these various allegations regarding the number of displaced aircraft, the County asserts that
while the Complainants quibble about the exact number of aircraft that may be displaced based upon an
undisclosed informal census, it is undisputed that before and after development of the PAC site, the Airport
will have abundant capacity for the storage of piston-driven GA aircraft and that during construction, the Airport
is making efforts to accommodate aircraft owners who must be displaced.229
In an October 2,2003, letter to the FAA, the County submitted layout exhibits of the proposed PAC/Burrows
temporary tie-down location. 230 In this letter, the County recognizes that as a result of the PAC/Burrows
development proposal, there will be a loss of tie-down space for general aviation aircraft, and that general
aviation current tie-down positions at available leaseholds will be significantly reduced and that there may be
in the neighborhood of two hundred (200) lost tie-down locations when these master lessees begin their
development projects early next summer.231On November 21,2003, the Palomar Airport Advisory Committee
(PAAC) held a public meeting. At the meeting, PACBurrows representatives stated that they were working
with the County to try to obtain temporary facilities for everyone and try to place hangar and tie-downs
customers, if possible, in adjacent areas or on other airports but admitted that there is not room for everyone
under this plan but that there will be tie-downs and general aviation hangars available to the public on the PAC
leasehold.232
The Director agrees that the number of displaced aircraft is relevant in this case even though the parties to this
Complaint do not agree on the exact number. 233 The reason the number is important is because the Countys
ability to accommodate displaced aircraft diminishes as the number increases. Although, as mentioned above,
there might be some argument as to the actual number of displaced aircraft, the record does show that the
County has recognized, albeit a little late in the process, that there would be an impact on small aircraft at
CRQ.234
The Countys position that it has taken steps towards accommodating aircraft and aircraft owners that are
impacted by the PACBurrows-related construction at the airport is also illustrated by the Countys Web site. 235
The Web site provides guidance and information to airport users on the Voluntary Aircraft Storage Relocation
Program (VSRP), associated forms, and the availability of tie-down spaces within the County.
FAA Exhibit 1, Item 8, p. 5. The Complainants add that the Countys statements that 102 aircraft were given notices to vacate ignores
a number of recipients that have responsibility for multiple aircraft, hence the difference between 102 notified and the 157 actual
impacted, as presented by the Complainants. FAA Exhibit 1, Item 8, p. 5. The Complainants conclude that as a result of the PAC
development there is a net loss of 124 storage spaces for piston singledlight twins, of which 30 were permanent hangars and that the
new County tie-down ramp at the West end can accommodate 37 (12 transient and 25 permanent spaces), leaving 87 aircraft which are
displaced. FAA Exhibit 1, Item 8, p. 6.
229 FAA Exhibit 1, Item 10, p. 3, Footnote 4. In October 2003, the County recognized that Palomar Airport is currently built out and
appears politically landlocked with respect to expansion into the City of Carlsbad (the Permitting City authority). FAA Exhibit 1, Item
1, Attachment 18. The County also states at most, this case involves the temporary displacement of a few dozen aircraft from facilities
on the Palomar Airport Center (PAC) site that may not be accommodated at the PAC site or at other sites at the Airport during
reconstruction.FAA Exhibit 1, Item 7, p. 4. The County states that of the 102 aircraft for whom notices to vacate were provided to
their owners by PAC, 47 have been accommodated on the PAC site and 22 have been relocated elsewhere on the airport, leaving only 33
to be relocated off site. FAA Exhibit 1, Item 7, p. 6. Also see FAA Exhibit 1, Item, Attachment 1.
230 FAA Exhibit 1, Item 1, Attachment 18. This was done to ascertain whether any airport standards would change as a result of the
implementation of the development proposal that would adversely affect either the airport or airport users. FAA Exhibit 1, Item 1,
Attachment 18.
233 On August 3, 2004, PAC wrote the County on matters regarding the PAC leasehold. In its letter, PAC states that a total of 124 aircraft
were impacted by the notice to vacate, that the number of temporary spaces available is 34 and that the new number of displaced aircraft
is 90. FAA Exhibit 1, Item 1, Attachment 38. Complainants believe the numbers to be between 90 to 150 aircraft. Exhibit 1, Item 1, p.
18. Complainants also argue that the number can be 87, see FAA Exhibit 1, Item 8, p. 6. Also see FAA Exhibit 1, Item 1, Attachment 20.
228
235
FAA Exhibit 1 , Item 5, p. 13.
36
The Web site also addresses the CRQ Voluntary Storage Relocation Program236in the form of a memorandum
to aircraft owners occupying tie-down spaces at CRQ along with a related relocation form appli~ation~~
and a
listing of all available tie-down space at other County owned and operated airports. 238 In explaining the VSRP,
the County provided in its October 25,2004 memorandum to aircraft owners, information such as the design
and construction of the North side aircraft parkmg ramp, alternative location, and the incentive program.239
The record shows that on August 4, 2004, the County held a meeting for airport tenants. At the meeting, the
County described the availability of 103 alternative tie-downs and hangar spaces at other County airports, except
for Borrego Valley Airp01-t.~ A review of the Countys hangar and tie-down availability table for three other
County airports, Gillespie Field, Ramona Airport, and Fallbrook Airpark, showed among all service providers a
total of 163 hangars and tie-down spaces at these three airports from September 2004 to January 2005.241
The County adds that it wishes to be proactive in our attempts to provide as many tie-down alternatives as
possible to help soften the effects of this loss of aircraft parking and that our objective in respect to the
temporary tie-down location is to give the airport time to possibly acquire additional lots for automobile
parking, thereby freeing up additional onsite tie-down space. This period would also afford the affected GA
pilots time to find alternate locations at other airports. In addition, it will allow us time to develop incentive
packages to encourage aircraft owners to willingly relocate. 242
In fairness to the arguments presented by the Complainants and the County , the Director notes that some of the
airports advanced as able to accommodate some of the displaced aircraft, especially Gillespie and Ramona, are
located approximately one hours driving time from CRQ, and may not be convenient for some displaced
tenants. The excerpt of the aeronautical chart shown in Figure 8 below provides a visual depiction of the airports
located near San Diego and those owned and operated by the County as well as the distance between Fallbrook,
Ramona, and Gillespie, and CRQ.

238 FAA Exhibit 1, Item 16.
239 FAA Exhibit 1, Item 16. In its memorandum (October 25,2004), the County stated: in order to resolve the immediate short-term
overcrowding problem during construction of this ramp and other projects, County Airports is initiating a voluntary aircraft storage
relocation program available to persons who currently store their aircraft in tie-down spaces at McClelland-PalomarAirport. As an
incentive for aircraft owners to temporarily relocate their aircraft to Fallbrook Airpark, Gillespie Field, or Ramona Airport, County
Airports is prepared to offer free rent on County tie-down ramps at these locations for a period of two (2) years for any aircraft relocated
there from McClellan-Palomar Airport. Those electing to take part inlhis program will maintain their place on a waiting list for both the
North side and West-end tie-down ramps at McClellan-PalomarAirport. There are a limited number of County tie-down spaces
available for this two-year relocation program: Five (5) at Fallbrook Airpark; Twenty (20) at Gillespie Field; and Ten (10) at Ramona
Airport. These spaces are available on a first-come, first-served basis, to eligible participants only. Those who are interested in
participating in this program are asked to complete the attached application and forward a copy to County Airports as early as possible.
This offer shall also apply to any aircraft proved to Countys satisfaction to have relocated from McClellan- Palomar Airport to another
County Airport within the past two months, due to a lack of storage capacity at McClellan-Palomar Airport. ...Spaces include the far
west end of the airport and 84 proposed spaces on the North side of the runway. Aircraft operators presently on the airport who have
received eviction notices from an FBO will take priority over operatordowners who are new to the airport. See FAA Exhibit 1 Item 16
Including space at other FBOs at CRQ and at the other airports
and h~://www.co.san-dieao.ca.us/dvw/ai~orts/mcval.html#Location.
in the County as a solution to the task of accommodating displaced aircraft is consistent with the Countys attempt to accommodate
displaced aircraft and meet its statutory obligation to provide for reasonable access. As of August 2004, the County represents that 76
tie-downs were available at other County-owned airports (14 tie-downs at Fallbrook Airport; 25 tie-downs were available at Gillespie
Field; and 37 tie-downs were available at Ramona Airport). In addition, the following hangar spots have been or will soon be available:
19 shade shelters and 19 T-hangars at Fallbrook Airpark as of September 1,2004, and 33 spots in hangars at Gillespie Field (20 available
as of January 1,2005). FAA Exhibit 1, Item 7, p. 6-7.
241 FAA Exhibit 1, Item 1, Attachment 40, FAA Exhibit 1, Item 16.
236
237
37
Figure 8 - This excerpt of an aeronautical chart depicts the four related County airports; McClellandPalomar, Fallbrook, Ramona and Gillespie. For reference, the distance between CRQ and Ramona, to the
Southeast and on the right side of the chart, is approximately 22 statute miles. (Source: FAA)
The Countys plans to accommodate displaced aircraft is also illustrated by documentation related to
PACBurrows concerns for the existing tenants. The record shows that on October 3,2003, PACBurrows
wrote to the County on the issue of accommodating displaced aircraft a long-standing issue has been OUT
request for additional area to accommodate our tie-down customers.243This letter suggests that PAC/Burrows
requested (from the County) additional property to accommodate impacted users. Countering the County, the
Complainants argue this would not have been a problem if the County and PAC had pursued the redevelopment in three phases as originally represented. Displaced aircraft could simply be housed on non-active
portions of the PAC leasehold while other phases were completed. .... As a result, most of the Burrows-based
FAA Exhibit 1, Item 1, Attachment 19. The letter also stated that PAC/Burrows had forwarded proposals for the development of
alternative space in several locations at Palomar, whether that space was to be master leased to our company [PAC], another company or
was to be operated directly by the County.We want to stress the urgency of developing such space as soon as possible, whoever may be
chosen as the operator. We feel that our various proposals all had merit and that the needs of our current tie-down customers should be
looked to, irrespective of the undeniable trend towards commercial and jet aviation.FAA Exhibit 1, Item 1, Attachment 19.
243
38
light aircraft, including mine, have been forced to leave the leasehold and the airport for 2 years .... Even when
the North side tie-downs are complete, the light aircraft owners and users will be forced to house their aircraft in
the elements and deal with poor vehicle parking and difficult access to the airport
The Director recognizes that some of the displaced aircraft owners will be inconvenienced. However, the fact
that there will be some inconvenience due to a temporary relocation to other airports or other locations at CRQ,
does not, per se, reach the level where it is an unreasonable term or condition being imposed by the County on
airport users. Furthermore, the Director points out that PAC/Burrows is not the sponsor; the County is.
Although there is disagreement on the number of impacted users, the number of available replacement locations,
PAC/Burrows ability to handle the development, and the historic number of available hangars, it is the
Countys responsibility, as the airport sponsor, to accommodate aeronautical users.
It appears Complainant Pacific Coast Flyers 14 aircraft have been relocated, on a temporary basis, to another
site on the PAC parcel that is available for nine months, until a longer term solution is found; that the pilots
shop of Complainant Donnya Daubney has been relocated from the PAC site to another FBO site on airport; and
that Complainant Roger Baker with interests in several aircraft at the airport.. . has relocated to two of the 37
new tie-downs created by the County at the west end of the Airport.. . and that he also had two personal
aircraft, which the County believes he has relocated to Ramona Airport, another County facility.245
The threshold for assessing a compliance violation for Grant Assurance 22 lies in the Countys ability to
reasonably accommodate aeronautical users at the airport. The record of evidence indicates that the County has,
since 2003, been involved in dealing with both subtenants and PAC/Burrows in attempting to accommodate as
many of PAC/Burrows displaced aeronautical users as possible. Even though there are differences between the
parties as the exact number of displaced aircraft, and to some extent as to the number of available replacement
hangars and tie-down spaces, the Director finds ample evidence that the County did provide reasonable access to
a majority of the displaced aeronautical users at either CRQ or other County owned airports.
Therefore, based on the above, the Director finds that the County has acted reasonably and therefore without
discrimination as the record suggests several concrete steps have been made towards accommodating as many
displaced aeronautical users as possible that were impacted by the proposed PAC/Burrows development at
CRQ.
3.
Assessment of the Rental Charges for New PACBurrows Facilities
The Countys obligation to make CRQ available for public use on reasonable terms and without unjust
discrimination can also be reflected by the rents imposed by those providing services on behalf of the County to
the public.
In a broader sense, the FAA Policy on Rates and Charges expounded the requirements to be followed by airport
sponsors when establishing airport rates and charges. 246 That is, rates, fees, rentals, landing fees, and other
244 FAA Exhibit 1, Item 9, p. 4.Complainants allegation that the County has allowed PAC to save itself a reported $1 million by
performing the entire re-development in one phase is unsubstantiated. Even it were, we note that the County does have the right to work
with a developer in setting out timelines for construction and development, and that nothing contained in the record would allow this type
or argument to reach a level that would show or imply a violation of the Countys Federal obligations. As for the issue of 2 years period,
the Director is familiar with time lines necessary to accommodate major airport development projects and the PAC/Burrows project and
the North side project is not excessive, unreasonable or otherwise unrealistic.
246 See 61 Fed. Reg. 31994.; h~://WWW.faa.gov/a~/pdftxt/ratesl.htm.
Note: The United States Court of Appeals for the District of
Columbia vacated and remanded portions of this. See Air Transport Association of America v. Department of Transportation (m
v. DOT), 119 F.3d 38 (D.C. Cir. 1997), amended 129 F. 3d 625. Specifically,the Court vacated: paragraphs 2.4,2.4.1,2.4.1 (a),
2.5.1,2.5.l(a), 2.5.l(b), 2.5.l(c), 2.5.l(d), 2.5.l(e), 2.5.3, 2.5.3(a), 2.6, the Secretarys supportingdiscussion inthe preamble, and
any other portions of the rule necessarily implicated by the holding of the August I , 1997 opinion. Consequently, today we will only
use those valid portions of the Final Policy that were not vacated.
39
service charges imposed on aeronautical users for the use of airport facilities must be fair and reasonable247and
may not unjustly discriminate against aeronautical users or user groups.248This is also the standard that applies
in this case. More specifically, the County carries the responsibility to ensure that the fees and charges imposed
on aeronautical users of CRQ by the County and by its commercial aeronautical service providers and
developers, such as PACBurrows, comply with applicable Federal law and FAA policy.
Although the setting of rates and charges is generally best addressed by agreement between aeronautical users
and airportsT9under the FAA Policy on Rates and Charges (P0licy),2~the County must ensure that reasonable,
consistent, and transparent (i.e., clear and fully justified) methods are used in establishing the fee structure
assessed on airport u~ers.~
This means that the County shall ensure that aeronautical service providers and
developers acting on behalf of the County assess fees for the use of the airport that are reasonable and not
unjustly discriminatory when applied to similar users and/or facilities.
To ascertain whether the rates and charges at CRQ are consistent with the grant assurances and FAA Policy, the
Director assessed the PACBurrows proposed Pre-paid lease and Short-term lease and the net changes to lease
rates for displaced tenants. In the following pages, the Director assesses the impact of the PACBurrows project
on rates and charges for compliance with Grant Assurance 22 with respect to reasonableness. Compliance with
the unjust discrimination requirements was addressed in Part 2 of this Section.
a.
Proposed Pre-Paid Lease
The issue of whether aeronautical fees imposed at CRQ are reasonable is dependent on the assessment of several
factors, including the proposed pre-paid lease252being offered by PAC/Burrows to its tenants. The pre-paid lease
is one of the methods by which PACBurrows and hence the County, would make CRQ facilities available to
aeronautical users.
In this case, the Complainants argued that PACBurrows delivered proposals to several businesses and potential
jet hangar tenants in June 2004. It is claimed by the Complainants that these proposals were actually pre-paid,
26-year leases of a hangar shell for roughly $235 per square foot and that in addition to paying to purchase, the
proposal added an estimated monthly cost of $.47 per foot as Triple Net fees.253In the case of Complainant
Donnya Daubney, the Complaint states that PACBurrows proposed to lease 4,919 square feet for approximately
26 years and that the amount to be pre-paid was valued as $1,155,965.254
Complainant Donnya Daubney, was asked to come up with nonrefundable deposits of $346,788 just to preserve
a lease she could not enjoy until construction is complete. 255 When complete, the Complaint continues,
241
See Paragraph 2 (no decimal place) of the Policy, found at 61 Fed. Reg. 31994,32019; h~://www.faa.pov/~/Ddftxt/ratesl.htm.
see
also 49 U.S.C. 0 47107(a)(l).
248
See Paragraph 3 (no decimal place) of the Policy, found at 61 Fed. Reg. 31994,32021; h~://www.faa.gov/~/Ddftxt/ratesl
.htm, see
also 49 U.S.C. Q 47107(a)(l).
