BOARD OF AIRPORT COMMISSIONERS ADOPTS NEW PROPERTY LEASING POLICY

03/06/2001 12:00 AM

BOARD OF AIRPORT COMMISSIONERS ADOPTS NEW PROPERTY LEASING POLICY

 

(Los Angeles, California – March 6, 2001) The Los Angeles Board of Airport Commissioners today adopted a new property leasing policy that applies to the four airports owned and operated by Los Angeles World Airports (LAWA): Los Angeles International (LAX), Ontario International (ONT), Palmdale Regional (PMD), and Van Nuys (VNY).

The policy will serve as a tool in fulfilling LAWA’s mission to promote and accommodate air commerce and air navigation. The new document is intended to provide a framework governing leasing and rental decisions as they relate to the development of new agreements, and as appropriate, modifications to existing agreements. It replaces the current Lease and Rental Policy, which was established in 1986.

Paul Green, LAWA deputy executive director and chief operating officer, said, "The new leasing policy provides LAWA management the ability to better address the unique business dynamics present at each of our four airports. The new policy establishes guidelines for optimal utilization and competitive allocation of the aeronautical and non-aeronautical real property assets; reasonable methodologies for allocating essential aeronautical assets; and selecting lease terms and conditions appropriate to current and prospective tenants." He added, "The new policy also will help us structure our tenant selection process and guide our decisions regarding tenant financing."

The proposal was developed with active participation of general aviation and airline representatives, as well as other tenants at LAWA’s four airports. The new policy affirms a collaborative relationship between LAWA and airport tenants, authorizes the LAWA executive director to develop "executive directives" to implement the new policy, and sets requirements for compliance reviews, and specifies leasing provisions.

General leasing provisions will:

  • Authorize commercial and non-commercial uses of airport property
  • Require uses to be consistent with airport master plans and land-use plans
  • Subject market rents to periodic adjustment by appraisal and annual indexing
  • Allow tenant and third-party investment in "essential facilities" with effective management controls
  • Generally leave maintenance and environmental responsibilities with the tenants
  • Allow replacement of aeronautical leases
  • Ensure a competitive process for non-airline tenant selection
  • Require pre-approval of assignment, subleasing, and encumbrances

Special airline premises provisions will:

  • Authorize common-use facilities
  • Measure and monitor facility utilization
  • Set accommodation, recapture, and cancellation requirements
  • Allow for proportioning space allocation

Special general aviation provisions will:

  • Require use, occupancy, and commercial activities to be authorized in writing
  • Limit fueling activities
  • Directly link term of the lease to investment
  • Establish a VNY rental index

The new leasing policy does not alter terms of any existing agreements nor change established rents or fees. The policy also does not affect noise mitigation programs or master plan processes, nor does it address concession agreements.

(NSC – 3/6/01)

 

 

 

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