Hangar Construction at America’s Airports Background

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Hangar Construction at America’s Airports
At America’s airports throughout the country airport operators have great leverage in dictating the terms of a particular lease for a potential tenant seeking to build a facility at an airport. In some cases, airport operators will only offer short-term leases for aircraft owners seeking to build an aircraft hangar. People wanting to build a hangar are often required to sign agreements that would allow the airport to retain the structure at the expiration of the lease. What results is a situation where an aircraft owner builds a hangar at his or her own expense, only to have the airport confiscate the property a short time later. The national average length of lease is 10 years, far too short for the builder of a hangar to amortize the investment on the structure.
This practice has resulted in long waiting lists for hangars in some areas. In the mid-Atlantic region, there is a 10-year waiting list for aircraft owners seeking hangar space. The waiting periods are so long because no one is willing to invest in the construction of a hangar that will be confiscated by the airport authority in a short period of time. As a result, growth in the general aviation industry is being suppressed at a time when it should be encouraged.
In the 2003 FAA Reauthorization Act, Rep. Steve Pearce (R-NM) fought to include language that would require an airport authority to offer a long-term lease to a person seeking to build a hangar at an airport. That particular provision was eventually adopted, but the term “long term lease” was not defined. The current law states:

  • If the airport owner or operator and a person who owns an aircraft agree that a hangar is to be constructed at the airport for the aircraft at the aircraft owner's expense, the airport owner or operator will grant to the aircraft owner for the hangar a long-term lease that is subject to such terms and conditions on the hangar as the airport owner or operator may impose.

Rep. Pearce has introduced legislation, H.R. 1117, which would define “long-term lease” as at least 75 years. The legislation would also require the airport to compensate the lessee of a hangar should the structure need to be moved or destroyed as a result in a change of the airport’s development plan.

Action Needed

NATA strongly encourages Members to co-sponsor this legislation. H.R. 1117 would bring much-needed stability to the airport-customer relationship and allow both individuals and businesses operating at the airport to make long-term capital improvements with the security of a long-term lease. Providing this incentive for businesses to upgrade their facilities benefits both the airport and the flying public.

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