249 See Page 32017 of the Policy, found at 61 Fed Reg. 3 1994,32021; http://www.faa.gov/arp/pdftxt/ratesl.htm.
250 Section 2.3 of the FAA Policy on Rates and Charges (Policy). Also see Section G of this decision.
251 Relevant to this case is that the Grant Assurance 22 does not prevent a sponsor from making reasonable distinctions among
aeronautical users and assessing higher fees on certain categories of aeronautical users based on those distinctions. Sponsors must
allocate costs to their aeronautical users by a transparent, reasonable, and not unjustly discriminatory rate-setting methodology. They
must apply the methodology consistently, and when practical, they must quantitatively determine cost differences. So that aeronautical
users or user groups pay only properly allocated costs, sponsors must allocate common costs (costs not directly attributable to a specific
user group or cost center) according to a consistently applied, reasonable, transparent, and not unjustly discriminatory cost-allocation
methodology.
252 A pre-paid lease is a lease where rent is paid in advance. The pre-paid rent would be the present value of the periodic rent payments
owed over the lease term. Future rent payments would be discounted at the appropriate market discount rate to calculate the present
value.
253 FAA Exhibit 1, Item 1, p. 23. A Triple Net lease is a lease where the lessee pays rent to the entity leasing the property as well as
taxes, insurance, and other expenses that may be related to the property in question.
40
. ..Daubney will have to then pay a final non-refundable deposit of $809,172 or lose all prior
Finally, Complainants argue that PACs proposal in this case creates several unreasonable terms such as the
improbability of obtaining financing, the impossible monthly burden and outrageous nature of certain other
terms.257The Complainants also state that even if Complainant would agree to pay PACs rates, the combined
agreements present an economic model that is so outrageous that it would be impractical for even the most
affluent tenant.y1258
In other words, Complainants argue that the pre-paid nonrefundable lease option being
offered by PAC/Burrows is unreasonable.
In response to Complainants statements that lenders have told claimants counsel if one could obtain financing,
rates would be more than 12%, the County again put forth the PAC memorandum of October 27,2004. In it,
PAC states the Complaint speculates that Complainant would need to finance the $225 per square foot over the
life of the lease at an assumed annual rate of 12%. Of course, Complainant would not have to take a long-term
lease 259 and Complainant could sign up for a five-year lease and have no financing costs. Moreover, tenants
with acceptable credit histories would likely be eligible for an SBA [Small Business Administration] loan or a
lower rate private loan. Currently, SBA loans are in the range of 6%. This would result in a monthly rate of
$1.10 per square foot for both principal and interest on a 25-year loan.26o
The County through the PACBurrows memorandum maintains that the Complaint estimates the total cost for
long-tern hangar tenants to be $2.93 per square foot per month. As demonstrated above, the actual number is
approximately $1.57 per square foot per month: $1.10 principal and interest on base rent + $.47 for triple net
expenses. The Complainant compares this number to the rental rate Complainant was paying for a substandard,
forty five year old hangar of $30 per square foot per month. Current rental rates at the airport for older, but
serviceable hangar space is running $1.25 and $1.60 per square foot based on the relative age of the structures
and the amenities offered. Nevertheless, a proper comparison would have to take into account the likely
increases in costs for other hangar space over the next thirty years. (The PAC rate is guaranteed for the full 30year term). Assuming an average rental increase of 3% per year over the life of a lease, a lease starting at $1S O
per square foot has an actual rental rate over the life of the lease of approximately $2.56 per square foot. Thus,
even accounting for financing costs, a prospective tenant may well find it cheaper to enter into a 30-year fixed
rate lease rather than a short-term lease.261

258 FAA Exhibit 1, Item 1, p. 24. Complainants adds that:
0 No element of the combined agreements provides any asset to the tenant that could be used as collateral to finance execution of the
lease reservation or hangar lease or that could be shown on a balance sheet.
0 The prepaid lease amount is actually referred to as a reservation fee only, although it is characterized to the County as the total lease
fee. This characterization appears to be wholly disingenuous.
0 The substantial prepaid fees which include the reservation fee and the lease portion of the lessors obligation to the County are
wholly nonrefundable, even in the event of a default by the lessor.
0 Any event that causes termination of a tenants right to occupy the premises, including failure by the lessor to perform his (minimal)
duties under the agreements, results in unrecoverable forfeiture of all prepaid fees. See FAA Exhibit 1, Item 1, p. 24.
Complainants contend if a business were to accept the PAC proposal, it would need to obtain financing but that Complainantshave been
unable to find any lender willing to finance non-refundable deposits on a non-equity long term lease, with an unknown lessor-developer.
FAA Exhibit 1, Item 1, p. 24. Complainants states that lenders have told claimants counsel if one could obtain financing, rates would be
more than 12%. Effectively then, Ms. Daubney would need to secure a loan for the entire $1.2 Million, to be advanced over 2 years, or
risk the loss of the prior deposits. Lenders tell us that: a) Progress draws over such extended periods are unheard of in requests such as
these; b) the sub-sub land lease nature of the development reduces the financiability of the request; c) If available, approvals of loans like
this would typically take 60-90 days after submission of all required information; and d) Such financing would require detailed plans,
proof that the lessor has the ability to perform, and proof that the lessor has conducted the required environmental studies - none of which
has been provided by Mr. Sax [PAC representative]. In fact, the proposed Prepaid Lease places the burden of providing such
documentation on the lessee, Ms. Daubney. FAA Exhibit 1, Item 1, p. 24.
2s9 FAA Exhibit 1, Item 5, Attachment 1, p. 2.
260 FAA Exhibit 1, Item 5 , Attachment 1, p. 2. FAA notes that a $225 loan for a 25-year term at 6% results in a principal and interest
payment of $1.44.
256
257
41
With both these arguments, the County is in fact representing the proposed total lease costs associated with the
new facilities under the long-term lease option. Based on the review of the pre-paid lease option, it appears that
what PAC/Bumows has proposed, as a master tenant and with the Countys approval, is to have tenants in the
PAC/Burrows facility secure their own financing for the premises they lease instead of PAC/Burrows securing
long-term financing and then charging the tenants a rental that includes a debt service component.
As such, pre-paid leases can reflect a reasonable representation of the total cost of developing the new facilities;
a situation where the lessees (tenants) carry some of the financial risk for the premises they lease instead of the
lessor (PAC/Burrows). This is not necessarily unreasonable, although it may appear to be a nonstandard
practice to tenants accustomed to having the lessor carry the risk of the permanent financing.
Moreover, the record contains no documentation or information that the pre-paid lease terms offered to
displaced tenants are unreasonable or misleading. What the record shows is that this particular financing option,
in which the lessee cames the permanent financing for its leased premises instead of the lessor, is different than
a rental option, to which the Complainants may be accustomed.
The fact that PAC/Burrows chooses not to cany all of the financial risk and offers pre-paid leases for those
tenants seeking a longer term lease (i.e. 26 years) is not evidence that the prepaid option is unreasonable.
Therefore, based on the above, the Director finds that the terms of the pre-paid lease option are reasonable
within the meaning of Grant Assurance 22.
b.
Proposed Short Term Lease
As with the prepaid option discussed above, the issue of whether aeronautical fees imposed at CRQ are
reasonable also includes an assessment of the PAC/Burrows proposed short-term lease offer.
Complainants contend that PAC has purportedly offered to lease bare wall commercial space on a short-term
5-year basis with a base rent of $1.25 per square foot [per month] and an additional $.47 per foot expense
burden [per month]. Thus, the total monthly rent would be $1.72 per square foot, still more than double current
prevailing rates. This would, of course, not include improvements that the tenant would have to try to recover
over the 5-year term. If, in our example Ms. Daubney wished to install $50,000 of improvements financed over
5 years at 12%, she will incur an additional monthly debt of $1,220 or $.25 per foot. Thus, her total outlay for
space will be $9,690, or $1.97 per foot.262
In response, the County submitted information discussing this short-term lease in detail and stated that
concerning base rents and triple net costs, the Complaint accurately states that they are currently fixed at $1.72
per square foot per month. While this may be somewhat higher than rents charged by other FBOs at Palomar,
those other facilities are older, with fewer amenities. In fact, the next newest facility is approximately twenty
years old and does not offer amenities such as individual hangars or extra wide modem roll up doors. Using a
3% per year deflator for age, $1.72 per square foot for new hangar space is equivalent to paying $0.93 per
square foot for hangar space at the next newest hangar at the Airport, whch currently charges $1S O per square
foot. PAC also offers a tenant improvement credit of $30 per square foot for minimum leases of five years. (The
only requirement is that the tenant use a PAC approved contractor for the work. This is common in many such
leases because it insures continuity of workmanship and better pricing.) If a tenant enters into a 5-year lease for
a 1000 square foot office, the tenant would have a $30,000 credit against leasehold improvements to be built by
PACs ~ ~ n t r a ~ t o r . ~ ~ ~ ~
The Director concurs with the County that while the rate imposed by PAC/Bunows on its short-term lease may
be somewhat higher than that charged by other FBOs at CRQ, the other facilities are older. In other words,
263

42
differences in the lease rates for different facilities reasonably reflect a like difference in the age and condition
of the different facilities. The current base rent and triple net costs total $1.72 per square foot per month does
not appear to be unreasonable, or inconsistent with the FAAs Policy on Rates and Charges and Grant Assurance
22. The FAA accepts differences in lease rates between facilities because of differences in the location, age,
condition and utility of these facilities. The fact that PACBurrows also offers a tenant improvement credit of
$30 per square foot for leases of five years, adds to the reasonableness of the rate methodology.264
Therefore, based on the above, the Director finds that the terms of the PACBurrows short-term lease option is
reasonable within the meaning of Grant Assurance 22.
C.
Net Change in Lease Rates for Displaced Tenants
In arguing that the PACBurrows proposal constitutes a violation of Grant Assurance 22, Complainants provide
an example of how the increase in lease rates for displaced tenants is per se unreasonable. That is, Complainants
attempt to show the difference in their leasing costs if they remain on-site and accept a lease in the new
PACBurrows facilities. As compared to what they paid in the existing 40 year old facilities. It is argued that a
new PACBurrows 70x70 foot hangar, capable of accommodating 4 aircraft and leasing at $14,412.67 per
month, would cost each owner $3,603.75, and that this amount is excessive. Complainants also state that even
if PAC were to make the aircraft hangars available on the same terms as those proposed to the businesses, total
rent would be $8,460 per month and that thus each sharing owner would have to pay $2,115 per month. 265
The Complainants allege that as a result of the PACBurrows proposal, the current monthly rate would go from
approximately $500 per month to a proposed rate ranging from $2,115 to $3,603.266Complainants also assert
that in October 2003, PACBurrows publicly represented that rates for small aircraft would be roughly 30%
more than they were currently paying. 267 Had that been a true statement, the Complainants continued, users
would have the option to remain and pay the difference. The new pricing structure eliminates all reasonable
options and shuts the door to the community members who use, patronize and support general aviation at
CRQ.7268
The October 27,2004 PACBurrows memorandum states that today, the going price for hangars is between
$1.25 and $1.60 per square foot per month. Magellan [another FBO at CRQ] is the oldest and is charging about
$1.25. Jet Source is the newest and is charging about $1.60. On average, it takes about 1000 sq. R to hangar a
GA aircraft. Thus the going rate now at Palomar would be between $1,250 and $1,600 per month269and that
pricing for portable hangers is lower. These smaller facilities have no electrical or other utility services and so
they are not comparable to other hangar facilities. However, the PAC site includes 52 portable hangers
subleased to the Palomar Airport Pilots Association (PAPA).PAC has no direct involvement in rates charged
by PAPA. However, PAC understands that the smallest of these units currently rents for approximately $600 per
month which computes to $ 3 2 per square
The Complainants present the argument that their costs will increase from approximately $600 per month in an
existing 40-year-old hangar to between $2 115 to $3,603 per rnonthz7lin a new shared hangar in the
PACBurrows development and such an increase would be unreasonable. However, the 40-year-old facility that
reportedly contains no electricity or utility services are not comparable with the new full service facilities
proposed by PACBurrows or offered by other FBOs at CRQ. In order to strike such a comparison,
PACBurrows would need to be erecting new below standard hangars instead of the alternative, full service

FAA Exhibit 1, Item 1, p. 24-25.
271 The July 30,2004 study entitled Aeronautical Rental Rates at San Diego County Airports and discussed in detail under sub section
f ) provides a greater level of detail to these values. See FAA Exhibit 1, Item 18, p. 4.
264
265
43
design that is proposed for the PAC/Burrows development. In other words, PACBurrows would need to scale
the development down and essentially erect like-sized replacement facilities on the PACBurrows site.
The differences in the rental figures shown above reflect the age, location, condition and utility of two
completely different types of hangars. The FAA recognizes that the County, as the airport sponsor, has the
ability to enhance the facilities at the airport. It is also recognized that this enhancement would, in most
instances, result in an increase in fees or lease rates that would properly reflect the new level of investment
involved. There is nothing in the record that suggests the fees or lease rates imposed by PACBurrows are
inconsistent with the level of investment for the new facilities the County has agreed to pursue. Moreover, the
grant assurances and FAA Policy do not require the County to provide displaced tenants with the historic lower
rent structure they have enjoyed in older facilities or to replace those facilities with new ones of the exact size
and design that would be more economical and preferable to the Complainants.
Therefore, based on the above, the Director finds that the increase in lease rates and charges for the new
PACBurrows facilities are is not unreasonable, and as such, does not constitute a violation of Grant Assurance
22.
4.
Conclusion on Availability and Reasonableness
In assessing the reasonableness of the Countys actions with regards to the PACBurrows project, the Director
considered the Countys justification for approving the project to replace certain substandard facilities with
newer ones, the actions taken by the County in accommodating as many displaced aircraft as possible, and the
reasonableness of the structure of rates and charges on aeronautical users at CRQ. Therefore, based on the above
information and record, the Director finds that the County has not violated Grant Assurance 22, Economic
Nondiscrimination, implementing the provisions of 49 USC 47 107(a).
Part 2 - Unjust Discrimination

The Complainants must show that the current development of the PAC site unjustly discriminates against a class
of aeronautical users to sustain a claim that the County violated Grant Assurance 22 Economic
Nondiscrimination.
The County states that Grant Assurance 22 does not guarantee any particular individual aeronautical user
access to the airport on whatever terms that user may desire272and that as the FAA held in Santa Monica
Airport Association v. City of Sank Monica, No. 16-99-21 Final Decision and Order (Feb. 4,2003), 2003 WL
1963858, a sponsor is not required to develop any and all parcels of land in a manner consistent with the
wishes of any one party, but rather may exercise [its] proprietary rights and powers to develop and administer
the Airports land in a manner consistent with the publics interest.273
The County asserts the assurance does not prevent an airport from developing facilities for new or different
markets.. ..274andthat as defined by the FAA, economic discrimination prohibits disparate treatment of
similarly situated aeronautical users. That is not happening at the Airport. Complainants are not being asked to
pay more than others will pay for comparable facilities. They have been and will be offered the same rates as
any other tenant for the facilities in question or for any other facilities at the
The Director agrees with the County in that CRQ has been and will be available for use by operators of pistondriven GA aircraft, notwithstanding the fact that some aircraft will be displaced by the construction of the

Id *17 (Feb. 4.2003).
274 County makes reference here to Ashton 11, Final Decision and Order. 2000 WL 1387887 (July 3. 2000) FAA Exhibit 1, Item 7, p. 12
(Dismissal of complaint where complainant claimed that the City of Concord attempted to keep out certain aircraft and small aviation
businesses and to attract wealthy owners of expensive aircraft.)
272
273
44
project. Grant Assurance 22 does not require any airport sponsor to provide at all times exactly the facilities any
particular segment of the aeronautical community might prefer.
At issue here is whether the County attempted to keep certain aircraft and small aviation businesses out of CRQ.
A review of the record and arguments fail to demonstrate that Complainants or other users at CRQ were
expelled or asked to pay more than others would pay for comparable facilities at the airport. The record
indicates that the PAC/Burrows leases are being offered to all aeronautical users under the same terms and
conditions for similar facilities.
Since there is no evidence that the terms and conditions for the PAC/Burrows leases offered to tenants are
unreasonable or that Complainants are being asked to pay more than others will pay for comparable facilities,
the Director finds the Countys actions consistent with the requirements under Grant Assurance 22.
E.
Issue 3 - Grant Assurance 5 - Preserving Rights and Powers
Whether the County, by granting PACBurrows a right of first refusal as part of the 1993 Settlement
Agreement, has violated Grant Assurance 5, Preserving Rights and Powers.
The Complainants argue that the right of first refusal provision in the PAC/Burrows Settlement Agreement
constitutes a failure to preserve its rights and powers and an abrogation of the Countys obligations under Grant
Assurance 5 and that the County may not rely on its misguided formerly confidential settlement agreement as
justification for granting exclusive rights to P A C / S ~ in
X violation
~~~
of assurance 5 .7277 More specifically, the
Complainants state that the County clearly violated Grant Assurance 5 by entering into a settlement agreement
with Burrows that granted SaxPAC a right of first
The County denies the Complainants allegations by stating that the rights of first refusal in the Burrows
Settlement agreement does not constitute a failure to preserve the Countys rights and
The County
understands that under Assurance 5 it may not give away its ability to comply with its grant assurances, and the
County has not done SO. 280
The County believes that to sustain a finding of failure to preserve rights and powers, the FAA requires a
showing that there is some mechanism or agreement which prevents the airport from exercising its powers to
comply with its grant assurances and that Complainants have not shown, nor can they show, any agreement or
mechanism that bars the County from exercising its powers to adhere to FAA grant obligations and that it has
reserved sufficient powers under the settlement agreement to ensure its ability to comply with all applicable
grant assurances and that the lease agreements explicitly contain language to this effect as required by FAA.281
The record shows that the FAA warned the County that the Settlement Agreement and the right of first refusal
may result in violations of the grant assurances, including Grant Assurance 5 , Preserving rights and Powers. 282
On August 20,2002, the FAAs Airports Regional office (Western Pacific Region) stated that the 1993
Mr. Sax is a representative of PACBurrows.
279 FAA Exhibit 1, Item7, p. 9.
FAA Exhibit 1, Item7, p. 9; See also Town of Fairview v. City of McKinney, Docket No. 16-9904,Final Decision and Order, 2001
WL 88072, at 14 (FAA January 23,2001) County writes A sponsorsresistance to complying with FAA guidance, whether that
guidance is in a grant assurance, advisory circular,Order, DDR andor verbal recommendation does not necessarily constitute a violation
of grant assurance #5. Without some showing of a mechanism or agreement that acts to prevent [the airport sponsor] from exercising
owers to adhere to FAAs interpretation of the sponsors Federal obligations, there can be no violation of this assurance.
FAA Exhibit 1, Item 7, p. 10. The County states that Complainantsargument is not really that the County is without sufficient power
to meet the grant assurances, but rather that the County has not sought to preserve the dilapidated facilities that Complainantsprefer to
use. Grant Assurance 5 does not compel such an undesirable result, and the Complainantsclaim under this assurance should be
dismissed. FAA Exhibit 1, Item7, p. 10.
276
277
45
Settlement Agreement, per Grant Assurance 5 , cannot be used as a reason to subordinate the Countys ability to
comply with the grant assurances. In other words, the county should not give away rights under the settlement
agreement that would force the county to violate the grant assurances.283
The Director notes that the opinion by the FAAs Western Pacific Regional office is tempered by the fact that
the right of first refusal in this case was granted at the beginning instead of the end of the lease term and that it
was limited to one property and not a majority of properties on the airport. Both of these factors do not elevate
the granting of the right of first refusal to a scale that violates Grant Assurance 5. The granting of a right of first
refusal in this case was a first refusal to redevelop the leasehold in settlement of a related dispute. The use of a
right of first refusal clearly established the Countys power to force PAC/Burrows to either perform or be
replaced through the RFP process with another developer. Clearly, the limited scale in the use of the right of
first refusal in this case did not result in the control of the majority of the properties at CRQ or extend control of
the PAC/Burrows leasehold beyond its current expiration date, and thus, does not rise to the level of derogating
the rights and powers of the County.
Moreover, the County proves that its has not subordinated itself to PAC/Burrows by offering copies of its leases
containing clear flow-down language specific to preserving its rights and powers under Grant Assurance 5.284
Therefore, based on the above, the Director finds that the County by granting PAC/Burrows a right of first
refusal as part of the 1993 Settlement Agreement, is not in violation of Grant Assurance 5, Preserving Rights
and Powers, 49 USC Section 47107(a).
F.
Issue 4 - Grant Assurance 35 - Relocation and Real Propertv Acquisition
Whether the Countys actions regarding the PAC/Burrows leasehold amounts to a violation of Grant
Assurance 35, Relocation and Real Property Acquisition, 42 USC 9 4601 et seq.
Complainants argue that by not malung available reasonable alternative accommodations and providing
relocation expenses, the County has violated Grant Assurance 35, Relocation and Real Property Acquisition.285
Grant Assurance 35, Relocation and Real Property Acquisition, requires an airport sponsor to be guided in
acquiring real property by the land acquisition policies in 49 CFR Part 24. The purpose of these requirements is
to implement the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as
amended (42 U.S.C. 4601 et seq.), which guide acquisition of real property to be acquired for Federal and
federally assisted projects. Since the PAC/Burrows development at CRQ does not involve the acquisition of real
property for Federal and federally-assisted projects, Grant Assurance 35 and 49 CFR Part 24 do not apply.
Therefore, the Director rejects the Complainants argument and concurs with the County that the PAC
development is not a federally-assisted project causing permanent displacement.. .it is a private development
causing some temporary displacements of based aircraft at CRQ.286Accordingly, the County has not violated
Grant Assurance 35.
G. Motion to Strike Certain Records

The County filed a Motion to Strike certain evidence from the record. The County asserts that the letter dated
December 5,2004 sent to the docket in this proceeding by Kate Lister, President of Barnstorming Adventures,
Ltd. (the Lister Letter) should be stricken from the record.

FAA Exhibit 1, Item 5 , Attachments 20-25, Articles 2.4.
28s FAA Exhibit 1, Item 1, p. 1,24.
283
284
46
The County maintains that under the applicable provisions of the FAAs Part 16 regulations, the pleadings were
completed when the County filed its Rebuttal on November 24,2004.. ..281 The Complainants, who are all
represented by Ronald J. Cozad, had no right to file a response to the Respondents Rebuttal and that it now
appears that the Complainantscounsel, Ronald J. Cozad, may have instigated or condoned a concerted effort to
subvert the orderly procedures to be followed by the FAA in its review of Part 16 complaints.y288
Upon a review of the records and subsequent to the filing of the instant Complaint, Answer, Reply and Rebuttal
to the Complaint, two third-party entities submitted information and documentation to the FAA which they
perceive to be generally related, either directly or indirectly, to the Countys compliance with its federal
obligations at issue in this proceeding. The Lister Letter precipitated the Countys Motion to Strike.
14 CFR Part 16 does contemplate instances where FAA may request additional information to be submitted to
the FAA from either party or both parties, or seek information on its own. In this particular case, the FAA did
not request any additional documents. The third parties providing information were not requested to do so by
the FAA, and the information was not submitted in accordance with the procedures set forth in 14 CFR Part 16.
In addition, neither party submitted amended pleadings to raise any new allegations or assertions related to the
Lister Letter and the Jay White Letter, nor submitted motions requesting permission to amend the pleadings to
seek consideration by the FAA based on the third-party submissions. On occasion, and at the discretion of the
FAA, such documents may be added to the docket as well as given c o n ~ i d e r a t i o n . ~ ~ ~
Consequently, upon due consideration, the Director strikes the Lister Letter and the Jay White Letter dated
August 29,2004 from the record.
VIII.
FINDINGS AND CONCLUSIONS
Upon consideration of the evidence and argument presented by the parties, applicable law and policy and for the
reasons stated above, the Director finds that based on a preponderance of reliable, probative and substantial
evidence, and under the particular circumstances existing at the airport:
0
The County, by granting leases to PAC/Bmows resulting from a right of first refusal, has not granted an
exclusive right in violation of Grant Assurance 23, Exclusive Rights, 49 USC $ 40103(e) and 49 U.S.C. 5
47107(a)(4),
The County, by its actions in accommodating as many aircraft as possible that were displaced as a result of
the PAC/Bmows development at CRQ, has not violated Grant Assurance 22, Economic Nondiscrimination,
implementing the provisions of 49 USC 47107(a),
0
The County by granting PAC/Burrows a right of first refusal is not in violation of Grant Assurance 5
Preserving Rights and Powers, 49 USC Section 47 107(a) because of the right of first refusal was used at the
outset of the lease term as a way to ensure the redevelopment of one property on the airport, and the County
specifically preserved its rights and powers in its contract with PAC/Burrows.
0
The County has not violated Grant Assurance 35, Relocation and Real Property Acquisition, 42 USC $46011
et seq, since said grant assurance and statutory requirement do not apply to the PAC/Burrows private
development at CRQ.
0
See 14 CFR 0 16.24 for additional information.

FAA Exhibit 1, Item 12, p.2.
289 See Martyn v. Port of Anacortes, WA, FAA Docket No. 16-02-03, Directors Determination (April 14,2003).
287
288
47
ORDER
ACCORDINGLY, it is ordered that:
1. The Complaint is dismissed.
2. All motions not expressly granted herein are denied.

RECOMMENDATIONS
In addition, it is recommended that in order to avoid future problems with its Federal obligations throughout its
airport system, the County take action regarding the following two recommendations:
1. The County review its airport leases or related documents to verify the existence of a clause in each
lease or agreement subordinating those documents to all current and future Federal obligations.
2. The County implement commercial minimum standards that would address service providers at its
airports.
RIGHT TO APPEAL OR REQUEST A HEARING

Pursuant to 14 C.F.R. Part 16, the County may request a hearing under subpart F of Part 16 within 30 days after
service of the Directors Determination. The County may waive a hearing and appeal the Directors
Determination directly to the FAA Associate Administrator within 30 days after service of the Directors
Determinati~n.~~
Alternatively, the County may submit, jointly with FAA counsel, a proposed consent order
under 0 16.243(e) disposing of the case.291This Directors Determination is an initial agency determination and
does not constitute final agency action subject to judicial review under 49 U.S.C. 0 461
Any party to this
proceeding adversely affected by the Directors Determination may appeal this initial determination to the FAA
Associate Administrator for Airports pursuant to 14 CFR 16.33(b) within thirty (30) days after service of the
Directors Determination. However, if the County elects not to request a hearing or to file an appeal in writing
within the time period specified in 14 C.F.R. 0 16.109(c), the Directors Determination becomes final.293
David L. Bennett, Director

Office of Airport Safety and Standards
290 14 C.F.R. $0 16.31(c), 16.33, and 16.109(~)(2).The FAA and the County may agree to extend the date for the County to Appeal
directly to the FAA Associate Administrator for agreeing to extend the 180 day period for issuing a final decision pursuant to 49 U.S.C. $
47106 (d)(2)(A).
291 14 C.F.R. $16.109(~)(4).
292 See also 14 C.F.R. $ 16.247.
293 14 C.F.R. $16.109(d).
48
FAA Exhibit 1
INDEX OF THE ADMINISTRATIVE RECORD

The following items constitute the administrative record in this proceeding:
Item 1
Complaint No. 16-04-08 dated August 17, 2004, including appendices containing the following documents:
0
0
0
0
0
Attachment 1
Attachment 2
Attachment 3
Attachment 4
Attachment 5
0
0
0
Attachment 6
Attachment 7
Attachment 8
Attachment 9
Attachment 10
Attachment 11
Attachment 12
Attachment 13
Attachment 14
Attachment 15
Attachment 16
Attachment 17
Attachment 18
Attachment 19
Attachment 20
Attachment 2 1
Attachment 22
Attachment 23
Attachment 24
Attachment 25
Attachment 26
Attachment 27
Attachment 2 8
Attachment 29
Attachment 30
Attachment 3 1
Attachment 32
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Settlement Agreement & General release, 12/20/1993.

CountyPage letter to Sam Talpalatsky, Esq., 10/10/1995.
Airport Master Plan (portions), 12/1977.
Sax (as attorney for Burrows) letter to County, 4/28/1998.
First Amendment to Settlement Agreement and General Release,
6/ 18/ 1998.
U R S Feasibility Analysis, 5/2/2000.
FAA/Garcia e-mail, 1/24/2001.
Countymarland e-mail, 5/9/200 1.
County/T. Barry letter to C. Connelly, Esq., 4/17/2002.
F M G a r c i a e-mail. 8/20/2002.
CountyKitchen e-mail, 9/27/2002.
PAAC Minutes, 11/21/2002.
Peterson & Price letter to Board of Supervisors, 12/5/2002.
Staff Responses to Peterson & Price letter, Undated.
CountyPAC Power Point presentation, 12/11/2002.
Board of Supervisors Minute Order No. 13, 12/11/2002.
County handwritten notes, 2/14/2003.
CountyDrinkwater letter to FAA, 12/2/2003.
Sax letter to County, 10/2/2003.
PAAC Minutes, 11/20/2003.
Drinkwater e-mail, 11/21/2003.
Hutter e-mail exchange with T. Bosworth, Asst. County Counsel,
1/2/2004.
Drinkwater e-mail to S. Kaats, 11/17/2003; Drinkwater e-mail to F.
Best, 1/1/2004.
Lohr letter to Supervisor Slater, undated.
BYCORKaats letter, 1/8/2004.
Board of Supervisors Land Use Agenda Item, 1/14/2004.
CAA/Cozad letter to FAA, 1/16/2004.
Sample pre-paid lease.
PAC letter, 7/1/2004.
PAC Notice to Vacate to commercial tenants, 7/9/2004.
(No Attachment 3 1 provided).
Cozadnardy e-mail exchange, 7/14/2004.
0
0
0
0
0
0
0
0
0
0
0
Attachment 33
Attachment 34
Attachment 35
Attachment 36
Attachment 37
Attachment 38
Attachment 39
Attachment 40
Attachment 4 1
Attachment 42
Attachment 43
Attachment 44
PAC Notice to Vacate to tie-down and hangar users, 7/20/2004.

Cozad letter, 7/25/2004.
Cornelius letter, 7/28/2004.
Lardy e-mail, 7/28/2004.
Cozad FOIA request, 7/30/2004.
PAC letter, 8/3/2004.
PAA list of Issues, 8/4/2004.
County Hangar & Tie-down availability, 7/3 1/2004.
Letters re County e-mails, 8/15-16/2004.
PAC proposed Extension Agreement, 8/10/2004.
Cozad letter, 8/6/2004.
County/Drinkwater letter 8/12/2004.
Item 2
Notice of Docket No. 16-04-08, September 3,2004.
Item 3
Respondents Request for Dismissal of Complaint, September 1,2004.
Item 4
Respondents Request for extension of Time to File an Answer, September 14,2004.
Item 5
Respondents Answer to the Complaint, November 4,2004, including appendices containing the following
documents:
Attachment 1
Attachment 2
Attachment 3
Attachment 4
Attachment 5
Attachment 6
Attachment 7
Attachment 8
Letter from Palomar Airport Center concerning issues related to the

complaint, from Laurie Orange to Peter Drinkwater, 10/27/2004.
Letter from Peter Drinkwater of the County of San Diego to Airport
Owners Occupying Tie-down Space at McClellan-Palomar Airport, dated
October 25,2004.
Email from Martha Greenlaw to Peter Drinkwater confirming the
relocation of Carlsbad Airport Supply and the sublease agreement between
Magellan and Carlsbad, dated October 22,2004.
Letter from Floyd Best to Peter Drinkwater confirming that the
aircraft from the YAK Flight Club relocated to the PAC leasehold to the
County tie-down ramp, and confirming that no federal funds were approved
for, or used in conjunction with, the PAC Development Project, dated
October 26,2004.
Letter from John Milligan to Peter Drinkwater relating to FAA
approval for tie-downs on the North side of the Airport, 06/29/2004.
Aviation Lease between County of San Diego and Burrows
Southcoast, Inc., dated November 6,1990.
Airport layout plans, May 13,2004 and 09/14/2004.
Restaurant lease between County of San Diego and Palomar Airport
Center, LLC commenced as of February 1,2004.
50
Attachment 9
Attachment 10
Attachment 11
Attachment 12
Attachment 13
Attachment 14
R
0
Attachment 15
Attachment 16
Attachment 17
Attachment 18
Attachment 19
Attachment 20
Attachment 2 1
Attachment 22
Attachment 23
Attachment 24
Attachment 25
Restaurant Rights Agreement between Palomar Airport Center, LLC

and The Blue Max Palomar Airport Company, LLC, dated September 10,
2004.
Assignment and Assumption of Lease Agreement between Palomar
Airport Center, LLC and The Blue Max Palomar Airport Company,
LLC, dated September 10,2004
Board of Supervisors meeting minutes of December 11,2002 (Minute
Order No. 13).
Letter from Kurt Haukohl from the California Department of
Transportation, Division of Aeronautics, to Floyd Best ofMcClellanPalomar Airport, regarding the State inventory and permit compliance
inspection of the Airport that occurred on August 3 1,2004.
Email from Cyril Flavin to Peter Drinkwater confirming that
extensive documentation is not required when existing tenants of long
standing renew their leases, dated October 20,2004.
Letter Ronald Cozad sent to Laurie Orange stating that he
recommends that his client withdraw from mediation, dated September 3,
2004.
Overview of County of San Diego airports, rev. 08/0 1.
Photographs of PAC area..
Letters from George Buley of the Federal Aviation Administration,
addressing the proposed hangars and adjoining structures, dated June 29,
2004, July 14,2004, August 1,2004, and October 18,2004.
Letter from Bo Donovan at Ramona Airport confirming that Roger
Baker has two planes that he has relocated to Ramona Airport, dated
October 26,2004.
Email from Peter Dnnkwater to Thomas Devine confirming that the
west side tie-downs and Taxiway Alpha are part of the FAA project and that
there are presently 37 tie-downs at the west end tie-down area, dated
October 27,2004.
Lease between County of San Diego and Palomar Airport Fuel LLC
for Parcel 1, dated December 11,2002.
Lease between County of San Diego and Palomar Airport Center LLC
for Parcel 5 , dated December 11,2002.
Answer to the complaint in County of San Diego v. Burrows
Southcoast, Inc., dated August 1993.
Item 6
Respondents Motion to Dismiss, November 4,2004.
Item 7
Memorandum in Support of respondents motion to Dismiss, November 4,2004.
51
Item 8
Complainants Reply in Support of Complaint & Opposition to Motion to Dismiss, November 5, 2004.
Item 9
Declaration of Robert Baker (Complainant), November 10,2004.
Item 10
Respondents Rebuttal, November 30,2004.
Item 11 - NOT USED

Item 12
Respondents Motion to Strike, December 2 1,2004.
Item 13 -NOT USED

Item 14
Airport Master Record for CRQ, 03/01/2005.
Item 15- NOT USED

Item 16
County of an Diego, Department of Public Works, McClelland-Palomar Airport Web page and associated
documents, 03/01/2005.
Item 17
McClelland-PalomarAirport FAR Part 150 Study Update: Preliminary Forecast of Aviation Activity,
Revised November 5,2003.
Item 18
Aeronautical Rental Rates at San Diego County Airports, July 30,2004.
Item 19
News Article in General Aviation News, entitled Forcing the little guy out? (1/28/2005).
http://www.generalaviationnews.com/editorial/articledetail.lasso?-token.key=
11042&-token.src=column&nothing
52
FAA Docket No. 16 - 04- OS

FAA Exhibit 2
List of Acronyms
AAIA
AC
m
ALP
ATC
CAA
Caltrans
CFR
CPI
CPRA
CRQ
DD
DOT
FAA
FAR
FBO
GA
ILS
NPIAS
PAC
PCF
RFP
VSRP
USC
Airport and Airway Improvement Act of 1982

Advisory Circular
Airport Improvement Program
Airport Layout Plan
Air Traffic Control
Civil Aeronautics Administration
California Department of Transportation
Code of Federal Regulations
Consumer Price Index
California Public Records Act
McClelland-Palomar Airport
Directors Determination
Department of Transportation
Federal Aviation Administration
Federal Aviation Regulations
Fixed Base Operator
General Aviation
Instrument Landing System
National Plan of Integrated Airport Systems
Palomar Airport Center
Pacific Coast Flyers, Inc.
Request for Proposal
Voluntary Storage Relocation Program
United States Code
53
7 . S . DEPARTMENT OF TRANSPORTATION
FEDERAL AVlATIONADMINISTRATION
> 1 ASSOC
_ _CITY:
-.
PKINT DA7 t: 0310112005

01/20/2005
AFD EFF
Form Approved OMB 2120-0015
LOC ID: CRQ
FAA SITE N R 01376,l.A
5COUNN:
SANDIEGO CA
7 SECT AERO CHT: LOS ANGELES
BASED AIRCRAFT
AIRPORT MASTER RECORD
CARLSBAD
4STATE: CA
2 AIRPORT NAME:
MC CLELIAN-PALOMAR
6 REGIONIADO: AWPNONE
3 CED TO AIRPORT (NM): 03 SE
GENERAL
SERVICES
70 FUEL: 1OOLL A
10 OWNERSHIP
PUBLIC
COUNTY OF SAN DIEGO
1960 JOE CROSSON DRIVE
> 12 ADDRESS:
EL CAJON. CA 92020-1235
> 13 PHONE NR:
619-956-4800
FLOYD A. BEST
> 14 MANAGER:
2198 PALOMAR AIRPORT ROAD
> 15 ADDRESS:
CARLSBAD. CA 92008-4850
> 16 PHONE N R
760-431-4646
> 17 ATTENDANCE SCHEDULE
MONTHS
DAYS
HOURS
ALL
ALL
0700-2200
> 71 AIRFRAME RPRS: MAJOR

> 72 PWR PLANT RPRS: MAJOR
* 11OWNER:
> 73 BOlTLE OXYGEN HIGHAOW

> 74 BULK OXYGEN:
NONE
75 TSNT STORAGE: TIE
76 OTHER SERVICES:
AFRT AMB AVNCS CHTR INSTR RNTL SALES
FACILITIES
>80 ARPT BCN:

CG
> 81 ARPT LGT SKED:
DUSK-DAWN
282 UNICOM:
83 WIND INDICATOR YES-L
PUBLtC
18 AIRPORT USE:
84 SEGMENTED CIRCLE YES
33-07-41.7000N ESTIMATED
19 ARPT LAT:
85 CONTROL SWR: YES
117-16-48.3OOOW
20 ARPT LONG:
86 FSS: SAN DIEGO
331
SURVEYED
21 ARPT ELEV
87 FSS ON ARPT: NO
466
22 ACREAGE:
88 FSS PHONE N R 858-277-7043
> 23 RIGHT TRAFFIC
24
89 TOLL FREE N R 1-800-WX-BRIEF
NO
> 24 NON-COMM LANDING:
25 NPlASlFED AGREEMENTS:NGY
AS la1996
26 FAR 139 INDEX:
.
RUNWAY DATA
06124
> 30 RUNWAY IDENT.
>31 LENGTH:
4.897
> 32 WIDTH:
150
>33 SURF TYPE-COND:
ASPH-G
>34 SURF TREATMENT:
PFC
35GROSSWT:
SW
60
36 (IN THSDS)
DW
80
37
DTW
I10
38
DDTW
-~
90 SINGLE ENG:
91 MULTI ENG:
92 JET:
298
36
48
TOTAL:
382
93 HELICOPTERS:
94 GLIDERS:
95 MILITARY:
96 ULTRA-LIGHT
OPERATIONS
100 AIR CARRIER
101 COMMUTER
102 AIR TAXI:
103 G A LOCAL:
104 G A ITNRM:
105 MILITARY
0
12,130
0
63,744
52.937
1,732
TOTAL:
130.543
OPERATIONS FOR
MOS ENDING
LIGHTINGIAPCHAIDS
HIGH
BSC-G I PIR-G
P4L IP4L
35 I54
3.00 I3.20
N - N IN - N
- N IT - N
N I Y
IMALSR
>40 EDGE INTENSITY:

>42 RWY MARK NPE-COND
> 43 VGSl
44 THR CROSSING HGT
45 VISUAL GLIDE ANGLE
> 46 CNTRLN-TDZ
47 RVR-RW
> 48 REIL
> 49 APCH LIGHTS
OBSTRUCTIONDATA
50 FAR 77 CATEGORY
51 DISPLACEDTHR
> 52 CTLG OBSTN
> 53 OBSTN MARKEDAGTD.
54 HGT ABOVE RWY END
55 DlST FROM RWY END
8 56 CNTRLN OFFSET
57 OBSTN CLNC SLOPE
58 CLOSE-IN OBSTN
B M IPIR
297 I
I
I
I
I
I
50:l I 3 4 : l
N I N
DECLARED DISTANCES
* 60 TAKE OFF RUN AVBL (TORA,

> 61 TAKE OFF DlST AVBL (TODA
62 ACLT STOP DlST AVBL (ASD
63 LNDG DlST AVBL (LDA)
I
4 ARPT MGR PLEASE ADWSE Fb IN ITEM 86 WHEN CHANGES OCCUR TO ITEMS PRECEDED BY >
i.i.n REMARKS
. .- ...
CLOSED TO AIR CARRIER OPNS WITH MORE THAN 30 PASSENGERSEATS FM 2230 TO 0700 EXCEPT BY PPR CALL AMGR 760-431-4646.
\ 026
TORA 4900; TODA 4900; ASDA 4900; LDA 4600.
\ 060
TORA 4600, TODA 4600; ASDA 4600; LDA 4600.
i060
WHEN ATCT CLSD ACTVT MALSR RY 24 CTAF.
i081
i 110
THIS AIRPORT HAS BEEN SURVEYED BY THE NATIONALGEODETIC SURVEY.
i 110-01 ARPT HAS NOISE ABATEMENT PROCEDURES CONTACT AMGR 760-431-4646.
i 11002 MULTIPLEAPCHS BY LARGE ACFT (INCLUDING LARGE HEL) NOT AUTHORIZED.
i 110-03 NO JET ACFT TRNG DUE TO NOISE ABATEMENT AND TFC CONGESTION.
i 110-04 EXTENSIVE BIRD ACTIVITY IN VICINITY ESPECIALLY IN SPRING.
111 INSPECTOR:
F )
FAA Form 5010-4 (5-91)
112 LAST INSP: 1211912003

SUPERSEDES PREVIOUS
13
0
0
0
113 LAST INFO REQ:
G.S. DEPARTMENT OF TRANSPORTATION

FEDERAL AVIATION ADMINISTRATION
>
AIRPORT MASTER RECORD
1ASSOC CITY:
CARLSBAD
4STATE: CA
MC CLELIAN-PALOMAR
6 REGION/ADO: AWP
3 CBD TO AIRPORT (NM): 03 SE
> 2 AIRPORT NAME:
GENERAL
SERWCES
> 70 FUEL:
10 OWNERSHIP:
> 11 OWNER:
> 12 ADDRESS:
> 71 AIRFRAME RPRS:

> 72 PWR PLANT RPRS:
> 73 BO'mE OXYGEN
> 74 BULK OXYGEN
75 TSNT STORAGE:
76 OTHER SERVICES
> 13 PHONE NR:

> 14 MANAGER
> 15 ADDRESS:
> 16 PHONE NR:
>
17 ATTENDANCE SCHEDULE:
MONTHS
DAYS
HOURS
18 AIRPORT USE:
19 ARPT LAT:
20 ARPT LONG:
21 ARPT ELEW
22 ACREAGE:
> 23 RIGHT TRAFFIC:
> 24 NON-COMMLANDING:
25 NPIASFED AGREEMENTS:
26 FAR 139 INDEX:
RUNWAY DATA
> 30 RUNWAY IDENT.
'31 LENGTH:
> 32 WIDTH:
> 33 SURF TYPE-COND:
'34 SURF
SW
35GROSSWT:
36 (IN THSDS)
DW
37
DTW
38
DDTW
FACILITIES
> 80 ARPT BCN:

> 81 ARPT LGT SKED:
> 82 UNICOM:
> 83 WIND INDICATOR
84 SEGMENTED CIRCLE:
85 CONTROL TWR:
86 FSS:
87 FSS ON ARPT
88 FSS PHONE N R
89 TOLL FREE N R
PRINT DATt: 03/01/2005

AFD EFF
01/20/2005
Form Approved OMB 2120-0015
FAA SITE N R 01376.1'A
LOCID: CRQ
5 COUNTY:
SAN DIEGO
7 SECT AERO CHT: LOS ANGELES
BASED AIRCRAFT
90 SINGLE ENG:
91 MULTl ENG:
92 JET
TOTAL
93 HELICOPTERS:
94 GLIDERS:
95 MILITARY
96 ULTFW-LIGHT
OPERATIONS
100 AIR CARRIER:
101 COMMUTER:
102 AIR TAXI:
103 G A LOCAL:
104 G A ITNRNT:
105 MILITARY.
TOT&
LlGHTINGlAPCH AIDS
>40 EDGE INTENSIN:
> 42 RWY MARK TYPE-COND
>43 VGSl
44 THR CROSSING HGT
45 VISUAL GLIDE ANGLE
> 46 CNTRLN-TDZ
> 47 RVR-RW
> 48 RElL
'49 APCH LIGHTS
OBSTRUCTION DATA
'
50 FAR 77 CATEGORY
> 51 DISPLACEDTHR
> 52 CTLG OBSTN
> 53 OBSTN MARKEDLGTD
> 54 HGT ABOVE RWY END
> 55 DlST FROM RWY END
> 56 CNTRLN OFFSET
57 OBSTN CLNC SLOPE
58 CLOSE-IN OBSTN
DECLARED DISTANCES
60 TAKE OFF RUN AVBL

> 61 TAKE OFF DlST AVBL (TODA)
> 62 ACLT STOP DISTAVBL (ASDA)
> 63 LNDG DlST AVBL (LDA)
(>) ARPT MGR PLEASEADVISE FSS IN ITEM 86 WHEN CHANGES OCCUR TO ITEMS PRECEDED BY >
110 REMARKS:
A 110-05 RY 24 HARD TO SEE 2 HRS PRIOR TO SUNSET. DO NOT MISTAKE SOUTH TWY AS RY OR DRAG STRIP 2.5 MILES EAST FOR RY.
A 11047 RWY 24 I
S CALM WIND RWY.
A 110-08 TWY A LTD TO 60000 LBS.
A 110-09 POWER LINES 2 MILES w a sw.
A 110-10 VOLUNTARY JET CURFEW 2200-0700.
A 110-11 REQUEST JETS FLY THE ILS APPROACH.
A 110-12 LTD TRANSIENTTIE DOWN SPACE O N PUBLlC RAMP.
A 110-13 PPR FOR ALL MILITARY ACFT CALL AMGR (760) 431-4646.
A 110-14 RY 06 SAFETYAREA 600 FT.
>
111 INSPECTOR:
F )
FAA Form 5010-1 (5-91)
SUPERSEDES PREVIOUS
112 LAST INSP 12/19/2003
113 LAST INFO REO:
Page 1 of2
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DEPARTMENT OF PUBLIC W O R K S
JOHN i
.
SNYDER
5555 OVERLAND AVE, SUITE 2188

SAM DIEGO, CALJFORNiA 92123-1295
DIREGTOR
(858) 894-2212 FAX: (858) 2689461
Web Sltff: +d:daw.org
October 25,2004
To:
Airplane Owners Occupying Tie Down Spaces at

McCtellan-PalornarAirport
From:
County of San Diego, Dept. of Public Works, Airports (CountyAirports)
MCCLELLAN-PALOMARAIRPORT
- VOLUNTARY AIRCRAFT STORAGE RELOCATION PROGRAM
Following a recent review. County Airports determined that we do not have adequate capacity to
accommodate a maif number of aircraft currently located at McCleltan-Palomar Airport, during the period
of multiple construction projects. To provide adequate aircraft parking at this location. County Airports is
undertaking the design and construction of a North-side aircraft parking ramp. However, in order to
resolve the immediate short-term overcrowding problem during construction of this ramp and other
projects, County ASrports is initiating a voluntary aircraft storage relocation program available to persons
who currently store their aircraft in tie-down spaces at McClellan-PabmarAirport.
As an incentlve for aircratt owners to temporarily relocate their aircraft to Fallbrook Airpark, Gilfespie
Field, or Ramona Airport, County Airports is prepared to offer freerent on County tie-down ramps at these
locations for a period of two (2) years tor any aircraft relocated there from McClellan-Patomar Airport.
Those electing to take part in this program wilt maintain their place on a waiting list for both the No&-side
and West-end tiedown ramps at McClellan-Palamar Airport.
There are a limited number of County tie-down spaces available for this two-year relocation program: Five
(5)at Faifbrook Airpark; Twenty (20) at Gillespie Field; and Ten (10) at Ramona Airport. These spaces
are availabte on a first-come, first-servedbasis, to eligible participants only. Those who are interested in
participating in this program are asked to complete the attached application and fomard a copy to County
Airports as early as possible.
This offershalt also apply to any aircraft proved to Countys satisfaction to have relocated from McCletlanPalomar Airport to another County Airport within the past two months, due to a lack of storage capacity a:
McClellan-PalomarAirport.
Any questions regarding this program shoutd be directed to Anne Paul, Real Property Agent, at (619)
956-4819.
Kids
Thhe Environment
Safe and tivubfe Communities
HANGAR & TIEDOWN AVAILABILITY

GILLESPLE FIELD, RAMONA AIRPORT, FALLBROOK AIRPARK
Updated: October 18,2004
Available
FIXED BASE OPERATOR
Borrego Valley Airport
County of San Diego
Richard Sellinger - Airport Manager
1820 Palm Canyon
Sand Diego, CA 92004
Fallbrook Airpark
L18 Air Park
David Mallem
Located west side of Airpark
Fallbrook, CA 92028
Fallbook Airpark
AHM
Lee A y m
2141 So. MissionRd (west side)
FaIlbrook, CA 92028
Fallbrook Airpark
County of San Diego
Richard Sellinger- Airport Manager
2141 So. Mission Rd
Fallbrook, CA 92028
Gillespie Fiefd
El CaGn Flying Service
Rick and Rob Dennis
1825 North Marshall Avenue, El Cajon
GillesDie Field
Goldei State Aviation
Steve MasodRichard Essery
1640 North Johnson Avenue, El Cajon
Gillesoie Field
Royal Jet, Inc. - Hadi Stein
Dennis Stein- On Site Manager
681 Kenney Street, El Cajon
,
Gillesde Field
South& Cal Aircraft Repair
Ted Hazelwood
1880 Joe Crosson Drive, El Cajon
Gillespie Field
County of San Diego
Roger Griffrths- Airport Manager
1960 Joe Crosson Dr
El Cajon, CA 92020
Ramona Airport
Cruiseair Aviation
Rick Lucia
2428 Montecito Road,
Ramona, CA 92065
Ramona Airport
Pacific Executive Aviation
Jaye Matthews
2428 Montecito Road,
Ramona, CA 92065
Ramona Airport
County of Sa; Diego
Richard Sellinger- Airport Manager
2450 Montecito Rd
Ramona, CA 92065
PHONE/FAX
I (760) 788-3366
Email:
richard.selin aer@;sdcountv.ca.
wwwsdcounty .ca.gov
(760) 728-7401
Email: info&L l8airpark.com
www.Ll8AuPark.com
HANGARS TIEDOWNS
I25
10
I
I6 shack!
shcltcn:
12
T- banpars
(760) 43 1-7670
No email address
(760) 788-3366
Email:
richard .selinserlij::sdcc~untv.ca.
I www.sdcounty.ca.gov
I 448-8000
II
I
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448-4932 (FAX)
rob(~elcaionaircraf.corn
rick~~elcaionaircraft.cont
449-0611 or
1-800-2774568
448-4387 (FAX)
Richardt5iGSFC.com
448-4200
448-0100 (FAX)
Dennis@roualietinc .coni
448-5010
448-3848 (FAX)
teddvzfii,ea~tblink.nct
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avail. in
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956-4801 (FAX)
Roger.gnfiths@sdcounty.ca.gov
50
(760) 789-8020
cunseaira(u;~hc~rlobal.net
(760) 789-6384
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122
COUNTY O F SAN DIEGO AIRPORTS

APPLICATION FOR TIE DOWN SPACE RELOCATION
Airport Owner: COUNTY OF SAN DIEGO

Airport Preference(please rank the following County airports amording to preference of where
you would like to secure a County tie down space. Spaces will be assigned on a first-come firstFa1Ibrook Airpark
served basis).
Gillespie Field
Ramona Airport
Current Aircraft Storage Locationat CRQ:

Full name of Applicant:
( ) %le Prqxieturship or
( ) Partnership
( ) General, or ( 1 Limited
Statement of Partnership Recorded
(
1 Corporation
Incorporated
in
(Date)
(State)
in
(Date)
(State)
Attach List of Officers and Directors with names and addresses.
Applicant Contact Name:

Applicant Business Address:
Telephone:
Applicant Home Address:
Wow long at this address?
Telephone:
Aircraft Registration No.
Type of aircraft:
Registered Owner:
Signature of Applicant (Owner or Authorized Agent):

Date:
Anne T. Paul, Real Property Agent

County ofSan Diego
1960 Joe Crosson Drive
Please return io:
El Cajon CA 92020
(619) 956-4801
Or fax to:
2
For office use only.

Date and time received
.... . ,..
Number on log
-._I__
..
"
.,.. ..
...
_.
REPORT
McCLELLAN-PALOMAR AIRPORT
FAR PART 150 STUDY UPDATE
PRELIMINARY FORECAST OF
AVIATION ACTIVITY
Preparedfor
McClellan-Palomar Airport
2198 Palomar Airport Road
Carlsbad, CA 92008-48 14
URS Project No. 27653003.01301
Revised November 5,2003
1615 Murray Canyon Road, Suite 1000

San Diego, CA 921084314
619.294.9400
Fax: 619.293.7920
TABLE OF CONTENTS
Section 1 Aviation Activity Forecast...........................................................................................................
1-1
Introduction.............................................................................................................
1-1
Overview of Economic and World Events and Industry Trends ............................
1-1
1-1
1-2.1 Economic and World Events ......................................................................
1.2.2 Industry Trends ..........................................................................................
1-2
1-4
1.3 Historical Aviation Activity ....................................................................................
1.3.1 Historical Annual Aircraft Operations ......................................................
-1-4
1.3.2 Air Carrier Operations................................................................................ 1-7
1.3.3 Commuter Operations ................................................................................ 1-7
. .
13 . 4 General Aviation Operations ...................................................................... 1-7
1.3.5 Military Operations .................................................................................... 1-7
1.3.6 Aviation Forecasts ....................................................................................
1-11
1.3.7 Forecasting Methodologies ..................................................................... -1.11
1.3.8 Aircraft Operations................................................................................... 1-11
1.20
1.4 Comparison of Forecasts ......................................................................................
1.4.1 Commercial Operations ............................................................................ 1-21
1.4.2 General Aviation Operations .................................................................... 1-21
Fleet
Mix Forecast ................................................................................................
1-21
1.5
1.1
1.2
URS
W:V7653003\01301-B-R.DOC~NOV03\SDG
List of Tables and Figures

Tables
Table 1.1
Table 1.2
Table 1.3
Table 1.4
Table 1.5
Table 1.6
Table 1.7
Table 1.8
Table 1.9
Historical Total Aircraft Operations

Historical Aircraft Operations by Operational Category
1997 Master Plan Forecast
Commercial Operations Forecasts
General Aviation Operations Forecasts
Average Annual Compound Growth Rates - 2003-2013
Aircraft Operations Preferred Forecast
Comparison to FAA TAF and URS Adjusted TAF Forecast
Fleet Mix Forecast
Figures
Figure 1.1
Figure 1.2
Figure 1.3
Figure 1.4
Figure 1.5
Figure 1.6
Figure 1.7
Figure 1.8
Figure 1.9
URS
Historical Aircraft Operations

Historical Commercial Operations
Historical General Aviation Operations
Commercial Operations Forecasts
Itinerant General Aviation Forecast
Local General Aviation Operations Forecast
Preferred Commercial Operations Forecasts
Preferred Itinerant General Aviation Operations Forecasts
Preferred Local General Aviation Operations Forecasts
..
W.\27653003\01301-BR.DOC\5-NOV-03\SDG
11
SECTIONONE
Auiation Activitv Foreeast
1.I INTRODUCTION
This section presents forecasts of aviation demand at McClellan-Palomar Airport (CRQ) through the
year 2013. These forecasts provide the basis for estimating future aircraft operational levels and their
associated noise impacts to the land uses surrounding the airport. The forecasts presented in this
section were prepared based on historical annual activity through June 2003 and estimated monthly
activity through the remainder of 2003.
It should be noted that aviation forecasting consists of educated estimates regarding future activity
levels. Although past trends and current industry events provide clues regarding future levels of
activity, the actual level of aircraft operations that will occur at CRQ are unknown. Thus, the
forecasts presented on the following pages should be reviewed with this fact in mind.
1.2
OVERVIEW OF ECONOMIC AND WORLD EVENTS AND INDUSTRY TRENDS
The challenges currently facing the aviation industry are unprecedented, and most experts agree that
the industry is in a crisis. Several major carriers are currently in, or very close to, bankruptcy.
Passenger enplanements are significantly lower than recent years in every category of traaffic, and
prospects for the near-tern foture are uncertain. Reasons for the dismal state of affairs include the
2001 economic recession, September 11 terrorist attacks, war in Iraq, and a number of other issues.
All of these factors could affect future passenger demand and aircraft activity levels at CRQ. A brief
summary of these issues is presented in the following paragraphs.
1.2.1
Economic and World Events
1.2.1.1 Economic Recession

The U.S. entered its tenth economic recession since World War I1 in the first quarter of 2001; the
recession lasted through the third quarter of the same year. Economic growth since the recession has
been erratic, with growth of Gross Domestic Product (GDP) ranging from a high of 5 percent in the
first quarter of 2002 to a low of 1.3 percent in the second quarter of 2002. For the calendar year
2002, GDP growth was 2.4 percent, compared to 0.3 percent in 2001 and 3.8 percent in 2000. The
present state of the U.S. economy is uncertain. With reported upturns in certain key economic
sectors, the short-term outlook is clouded by national and worldwide political turmoil.
1.21.2 September 77 Terrorist Attacks

The aftermath of the September 1 1, 2001, terrorist attacks with respect to the aviation industry has
decreased passenger demand and increased costs to the airlines significantly. Aircraft activity levels
have not yet rebounded to the levels experienced prior to the attacks, and the latest Federal Aviation
Administration (FAA) projections indicate that aircraft activity levels will not return to
pre-September 1 1 levels until 2004/2005. Security-related costs have imposed significant new costs
on airlines, including mandates for the installation of new cockpit doors. These costs, along with
higher labor and fuel costs, have resulted in severe financial losses for most major U.S. airlines.
URS
W \27653003\01301-B-R.DOC\SNOV-O3ISOG
1-1
Aviation Actsuitg Forecast

Because of the lower passenger levels and higher costs, many airlines have reduced their schedules
and in many instances substituted service by their code share regional partners for mainline service.
1.2.1.3
Middle East Hostilities
As of September 2003, U.S. military involvement in Iraq is continuing and has had a broad effect
across the aviation industry. Nearly all airlines have experienced decreases in passengers and have
cut capacity in response. The Air Transport Association (ATA) described the impact of the war as
follows in a March 26,2003, press release:
In the week preceding the war, traffic moderated slightly. Following the March 16
Azores Summit (between U.S. President Bush and British Prime Minister Tony Blair),
however, demand dropped at a pace not seen since the aftermath of the September 11
attacks. Traffic for the week ended March 23 fell 10 percent, led by a 25 percent drop in
the Atlantic, a 13 percent drop in the Pacific, and an 8 percent drop in Latin markets.
Domestic traffic also fell 7 percent.
Advance bookings for the next 60 to 90 days suggest no relief in sight. Domestic
bookings are down more than 20 percent, Atlantic down more than 40 percent, Latin off
more than 15 percent, and Pacific more than 30 percent. Airlines have reported that on
some days cancellations are exceeding bookings.
Obviously, the Middle East military efforts will have an effect on passenger enplanements for
calendar year 2003. The duration and intensity of the military involvement will determine the
magnitude of effect. However, data for the period following the 1991 Gulf War suggests that
passenger levels may rebound to pre-war levels within six months of the end of hostilities.
1.2.2
Industry Trends
Because of and in response to recent world and economic events, the aviation industry is undergoing
numerous changes. These changes include the continued growth of low-cost carriers, expanded use
of regional jets, continued use of the hub and spoke system, and expansion of security procedures.
These issues are explored briefly in the following paragraphs, and their ability to positively or
adversely affect future activity levels at CRQ is discussed.
1.2.2.1
Growfh of Low-Cost Carriers
Low-cost airlines such as Southwest Airlines, JetBlue Airlines, Air Trans, and American Trans Air
have continued to gain market share in recent years as business travelers seek less-expensive
alternatives. Low-cost carrier service is available at nearby markets such as Los Angeles, San Diego,
Long Beach, and Burbank. The proportion of travelers in the McClellan-Palomar market using
low-cost air carriers at these surrounding markets instead of service at CRQ is unknown. However,
based on data at similar markets, there is a high potential for significant diversion of air passengers in
the McClellan-Palomar market.
URS
W:\27653003\01301-8-R.DOC\5-NOV-03\SDG
1-2
SECTIONONE
MationActivitlJ Forecast
This factor would tend to indicate slower growth in future years as low-cost carriers in surrounding
markets capture a greater share of the market. However, this may be mitigated somewhat because
traditional mainline carriers seek to reduce airfares to stimulate passenger demand.
1.2.2.2
htroduction of Regional Jets
Regional jets are defined as jet aircraft accommodating 35 to 100 passengers. These aircraft have
been acquired by commuter airlines to replace their turboprop aircraft, typically providing connecting
service to mainline carriers at hub airports. The significance of these aircraft to a market such as
McClellan-Palomar is that these aircraft provide a superior level of customer service and
convenience in comparison to the turboprop aircraft that they replace. Passengers typically rank
regional jet aircraft much higher in terms of comfort because of their low noise and vibration levels
in the cabin, as well as the fact that many of these aircraft are boarded via loading bridges, whereas
the turboprop aircraft they are replacing are boarded via the ramp. Thus, the passenger is provided
with weather protection while boarding the aircraft.
Because of this higher comfort and convenience level, airlines are finding regional jet aircraft are
stimulating trafic in markets previously only served by turboprop aircraft. Certain passengers prefer
to drive to the connecting hub airport rather than use turboprop aircraft.
1.2.2.3
Continued Use of Hub and Spoke Networks
Nearly all major airlines in the United States use a hub and spoke route network whereby aircraft
from various destinations (the spokes) are flown to a single airport (the hub) to transfer passengers
with common destinations to an outbound aircraft. Aircraft arrive and depart the hub airport at a
similar time to enable passengers to transfer from one aircraft to another. This type of route network
enables passengers from a market such as McClellan-Palomar to reach a greater number of
destinations at a greater frequency than would be possible without such a network.
Although airlines are currently experiencing severe financial distress, none have indicated, to date,
that the prevailing hub and spoke network will be dismantled. Some airlines, such as American, have
instituted hub reforms seeking to improve the efficiency of their hubs by spreading out demand, but
the basic structure of the hub and spoke network remains unchanged.
This means that future air service patterns at CRQ are likely to continue to consist of commuter
airlines providing connections to nearby major hubs such as Phoenix and Los Angeles. Service to
independent locations is unlikely to generate sufficient passengers to be viable economically. This
factor indicates that there are few opportunities for additional passenger service in the
McClellan-Palomar market.
1.2.2.4 Increased Security Procedures

In the aftermath of September 1 1, the FAA implemented stricter security procedures, thereby increasing
the amount of time required for passenger screening. Consequently, passengers needed to allow
additional time before scheduled departure time for passing through security. This additional time was a
significant factor for short trips because travel by car became an even more viable alternative.
URS
W:\27653003\013018R.DOC\5NOV03\SDG
1-3
Aviation ActiuitY Forecast

In addition to the time factor, certain parties complained of the hassle factor associated with
commercial air transportation, especially when secondary gate screening was being conducted.
However, many of these complaints have since subsided, and security delays no longer appear to be a
significant issue with regard to decreasing travel demand. Although aviation security has been and
continues to be a major issue in the aviation industry, passenger screening does not appear to have a
negative effect on passenger levels as in the months following the September 1 1 terrorist attacks.
1.22.5
Changing Role of the Regional Commuter Market
Beyond the effects of low-cost carriers, the regional commuter market is also experiencing dynamic
changes to more adequately serve its shifting price-sensitive customer base and to better use its m e n t
fleet of aircraft. Such changes and their effects will most likely be more pronounced at CRQ. One current
example is the recent reallocation of a i r d by a commuter airline serving CRQ to another larger airport
within an expanding market. Changes in the economy, increases in fares, and lack of market leverage
present increased pressure on each commuter airline serving CRQ to maintain adequate and viable load
factors and profit margins. That said, CRQ may experience unilateral decisions by commuters to limit
flight and city-pair offerings, or in the most extreme cases, discontinue service altogether.
1.3 HISTORICAL AVIATION ACTIVITY

A key factor in attempting to predict future trends affecting air& operations at CRQ is understanding
and analyzing current and past trends at the airport. Therefore, this section examines and documents
those trends and provides the basis for the forecasts presented in the following section. Historical data
were obtained fiom airport management records and air traffic control records fiom the FAA. An
assessment of aircraft operations is presented first, followed by an assessment of aircraft fleet mix.
1.3.1
Historical Annual Aircraft Operations
The FAA defines an aircraft operation as either an arrival or a departure. Under this definition, an
aircraft touch and go is considered two operations because the aircraft conducts a landing and
takeoff during the maneuver. This section includes a distribution of the historical operations.
Historical aircraft operations at CRQ have been recorded in the FAA Terminal Area Forecast (TAF),
and FAA Air Traffic Activity Data System (ATADS). Both of these data sources reflect the same
historical trend for aircraft operations at CRQ. Historical operations documented by the FAA TAF
were used for this review for 1980 through 1989, and the FAA ATADS were used for 1990 through
2002. When logging this data, the TAF and the ATADS separate the annual operations into the
following six categories:
Itinerant Air Carrier (none since 1999)
Itinerant Commuter/Air Taxi
Itinerant General Aviation
Itinerant Military
Local General Aviation
Local Military
~
URS
W:V7653003\01301-B-R.DOC\5-NOV-O3\SDG
1-4
Aviation Activity Forecast

Table 1.1 and Figure 1.1 present historical total aircraft operations for CRQ from 1980 through 2002.
Aircraft operations at CRQ have shown a slight negative trend since 1980, decreasing approximately
14 percent since 1980 and almost 30 percent since 1999. Table 1.2 presents annual local and itinerant
aircraft operations, by operational categories, for 1980 through 2002.
Table 1.1
HISTORICAL TOTAL AIRCRAFT OPERATIONS
Year
Number of Operations
1980
237.390
1981
211,829
1982
1983
175,740
195,299
1984
1985
195,237
1986
190,345
198,411
1988
1989
201.799
222,720
1990
1991
1992
1994
220.621
220.570
1997
-17%
11%
0%
-6%
4%
4%
2%
10%
-14%
15%
225,041
217,739
1995
1996
255,369
1993
-11%
183.513
1987
Percent Change
2%
-3%
1%
204,191
227,764
-7%
12%
245.092
8%
244,969
291,873
-1%
19%
1998
1999
2000
255.096
-13%
2001
221,898
-13%
2002
204,155
-8%
- 1
1002
566 1
366 1
L661
966 1
966 1
P66C
661
266 1
L
1661
066 1
686 C
886 C
L86 1
986 C
986 1
V86 1
86 1
2861
1861
086 1
SECTIONONE
I.3.2 Air Carrier Operations

For traffic-count purposes, an air carrier aircraft is defined as having a maximum passenger seating
capacity of more than 60. Since 2000, all scheduled passenger service at CRQ has been provided by
commuter aircraft of fewer than 60 seats.
1.3.3
Commuter Operations
Commuter operations at CRQ consist of service by America West to Phoenix-Sky Harbor International
Airport, and United Express to Los Angeles International Airport. Commuter operations have increased
approximately 148 percent since 1980, an average annual increase of almost 4.2 percent. The airport
experienced its highest level of commuter operations in 2000, with 16,545 commuter operations.
Historical commuter operations are presented in Table 1.2 and Figure 1.2.
1.3.4
General Aviation Operations
General aviation includes all segments of the aviation industry except for commercial air service and
military operations. Typical general aviation activities include pilot training, corporate, and pleasure
flying. Operations at the airport are conducted by single- and multi-engine piston aircraft, turboprop
and turbojet aircraft, and helicopters.
General aviation operations are recorded as local or itinerant. Local operations, primarily arrivals or
departures performed by aircraft remaining in the airport traffic pattern or local training area, are
most often associated with training activity and flight instruction. Itinerant operations are arrivals or
departures other than local operations performed by either based or transient aircraft.
Table 1.2 and Figure 1.3 present historical general aviation operations separated into itinerant and
local operations. On average, since 1980 itinerant general aviation operations have accounted for
59 percent of general aviation activity at CRQ. General aviation activity generally increased from the
early 1980s through 1999. Since then, operations have experienced a downward trend beginning in
2000. The reduction of recent general aviation activity at the airport is a direct reflection of the
economic downturn. Based on historical trends, local and itinerant general aviation activity will most
likely rebound to previous levels mirroring increased economic activity, leading to increased
business-related and personal pleasure flight activity.
1.3.5
Military Operations
Military operations at CRQ have fluctuated since 1980, with a high in 1999 of 12,617 operations and
a low in 1997 of 1,364 operations. According to air traffic control personnel, military operations at
CRQ consist primarily of aircraft performing training operations. Military aircraft using CRQ consist
primarily of transport aircraft, such as the C-2, C-9, and C-12, and rotary-wing aircraft, such as the
OH-58, CH-53, and SH-60. Historical military operations are presented in Table 1.2.
URS
W \27653003\0130l-B-R DOCbNOV43SDG
1-7
lluiation Actiuitv Forecaa
SECTIONONE
Table 1.2
HISTORICAL AIRCRAFT OPERATIONS
BY OPERATIONAL CATEGORY
Year
1980
Air
Carrier'
0
GA
Commuter
I
5,305
Military
1
117,383
GA
I
1,433
108,250
62,472
69,812
87,779
66,893
75,061
69,338
71,473
55,619
66,512
73,683
79,726
84,224
78,405
70,671
62,774
72
204,155
SOURCES
FAA TAF 2002 Scenario, March 2003, for years 1980 to 1989.
McClellan-Palomar FAA ATADS, for years 1990 to 2001,
NOTES
TAF data is presented in FAA fiscal years. Other records are presented in calendar years.
GA = General Aviation
'CRQ has never had commercial air carrier service (aircraft of 60 seats or more). According to the FAA tower staff, it is likely that
nearly all of previous years' counts of air carrier operations were mistakenly classified as air carrier ops and should have been
classified as air taxi operations.
URS
W:K7653003\01301-B-R.DOC\5-NOV-O3\SDG
1-8
86 L
:861
186 1
286 ).
Z861
186C
086L
:ooz
ooz
3ooz
6661
i
61
561
561
561
661
661
661
E
L
661
1661
W6 1
3861
L86 1
986C
S861
P861
861
Z861
1861
0861
Aviation ActiVitY Forecast

1.3.6
Aviation Forecasts
This section presents forecasts of aircraft operations and aircraft operational fleet mix. Forecasts
from other studies and independent sources are also presented to provide a point of reference lfom
which to compare the updated forecasts.
1.3.7
Forecasting Methodologies
Methodologies commonly used for forecasting include trend analysis and market share analysis. AI1
such methodologies are based on the premise that historical trends or relationships can be used to
predict future activity levels. A description of each methodology is provided as follows:
0
Trend Analysis. This type of analysis is one of the simplest forecasting techniques. The method
fits growth lines to historical data and extends them into the future. This methodology assumes
that the same factors affecting aviation activity in the past will continue to do so in the future.
Market Share Analysis. This analytical tool involves review of historical activity levels at
the airport as a percentage share of a larger market. For instance, the number of aircraft
operations at the airport is compared to the total number of aircraft operations in the region,
state, or nation. This relative share factor is then held as a constant and increased in direct
proportion to the projected growth within the region, state, or nation to determine likely future
activity levels at the airport.
These two analytical techniques assume that previous relationships will continue to exist in the
future. Consequently, these methods do not consider the effects of more-aggressive marketing,
increased service leveIs, or other changes occurring independently of past relationships. To
supplement this type of analysis, the complimentary approach of forecasting involves professional
judgment. During this phase, decisions about the validity of forecasts resulting fiom the analytical
analyses are made. Intangible factors are then considered when developing a preferred forecast.
1.3.8 Aircraft Operations

This section addresses forecasts of aircraft operations. These forecasts provide the basis for
estimating future aircraft operational levels and their associated noise impacts to the land uses
surrounding the airport.
1.3.8.1
Previous Forecasts of Aircraft Operations
Independent forecasts of aircraft operations obtained and reviewed are described below:
0
URS
McClellan-Palomar Airport Master Plan (1997). The forecast of aviation activity as

published for the 1997 McClellan-Palomar Airport Master Plan developed by Coffinan
Associates, Inc., was reviewed and analyzed. The forecast presented projections of aircraft
operationa1 levels, passenger enplanements, and based aircraft counts for the forecast years
2000,2005, 2010, and 2015. The aircraft operational forecast for commercial, air taxi, general
aviation, and military operations is shown in Table 1.3.
W:V7653003\01301-B-R.DOWNOV-03\SDG
1- 11

Table 1.3
1997 MASTER PLAN FORECAST
SOURCE
1997 McClellan-PalomarAirport Master Plan, Coffman Associates, Inc.
Over the 15-year forecast period of 2000 through 2015, the average annual compound growth rate of
all aircraft operations was reported to be 1.05 percent. Projected average annualized compound
growth rates for commercial operations of aircraft having 60 seats or more was 3.20 percent and air
taxi operations was reported to be 1.44 percent for the same period. Local general aviation operations
were projected to increase at a rate of approximately 1 percent, whereas itinerant general aviation
operations were projected to increase at a rate of approximately 1.3 percent annually. In keeping with
standard practices of forecasting military operations at civilian airports, local and itinerant military
operations were held constant throughout the entire forecast period.
Based on this review, it is apparent that the Master Plans forecast of commercial operations does not
adequately reflect current market conditions, the adverse effects of September 11, or other factors.
Likewise, variations in growth characteristics of local and itinerant general aviation and military
aircraft operations, as well as the evolving air taxi market, would suggest that a revised and updated
forecast of aircraft operations is currently warranted. That said, overall annualized operations levels
for all aircraft appear to fall within 5 to 13 percent of current projects as listed in the TAF for the
airport.
0
FAA Terminal Area Forecast. The TAF projects aircraft operations at CRQ to increase to
approximately 297,000 in 2020 from their current level of approximately 204,000 operations in
2002. The average annual growth rate associated with this forecast is approximately 2.1 percent.
FAA Aerospace Forecasts, FY 2003-2014 (March 2003): Using the FAAs Aerospace
Forecast for Fiscal Years (FY) 2003-20 14, average annual compound growth rate projections
of commuter/air taxi operations and general aviation operations were developed for the
forecast period (2002-2013). These FAA growth rates were applied to the actual respective
activity levels for 2002 and have grown outward to 2013.
URS
W \27653003\01301-B-R DOC\5.NOV-O3EDG
1 - 12

1.3.8.2
Updated Forecast of Commercial Operations
Commercial operations at CRQ consist of scheduled service performed by commuter aircrafl of

fewer than 60 seats. Table 1.4 and Figure 1.4 present forecasts of commercial operations developed
using typical aviation activity forecasting techniques along with the FAA's TAF. These forecasts
consist of a market share of commuter/air taxi operations to national, state, and market-specific state
operational levels, a 10-year trend line, and a forecast based on growth rates presented in the FAA
Aerospace Forecastsfor Fiscal Years 2003-2014.
When comparing and analyzing the various forecast extrapolations shown in Table 1-4 and Figure 1.4, it
is apparent that use of the market share approach to project future aircraft operations yields a consistent
estimate of future commercial operational levels. These forecasts, however, had wide variations when
comparing average annual compound growth rates. Because of such variations, the market share
forecasting technique was not considered a reliable forecasting tool for this forecasting effort.
When inspecting the TAF for the airport, the FAA's assumed quick recovery between 2002 and 2003 is
most evident. This single event would yield a single-year increase rate of almost 36 percent. As history
has shown, perhaps because of the extended economic recession or military operations overseas, the
recovery did not occur. Further, the projected 2002 annual total of commercial operations at the airport as
listed in the TAF was higher than the actual levels recorded. If, however, this single year-over-year
increase is discounted, the average annual compounded projected rate for the 10-year period covering
2003-2013 is reduced to a more conservative 2.3 percent. This estimate is similar to the FAA's National
Aerospace forecast of similar commercial operations of 2.78 percent for the same period.
Table 1.4
COMMERCIAL OPERATIONS FORECASTS
~~
TAF Forecast of
CRQ TAF
Forecast'
Year
California
Market
U.S.Market
Share
California
California
Primary
Share
Market
Share
Primary
Market
Share
CRQ 10Year Trend

Line'
FAA
Aerospace
Forecast
2003'
2002
13,209
13,140
13,140
13,140
13,140
13,139
13.140
2003
17,964
13,740
13,803
13,921
13,628
15,326
13,469
17,101
15,543
18,877
17.701
2008
2013
20,226
22,488
15,013
16,258
14,995
16,053
1.84%
15,317
16,548
2.12%
14,097
14,566
0.94%
Average Annual Compound Growth Rate

2002-2013
4.96%
1.95%
3.35%
2.75%
Sources
1. FAA 2002 Scenario TAF, March 2003.
2. McClellan-Palomar FAA ATADS Records.
3. FAA Aerospace Forecasts,PI2003-2014, March 2003.
URS
W:!27653M13\01301-B-R.DOC\S-NOV-O3SDG
1 13
E LOZ
ZlOZ
1LO2
0 LO2
6001

Further comparison of the two remaining FAA-TAF and FAA Aerospace forecasts of future
commercial activity at the airport for 2003 through 2013 reveals similar average annual growth rates
of 2.27 and 2.76 percent, respectively. Examining the extrapolation of future commercial activity
levels using the IO-year linear trend line technique yielded a similar average annual compound
growth rate of 2.10 percent.
Based on current and near-term economic outlook for the airline industry and the absence of any
known plans to expand the existing passenger terminal facility, an average annual growth rate of
3.0percent was selected as the preferred forecast of commercial operations at the airport for the
entire forecasting period of 2003 through 2013. This straight-line forecast, however, does not
consider the potential effect of higher rates of commercial operation activity that may be generated
by a new airline entrant or the potential for increased service by carriers currently serving the airport.
7.3.8.3 Updated Forecasts of General Aviation

General aviation operations consist of arrivals and departures (and touch-and-go evolutions) by
aircraft not classified as commercial or military.
Table 1.5 and Figures 1.5 and 1.6 present itinerant and local general aviation operations forecasts
using typical aviation activity forecasting techniques along with the FAAs TAJ?. These forecasts
consist of a market share of general aviation operations to national, state, and market-specific state
operational levels, application of FAA Aerospace Forecast predicted growth rates, and a 10-year
trend line for both itinerant and local operational levels.
As the table and figures indicate, the various forecast techniques result in widely disparate results
that appear to have little correlation. An alternative approach was also used to examine factors
currently affecting general aviation activity at CRQ, California, and the US. as a whole using
professional judgment regarding how these factors may influence future activity levels at CRQ. A
review of historical levels of local and itinerant operations revealed two general trends. The first
trend is one of declining operations through the early 1990s. The second trend is one of stabitization,
then a general growth trend that lasted until 1999. From 2000 through 2002, activity levels again
began to decline in concert with issues discussed previously.
When examining the projections of hture itinerant and local general aviation activity levels using
national, state, primary and non-primary market share methodologies, the annualized growth rates
fall in the range of 0.72 to 1.36 percent. This is somewhat validated by the fact that on a national
level, the FAAs 2003-2014 Aerospace Forecast anticipates that all general aviation operational
activity will increase at an annualized rate of 1.3 percent. Inspection of the FAAs TAF for similar
activity at this airport reveals predictions of continued activity growth for 2003 through 2013 in the
range of 1.8 percent for itinerant operations and 2.5 percent for local operations. When examining the
10-year linear extrapolated trend line of past operations that have occurred at the airport yields a
much higher growth rate of 2.4 percent. This extrapolated trend assumption is more in line with the
FAAs anticipated growth rates for this sector on a regional and national level.
URS
W \27653003\01301-B-RDOC\SNOVJJ3\SDG
1- I 5
Auiation Actiiuit~Forecast
Table 1.5
GENERAL AVIATION OPERATIONS FORECASTS
Itinerant General Aviation Operations Forecasts
TAF Forecast of
CRQ 10-Year FAA Aerospace
California
California
California Non- Trend Line2
2o03,
Market Market Primary Market Primary Market
Share
Share
Share
Share
Year
CRQ
I
2002
129.102
126,277
126,277
126,277
126,277
126,266
126,277
2003
131,664
127,520
127,638
128,114
127,518
147,988
125,898
2008
144,356
133,484
134,434
137,312 .
133,703
151,I
50
135,358
2013
157,068
139,454
141,231
146,516
139,889
154,311
144,388
2002-13
1.80%
0.91%
1.02%
I.36%
0.93%
1.84%
1.23%
2002
62,816
62,774
62,774
62,774
62,774
62,918
62,774
2003
64,618
63,195
63,283
63,562
63,247
74,914
62,962
67,505
65,581
78,239
67,627
67,916
81,563
72,138
0.72%
2.39%
1.27%
2008
73,629
65,804
65,570
2013
82,640
67,947
2002-13
2.52%
0.72%
71,448
68,326
0.77%
1.18%
These various forecasts, however, do not consider potential dynamics or paradigm shifts of genera1
aviation activity that may be influenced by but not limited to the following actions or developments:
0
0
0
0
0
0
0
URS
Increased levels of based aircraft at the airport.

Loss of based aircraft to other nearby airports.
Development of amenities and related services for larger corporate jets.
Competitive fuel pricing.
Escalation of the price of aviation fuel.
Unforeseen changes in the economy.
Development of one or more locally based corporate jet fleets.
Increased runway length.
W:127653003\01301-&R.DOC~NCN-O3\SDG 1-1
coz
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SECTIONONE
Aviation ActzvCtY Forecast
The potential for general aviation operations at CRQ to increase in future years will most likely
depend on the operating decisions of specific businesses at the airport, as well as development
decisions of the owner/operator of the airport, the County of San Diego.
For the express purposes of this FAR Part 150 aircraft activity forecast, annualized growth rates of
2.0 percent for itinerant general aviation operations and 2.5 percent for local general aviation
operations were selected as the preferred forecasts of general aviation operations at CRQ for the
entire forecasting period of 2003 through 20 13.
7.3.8.4
Updated Forecast of Military Operations
The number of operations conducted by military aircraft usually depends on training requirements of
the Units using CRQ. Consequently, the level of operations varies from year to year with little
predictability. Therefore, the FAA usually projects military operations at an airport to remain flat or
near the most recent historical level throughout the forecasting period. This is also the recommended
method to project military aircraft operations at CRQ. The recommended forecast of military aircraft
operations at CRQ throughout the forecast period is 1,892 itinerant and 72 local operations.
7.3.8.5 Resultant Average Annualized Growth Rates

To develop a complete synopsis of anticipated levels of aircraft operational activity at the airport, a
wide variety of aviation activity forecasts previously developed by others was collected, compiled,
and reviewed. Such forecasts included projections developed as part of the FAAs national, state, and
airport-specific TAFs, the FAAs FY 2003-2014 Aerospace Forecasts, and CRQs 1997 Master Plan.
As part of reviewing the FAAs TAF projections for California, two sub-categories of the aircraft
operations projections for the state were compiled based on the FAAs National Plan of Integrated
Airport Systems (NPIAS)airport classifications system of Primary and Non-Primary airports. The latest
N P I A S lists CRQ as a Primary Airport. Using the state, Primary, and Non-Primary classifications,
separate summations of TAF operational projections for the respective airports were created to examine
market-share projections of future aircraft operations at CRQ. A 10-year trend analysis using linear
projection techniques was also used for further comparison to all other forecasts.
A comparison of the various projected average annual compounded growth rates for each respective
forecast is presented in Table 1.6.
1.3.8.6
Forecast of Total Operations
Applying varying average annualized growth rates to the 2002 aircraft operational totals, a preferred
forecast of aviation activity for the CRQ FAR Part 150 Study Update was developed for the 10-year
forecast period of 2003 through 2013. For this forecast, itinerant commuter operations through the
forecast period were projected to increase at an average annual growth rate of 3.0 percent. Itinerant and
local general aviation operations were projected similarly using growth rates of 2.0 and 2.5 percent,
respectively.
The preferred FAR Part 150 forecast for total aircraft operations, including scheduled passenger
airlines, general aviation, and military, is presented in Table 1.7.
URS
W:V7653003\01301-B-R.DOC\SNOV-03\SDG
1- 19
SECTIONONE

Table 1.6
AVERAGE ANNUAL
COMPOUND GROWTH RATES
2003-2013
Forecasts
I
I
URS Preferred
CRQ TAF
10-Year Trend Analysis
3.00%
2.27%
2.10%
2.77%
1.44%
FAA Aerospace Forecasts
1997 Master Plan UDdate

All US Airports
All CA Airports
CA PrimawAimorts
Itinerant General Aviation

Operations
Commercial Operations
~ANon~imaw~imorts
1.70%
1.52%
1.74%
0.66%
I
I
2.00%
1.78%
0.41%
1.37%
1.26%
2.50%
2.49%
0.85%
1.36%
0.33%
0.90%
1.02%
1.35%
0.93%
Local General Aviation

Operations
0.73%
0.77%
1.18%
0.71%
SOURCE
URS Corporation, 2003
Table 1.7
AIRCRAFT OPERATIONS PREFERRED FORECAST
Itinerant Aircraft Operations
Year
2002
2003
2008
2013
2003-13
Commuter
General
Aviation
13,140
13,534
126,277
128,803
15,690
18,189
3.0%
Local Aircraft Operations
Military
TOTAL
General
Aviation
Total
1,892
1,892
141,309
62,774
72
62,846
144,229
142,208
157,010
1,892
1,892
159,790
177,091
64,343
72,799
82,365
72
72
72
64,415
72,871
82,437
232,661
259,528
2.0%
0.0%
2.1%
0.0%
2.5%
2.2%
2.5%
204,155
208,644
SOURCE
1.4 COMPARISON OF FORECASTS

When developing a forecast, it is helpful to compare the preferred forecast to the FAAs TAF
forecast published specifically for the airport. As presented in Table 1.8 and Figure 1.7, the preferred
URS
W:\27653003\01301-&R.DOC~NOVO3\SDG
1-20
SECTIONONE
forecast is approximately 20 percent below the TAF forecast of commercial operations at CRQ and
over 10 percent lower than the TAF forecast of itinerant and local general aviation operations.
1.4.1 Commercial Operations

Inspection of the FAAs TAF for CRQ reveals that the largest projected increase in commercial
(commuter) operations was to occur between 2002 and 2003. Referencing the FAAs ATAD data for
the first six months of 2003, it is evident that the year-over-year annualized growth rate of 35 percent
for commercial operations has not materialized. In fact, commercial operations at CRQ have
increased at a moderate rate of only 5 percent. This TAF projection anomaly will have the direct
effect of projecting higher operational levels for the 10-year period of 2003 through 2013 and is
therefore considered unrealistic for this forecasting effort.
The comparison of the preferred 3.0 percent average annual growth rate of commercial operations
growth to that of the CRQ TAF is shown in Table 1.8. As illustrated, the projections of commercial
operations throughout the 10-year forecast period vary by as much as 19.0 percent.
1.4.2
General Aviation Operations
Similar to the FAAs TAF for general aviation operations at CRQ, the projected increase in local and
itinerant general aviation operations was projected to occur between 2002 and 2003. The FAAs
ATAD data for the first six months of 2003 indicate that these general aviation operations decreased
by approximately 9.0 percent. Although operations are down approximately 9.0 percent, the
preferred annualized forecast yields operational levels are similar to the FAAs TAF general aviation
operational forecast for the same period.
The comparison of the preferred 2.5 and 2.0percent average annual growth rate for local and
itinerant general aviation operations at CRQ TAF is shown in Table 1.8 and Figures 1.8 and 1.9. As
illustrated, the projections of local and itinerant general aviation operations throughout the 10-year
forecast period yield similar results and vary by as little as 0.04 percent.
1.5 FLEET MIX FORECAST

Currently, neither America West nor United Express, CRQs two scheduled carriers, are operating
regional jet flights at CRQ. It is anticipated that both will shift to regional jet aircraft in the future.
However, the likelihood of regional jet operations at this airport will be dependent primarily on
overcoming existing runway length constraints while satisfying FAA-mandated runway safety area
design requirements. At its current length of 4,900 feet, use of larger regional jet aircraft having
higher approach speeds and wider wingspans may require modifications of current FAA design
standards and/or limiting the operational weight of the aircraft on departure.
URS
i
W \27653003\01301-B-R.DOC\5NOV-03\SDG
1-21
SECTIONONE
Aviation A
m
t
y
i Forecast
Table 1.8
COMPARISON TO FAA TAF AND
URS ADJUSTED TAF FORECAST
SOURCE
FAA 2002 Scenario TAF, March 2003.
NOTE
'2002 actual commercial operations.
URS
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SECTIONONE
Aviation Activsty Forecast
CRQ has addressed existing non-standard runway safety area issues by using declared distance
criteria and applying slight increases in published landing visibility minimums for its only precision
instrument approach to the runway.
If the runway was extended to accommodate the full landing and takeoff runway length requirements
for todays regional jets (a minimum of 5,500 to 6,000 feet) while satisfying FAA runway safety area
requirements, introduction of regional jets at CRQ would then offer additional city-pair opportunities
while increasing the level of service to air travelers using CRQ.
Assuming that there are no imminent plans to extend the runway or to modi6 CRQs existing
geometric design as necessary to accommodate sustained operations by larger aircraft having
Airplane Design Group C-I1 operational requirements, the commercial commuter fleet mix for the
two future forecast years was left unchanged. This projected general aviation fleet mix may change,
however, if one or more of the following events occurred
0
0
0
Increase of based corporatejets.

Migration of light single- and multi-engine based aircraft to other nearby airports.
Increase of the airfield geometry (runway centerline-to taxiway centerline separation).
Provision of fully compliant runway safety areas.
Projections of fleet mix at CRQ are presented in Table 1.9.
Table 1.9
FLEET MIX FORECAST
INM Aircraft
2003
Type
Itinerant
Local
2013
2008
TBG
Itinerant
Local
T8G
Itinerant
LEAR35
20%
20%
20%
MU3001
12%
12%
12%
GllB
1%
1%
1%
CL601
1%
1%
1%
DHC8
12%
12%
12%
EMB120
31%
31Yo
31%
DHC6
URS
1%
I
I
1%
5%
1%
Local
TBG
W:\27653003\01301-b-r.doc\S-N0~-03\SDG
1-26
,--
SECTIONONE
Aviation Actiwitv Forecast

Table 1.9
FLEET MIX FORECAST
(continued)
URS
W:\27653003\01301-br.doc~Nov-03\SDG
1-27
.
SECTIONONE
Aviation Actiuitv Forecast

Table 1.9
FLEET MIX FORECAST
(continued)
INM Aircraft
Type
2003
Itinerant
2008
TBG
Local
itinerant
2013
Local
T8G
Itinerant
c-9
9%
9%
9%
G2
9%
9%
9%
c-12
CH-53E
OH-58
H-60
I
I
45%
19%
9%
9%
I
I
1
I
100%
45%
19%
I
I
I
I
100%
I
I
45%
9%
19%
9%
9%
9%
Local
I
I
TBG
100%
SOURCE
URS Corporation, 2003.
NOTE
'Runway and Safety Area improvements may lead to commuter fleet conversion to regional jets.
URS
W:!27653003W1301-b-r.doc\5Nov-03\SDG
1-28
REPORT
MCCLELLAN-PALOMAR
At RPORT
FAR PART150 STUDYUPDATE
PRELIMINARY FORECAST OF
AVIATIONACTIVITY
PREPARED FOR
MCCLELLAN-PALOMAR
AIRPORT
URS PROJECT No. 27653003-01301

REVISEDNOVEMBER
5,2003
Supervising Real PruperyAgent
Jury 30,2U04
BOTfwU
A February 2000 appraisal by Alan Wilson, MA], of Alan Wilson & Associates for
Bonego Valley Airport aviation land. condtlded rent should be $225 per acre per
month for gruund rent. It also concluded that rent for parcef 34-03514,which
included a 5,578sq. ft. hangar building, shouM be $815 per month (Attachment
1, Bmega Appraisal 2000). Current ground rent ranges f r m between $225 to
83 per acre per month, The hangar building is leased out to four tenants at
$300 per hangar per month, for a total of $1,200 fur the parcel.
Fallbrook
In July 1998, Alan Wilson, wIA1, of Alan Wilson 4 Associates appraised aviation
ground rent for Fallhook Community Airpark at $300 per acre
Januasy 2001 update by Mr,Wilson revised the rate to $325 per
(Attachment 2, Faitbrook Appraisa
Leases that have been negotiated
to $305 per month, An existing
over the last several years range f
base w6i-1Fallbrook Air Sem*~0
is at
r acrs per month and will be brought
up to market as soon as possible, as addwBsd later in this report.
Gillespie
G'tllespie Aviation rates were Sast negotiated in 1996. Up until then, leases were
renegotiated every 5 years,with 2 or 3 mining due each year. It was difficult to
maintain comparable and competitive rat- with this method. As part of the
negotiation process, the Counly acquired an appiaisd by David J. Yerke, MA1
fA8~ichment3, Ciflespie Appmlsaf 1996) which concluded 'the rent for vacant
land shouid be $7,500 per acre per year ($625 per acre per month). The County
then negotjated with the Cillsspie Airport Lessee% Association (GALA) to set a
sfandafd rate for all aviation lfxises at GiUsspie Field. GALA conducted its awn
research and provided a report detailing perceived inaccuracies in the Yerke
appraisal (Attachment 4, GALA Response 1996).
The Counfy agreed to a rent schsduis that set the rnontkdy rent at $400per acre.
The agreement also provided for cost of living increases .every 30 months
(cqyml at 3% maximum) based on a CPI index. At the same time lease
language was updated to be more favorable tu the County regarding Late Rental
Payment, Assigning Subletthg and Encumbe

Improvemenb, ~ ~ n d i ~ c ~ m i ~
Smur'rty
~ t i ~an
n,
5,1W6 Rental Adjustment Board Letter)#
effect of reducing risk to the County m d a1
the leases. This agreement also achieved the goal of getting at1 Gillespie Field
aviaaon lessees on the same market adjustment schedule, which reduces staff
time and appraW fees and increases fairness by providing a more level playing
field. The rate schedule is in e k c t until 2010, at which time it will be
renegotiated to Fair Market Value ( W V ) (Attachment 6, Sample Giliesple
Fbld Rental Ciause). Current rent for Gillespita Field aviation !eases isapproximately $462 per acre per month.
Palomar
In August 2000,an appraisal by Alan Wilson MAJ, of Alan Wifsan lk Associates,
set the McClelfan Palomar Airport rent for landfitl impacted land at $1,100 per
acre per month and, non-landfill impacted land at $1,450 per acre per month
(Attachment 7, Patomar Appraisaf 2000). Since then, all aviation teases at
McCletlan Palomar Akrport have been adjusted to this rata. AdditianaSly, a March
2003 appraisal by Alan Wilson and Associates sets rent for non-landfiif impacted
$and at $1,850 per acre per month
nt 8, P&x'nar Appraisal 2003).
Leases that have been negotiated since that date have h e n at this new higher
rate. Bscause cost of living increases becrorne effsctiVe at different times, the
result is a range for non-landfil impacted land of betwwn $1,450 to $1,690 per
per acre per month and
acre per month. Landfill impacted land remains $1
all teases on this type of land are between $1,100 and $1,125 per acre per
month.
REI~QWS
An Augusf 2000 appralsaf by Alan Wilson, MA!, of Aim Wilson & Associates set
aviation ground rant for Ramona Airport at $675 per a m per month
(Attachment 9, Ramona Appraisal 2000). All three existing FSO's were duo for
negotiated rant adjustments and were at approximat@ $205 per acre per month.
tt was determined that an increase of this size would be a hardship to the
established businesses. Therefore, it was decided &(at: the rent would be
stepped up to $625 over a 5 year period. Rental
s currently range between
$392 and $435 per acre per month and are s h e d
b be af$675 per acre per
month in approximately 2 years.
Current Lease Negotiations

The sample rental adjustment clause from the County standard lease form is
inciuded'as an attachment to this report. (Attachment 10, Sample Rental
Adjustment Cfause from County Standard Lease Form).
on, some leases for existi

re
witis new 30
Qisgo County Leaslng P

Leasing Fractfces). T
p m j w ~isnd payment to the County for the postpan
interest in the leasehold improvements. In these s*hationsexisting tenbeen dlowed to stay with tMs sch&uls until 2010 in order to
praying field. This allows es-tabiished businesses to continue
additional capitat improvements to supply needed aircraft
additional casfi to be used for Airport Enterprise Fund expenses.
have
Future Rental Rate Adjustment Opporbmities

Borrego
Borrego rents are at or above FMV. Future negotiated rental adjustments t a b

place in 2005 though 2009, These adjustments will either be based an appraisat
or, because the cost of appraisal may not be covered by antkipatad additional
revenue, estimated using the last.apprais& and Consumer P r b I
The hangar leases are for one year term and terminate approxima
2004.. They will bie offered for renewal at rates adjusted based dn the CPI,
FalIbrmk
FaJlbrmk Community Airpark aviation leases are mostly at FMV, ranging
between $300 and $325 per acre per month. An existing tease with Falibrook Air
Sewice is below market at $132 per acre per month. The lease provides for
annual cost of fiving increases with mark& adjustments every five yearn, This
lease is overdue to be brought up to market and will be adjusted as s
as po~rsiblsusfng the 2001 appraisal. 7ha next round of ne
ments wilt be from 2007 to 2012 and the County wiII get an updated
appraisal six to twelve months in advance of the next adjustment and us8 that for
the basis to propose a new rate.
Glllt3Spk
fn 2010 the current Gillespie Field Aviation leases are ail scheduled for
negotiated adjustments. The County wifl conduct a new appraisal six to twelve
months in advance of the first adjustment. An appraisal by Mr. WiEson in March
of 2003 concluded ground rent for Gillespie Field Aviation leases would be
$1,100 per acre per month. This raie has yet to be used at Gilespie Field. In
August 2005 the current long term lease on the Cajon Air Center parcel will
terminate. Additional time may be needed for environmental wurk before it is
ready to devekp and the County conducts Requests for Proposals for aviation
development There is a significant amount of interest in this property and it is
an2icIpated that proposals wit! be at FMV and will help to establish a hew aviation
rate in advance of &he 2010 negotiations.
Page 4 of 5
July 30,2004
Leaws with existing tenanis that are in compliance with

requirements and
rstriction rtnes still qualify & be r 8
current schedufe
201.0 and adjust to FMV at that time.
nt requirements most be met to qualify for a new
improvement and
lease..
ar Aviation rates are all at FMV. The next rentai adjustments will be
between 2006 and 2 . This County will get an updated appraisal sk to W e b
mmths in advance
next adjustment and use that for the basis to propose st
new rats. The County recently renegotiated a new 30 year lease with Magailan
Aviation and used the March 2003 appraisat, adjusted by CPI, to establish the
new rate of $1,678,87.
Ramona
By June 2006, an FBO's a t Ramona Airport will be at $675 per acre per year,
which is FMV based on the September 2OOO appraisal. However, there haw
been many improvements at Ramona Airport and a new appraisal may show
an~ther substantial
ase. Negotiated adjustments are due again in
November 2006 W o u
ugust ZOO?. Additional&, the CdRamia Department
of Forestry (CDF) h
t i at Ramona Airport. A new lease was negotiated
with CDF pdor to the August 2000 appraisal and was based on the previous
standard rate d $200 per acre per month. The agrsemsnt provided for landing
fees and cost of
increases. It is currentty at approximately $232 per awe
per month. Tbe
ent does not include any negotiated rental adjustments
but includes a cula adjustment based on CPI with a cap of 25%. The County wilt
try to bring this bass to F W at the first available opportunity.
The attached list of County Airports Aviation Agreements (Attachment 12, County
rts Aviation AgwmenW) includw the current termination dates, next negotiated
I adjustments, current monthly rent and current rental rate pet acre per month.
, guidelines for
to ctarify the procedures for negotiated rental adjust
cunentIy being
ntation wi21 be included in the Rules and Regulations th
bped by Sherry Miller, Principd Airport Manager. A draft of the County AirpQttS
Rules and Regulations will be sent to AWP by October 30,2004 for your review.
Attachments:
Attachment 1, Borrego AppraisaI 2000
Attachment 2, Fallbrook Appraisal 2001
Attachment 3, Giflespie Appraisal 1996
bment 4, GALA Response 1996
Attachment 5,1996 Rental Adjustment Board Letter
Attachment 6,Sarnpte Giflespio Field Rental Clause
I
.
. .
I
1
.
..
The purpose of thisa p p d d was to estimate market rent. Market rent is defined as:
.i .
1
I
1 . .
..
I
'
I
I
I
1
1
f
I
I
t
I
f
I
I
I
I
I
I
1
- .
.i
;. L
I"
I
1
I
I
I
1
I.
I
I
I
I
f
I
i
II
I
1
a 8: Palomar
~ h Appraisal
~ ~ 2003
~ ~
RESTRICTED APPRAEAL REPORT
T h e purpose of this appraisal was to estimate mark&sent. Market rent is defined as:
"&e renrai income that a property wmld most probabEy cmmartd in ihe open w&;
indicuted by the current renb paid and nsked for comparable space as ofthe date ofthi?
appraisal. '*
INTEREST VbLUED:
,/
Leased fee
RATE OF VALUE:
'l%e*eEdve-&teof value is March 3,2003
The W of G s report is March 7,21003
L O P m m AM, REPURTING PROCESS

XEm APPRAISAL):
HHXXEST AND BEST USE:
Conelasion oMarW Rent by Direct Comparison
Baed on the:prwedhg, amarket reat of $1,650 pex acre per manth is concluded as a reasonabze
grad r a t for the subjectparcel, It should be noted that ahport sponsors may legally charge
difkrexit rzita for diffmnt parcels at aiiy given airport. For example, t b q could charge less for
larger parcels, or for parcels wjthout direct taxiway access. In wMty, however, rates m
typically applid uniformly for teasehold parcels regardleis of physical W i n c e s . This is
became ofsponsors' fears of running contrary to FAA's "fairaess"language when it comesro
rates and charges.
Otbber Considerations
ded in their poflcies toward commercial versus

survey respondents w a x about
m g e tenants (Le. those who would lease land and build hangars fix sub-lease). Abuut haffof
the respundents said that ~ 0 r n e r c J atl m s wtrnld be charged more (hsome cases doullle) at
tf3e5drportsthan stomgete:nants. NearIydf ofthe respondents said that parcel dze and locadm
on the airport made little or no &ffererencce in setting ground rent Many stated that their
interpretations of FAA *fahessn rquircrnats did not permit them to charge: different raiM
rates based on physical or lucational charaicterisa"cs,
Attachment 11: San Di o County Airports

1
Leasing Pr
SAN DIEGO COUNTY AIRPORTS

LEASING PRACTICES
The leasing of County Airport land is regulated and influenced by Sbte and Federat
Law including the paiicies of the Federal Aviation Administration (FAA), the Gounty
Administrative Code, formal Policies adopted by the County Board of Supervisors
(Board), input frbm community advisory boards, and by past decisions of the Board.
This paper summarizes curtent Airport leasing practices.
Ail teases in excess of ten years and leases where the rent
month require #e approval of the Board of Supervisors. The Board
ndrnents to such leases. Certain authority over leases is
the Director, Department of Generat Services (Lease
d authority indudes the approvat of leases for t e r n not
tbe rent does not exceed $5,000per month. The Lease
to lease assignments, financial encumbranem and
subleases, except whem extraordinary circumstances may warrant review and appmvd
by the Board. The Manager, Airportflransit (Airporl Rirfxtur) may consent to shortere the term does not exceed one ysar.
term airport use perm
1 and Uses.
r emergency landing strips in the rum1 East County, master plan
or community #fan documents, in conjunction with enuironmenta! impact repart
dscuments, have &en developed, and are perkx4cally updated, for at1 County Airports.
These are reviewed and approvrPd by the FAA, the San Diego Association of
Governments (SAPJDAG) which is ?he regional airport authority, locat cities having
jurisdic#im, and the Board, following a pubtic review and input process. The master
pian or community pian then serves to guide Airports staff and the Board in making land
use leasing decisions. The lease document (descnied in more detail, below) wlS1
specify &lowed uses of airport land and any restrictions on use which may appiy.
It is generally the Couny's policy to solicit cornpetitbe

property is available for lease to private parties, County
Airport property may, however, be leased without seeking competitive proposals. in
practice, this is only done where there is a surplus of astport land available for le-,
and when nut more than one party has expressed an interest in leasing a particular
parcet of land. E
n some instances, lessees leasing land which adjoins a vacant parcel
Prepared by Lee Ann tardy
Page 1 of 3
Supervising Real P
July 30,2004
Attachment 3 1
San Diego County
will b @giventhe first oppothJniay tu lease &e adjoining patcei, but again, only when
m third parties.
n no qrewion of in
To allow the County the greatest flexibility in making land use
as8 terns are gsneraill'y limited io the shortest tern possible.
m teases are, granted for the minimum number of years
a kssee to amortize, and receive a reasonable return on, the leprovements. Historically, Airports has gmnwd one year of
invested, per acre ~ lleased
'
b d , with a mrudmum term for
ars. Accordingly, to qualii for a thitly-year tern on a 5-acre
to invest $750,000 in approved leasehold improvements
x 5 m:es x 30 years = $750,000): Leases where there is nu invsstmenf by the
ept on 8 month-to-month basis. The $5,00Q per acre, per year
the length 04 lease term is a minimum requirement. Virtually all
d on Cuunty miation land within the past ten years have
investment requirement. Lease terns for industrial-zoned
and other mn-avhiirzn use properties, may have different investment
shorter rnarcimlrrn lease terms available to mfom with
. It-isa policy of the Board of Supervisors and a requirement OF the
Airports receive fair m

XF market value usualfy starts
nags%ationsbetwe
emnt. TbeCounty
value when leasing its airport land.

an appraisal requisitioned by Airports,
lessee of pro
Iwsee to
a rental based
return on
, golf driving ranges and certain
ally resutt in rentals based on a percentage of the lassem's gross
income, 85 *is js customary for such teases. Periodic rental adjustments based on
reappraisal are typically negotiated each five years for a long-term tease, and not lass
nine years by policy of the Soard. Rental Adjustments based on the
rice Index are usually required between the negotiated rental adjustments.
contracts are intended to transfer to

sion and control of real property,
I laws and regulations, including
those pertaining to the use, storage and disposal of hazardous materiais. Standard
Airport Iease contracts are written and/or approved by County Counsel. Lease
language is periodically updated to reflect changes in red estate taw and to mwt
changing economic and other risks associated with the ownership of land. During the
term of a lease, base amendments may be agreed to between the parties to effect
ciianges to the rent or other economic !ease provisions, or to update antiquated lease
language which no longer protects one or b t h of the parties as originalty intended.
Prepared by Lee Ann Larcfy

sing Real Property Agent
nt\r 1 aacinn
Pm&i
Page 2 of 3
July 30,2004
tructioro of required lea
i
-4
of County Airports $0 negotiate far lease

available for lease, and when there has been
na expression of interest by
s in bidding on the particular parcel of land
covered by the expiring lease.
, all County aviation leases provide that at the
end of the lease the improvemmts will become the property of the County regardies of
who ordginaity installed the improvements. If a lease is extended prior to the expiration
ent far the present vaiue of its reversionary interest
interest is referred to as Equity. The amount of
8 value of the improvements 8s af the end o
f the lease,
ent value. A variety ofappraisal technjques may be
volved to arrive at a Y&LI@ acceptable to both
will permit an amortfzation of the equity it is
months not to exceed approximately 50% of the
the County's equity interest by the lessee,
r2izati~1,
may be counted as part of the investment
requirement in estat>iishing the length of extended term, as discussed above under
Len& of Leas0 Term.
_-
Prepared by Lee Ann Lardy

Supesvising Real Property Agent
Page 3 of 3
July 30, 2004
Page 1 of 2
General Aviation News
Articles by Meg Godlewski

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1/28/2005
One man's development is another man's grounds for objection.
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A $30 million redevelopment project at McCIellan-Palomar Airport (CRQ) in San Diego

is under way, but the dozens of pilots displaced by the project have not dropped their
complaint alleging that the development is designed t o push general aviation interests
off the field.
Columnists
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Janice Wood
Last September, pilots and airport business owners filed a Part 16 complaint with the
FAA after they were given a 30-day notice to vacate their hangars so that 40
Eisenhower-era wooden buildings could be torn down. County airport officials assert
the old hangars, which had sagging walls and doors, did not meet current building
codes.
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Several businesses, including Pacific Coast Flyers, a not-for-profit flying club, were
displaced by the project, as were more than 100 GA aircraft that call the airport
home. I n the complaint filed with the FAA, the business owners and pilots allege the
remodeling project was conceived and executed "secretly" and that it is causing
"imminent economic displacement and physical destruction" of several businesses and
the forced relocation of more than 150 aircraft.
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"The tenants had been on a month-to-month lease for 10 years," states Richard Sax,
president of Palomar Air Center. "They knew this development was coming. We are
the lease holder and we are exercising our rights under the lease. There was nothing
secret about it."
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The pilots allege the redevelopment is geared toward providing hangar space for
corporate aircraft that are currently based at the airport.
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The developer disagrees with the charges.
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Palornar Air Center, the company behind the development, intends t o build new metal
hangars with electric lift doors, fire sprinkler and security systems, and treated floors.
Additional waterlines will be installed and utilities will be placed underground. Rent for
the new buildings, obviously, will be more than tenants paid for the old ones.
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"Nineteen business jets are displacing 150 general aviation aircraft," said Matthew
Goddard, founder o f the flying club. "The airport doesn't care about the little guy."
Sax disputes the assertion that the development is for jets only.
"There is nothing that says this development is for just jets," he says. "Space is space
when you are looking for someplace to store your aircraR," he said, noting that a
flying school with 18 small aircraft is one of the future tenants. "I also have a 30-year
lease with a man with four partners. They all have small planes, all with reciprocating
engines.
They will own their own hangar for 30 years. I t is the difference between renting an
apartment and owning a condo."
San Diego County Airports Director Peter Drinkwater noted that officials were working
with displaced pilots t o help them find tie-down space elsewhere on the airport or a t
http://www.generalaviationnews.com/editorial/articledetail.lasso?-token.key=
1 10428~-toke..
. 3/24/2005
Page 2 of 2
General Aviation News
other airports in the county during the two years construction is slated t o take place.
"Some of us can't relocate," countered Goddard, who noted the flying club is using
temporary tie-down space. "The club doesn't have that luxury because everyone
associated with the club is here. I f the club relocates, it dies."
Goddard is skeptical of the county's claims that GA parking space will be created on
the north side of the airport.
"They didn't even talk about it until we made a stink about being relocated," he says.
"There are no guarantees or assurances that they will build parking for us. Why didn't
they build it first so we had some place t o go?"
According t o Drinkwater, the county did not have the permits for the parking area
when the development began.
"We are in the design phase," he said. "A large GA ramp should be completed by fall
o f 2006. We have a timing problem, not an incompatibility problem."
For the plaintiffs, the redevelopment amounts t o economic discrimination, and they
allege it violates FAA grant assurances.
As this issue was going to press, the FAA was still investigating the complaint.
"Grant assurances vary from airport to airport," said Marcia Adams, FAA
spokesperson. "We look at the situation t o ensure there is reasonable access to an
airport." Adams could not comment on the situation at Palomar because the
investigation is ongoing. "If anyone feels they have been denied access, there is a
venue for them bring it to our attention."
If
an airport is found to be in violation of grant assurances, repercussions can vary
from a letter of reprimand t o losing its eligibility for FAA funds.
In the meantime, the construction continues.
"The grading has been completed and we expect to be pouring concrete as soon as
the rain lets up," said Sax. "We are at two-thirds capacity now and we don't even
have steel in the air."
For more information: 760-431-4646.

h t t D :/IC0 .Sa n-Diego.ca .us/dDwlA irports/ mcpal.htm
General Aviation News 800.426.8538

P.O. Box 39099
Lakewood, WA 98439
comments@GeneralAviationNews.com

U S DOT FAA - Director&#39;s Determination (Sent)

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U S DOT FAA - Director&#39;s Determination (Sent)

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US.

Office of Airport Safety and

800 Independence Ave.. S.W.

UNITED STATFS DEPARTMENT OF TRANSPORTATION

FEDERAL AVIATION ADMINISTRATION

Pacific Coast Flyers, Inc., Donnya Daubney d/b/a Carlsbad

County of San Diego, California,

FAA Docket No. 16-04-08

THE AIRPORT AND ITS OBLIGATIONS

cARLsBAD/MC CLEW-PALOMAR (CRQ)

CRQ Grant History

FAA Exhibit 1, Item 15

ISSUES UNDER INVESTIGATION

FAA Exhibit 1, Item 1, p. 3, FAA Exhibit 1, Item 5 , p. 6.

FAA Exhibit 1, Item 1, p. 3-4, FAA Exhibit 1, Item 5 , p. 6-7.

FAA Exhibit 1, Item 1, Attachment 2, FAA Exhibit 1, Item 5, p.7.

FAA Exhibit 1 , item I , Attachment 7.

FAA Exhibit 1, Item 1 , Attachment 10.

FAA Exhibit 1, Item 1, Attachment 18.

FAA Exhibit 1, Item 1, Attachment 18.

FAA Exhibit 1, Item 1, Attachment 19.

FAA Exhibit 1, Item 1, Attachment 20.

development, will not be ready for nearly two years.71

FAA Exhibit 1, Item 5, p. 17, FAA Exhibit 1, Item 1, p. 17.

1, Item 1, Attachment 43.

VI. APPLICABLE LAW AND POLICY

The Airport Improvement Proeram and the Airport Sponsor Assurances

The FAA Airport Compliance Propram

Enforcement of Airport Sponsor Assurances

D. The Prohibition Apainst Exclusive RiPhts - Grant Assurance 23

The FAA's Policv on Minimum Standards

Economic Nondiscrimination Public Use of the Airport) - Grant Assurance 22

G. FAA's Policy Reparding Airport Rates and Charpes

H. Grant Assurance 35 Relocation and Real Property Acauisition

Grant Assurance 5, Preservinp Riphts and Powers

See Policy, found at 61 Fed Reg. 3 1994,32021; http://www.faa.gov/arp/pdflxt/ratesl

Grant Assurance 29, Airport Layout Plan

ANALYSIS AND DISCUSSION

1. Compliance with 14 CFR Part 16.21(b)

2. Compliance with 14 CFR Part 16.310)

See Background section f this determination.

See 14 CFR Part 16.23 6).

The following list of Defenses were raised by the County

challenge under 14 CFR Part 16 on behalf of other tenants or businesses at CRQ.

FAA Exhibit 1, Item 5, p. 21.

FAA Exhibit 1, Item 1, Attachment 18, p. 1.

Issue 1 - Exclusive Rights

FAA Exhibit 1, Item 5 , p, 22.

FAA Order 5190.6A, 3-9 (c)(2).

from the airfield side to the land side of the

FAA Exhibit 1, Item 1, Attachment 7.

Request for Proposal (RFP)

Last Parcel of Land

Conclusion of Exclusive Rights

Issue 2 - Grant Assurance 22 - Economic Nondiscrimination

Part 1 - Availability and Reasonableness

The Role of the 1997 Airport Master Plan

FAA Exhibit 1, Item 1, p. 22.

Annual Itinerant Operations

Annual Local Operations

FAA Exhibit 1, Item 1, p. 4-5, FAA Exhibit 1, Item 5, p.8.

FAA Exhibit 1, Item 1, p. 7 .

Actions to Accommodate Existing Small Aircraft

1, Item 5, Attachment 12.

U S DOT FAA - Director's Determination (Sent)

U S DOT FAA - Director's Determination (Sent)