This article is reprinted with permission from the May, 2006 issue of Airport Business Solutions, Tampa, FL http://www.airportbusiness.net

A Unique Land Alternative: Residential Airpark
By Mark R. Davidson, Vice President

Last month at the AAAE Annual Conference and Exposition, I attended a session in which an FAA official was addressing the future of airport funding. During the question and answer period, the issue of using land at public airports for residential airparks came up. Needless to say, the FAA official quickly dismissed the notion and said something like “homes at airports, come on now.” Although the comments and sentiments were from one FAA official, I think it summarizes the attitudes of the entire FAA.

In my opinion, residential airparks at select general aviation airports are feasible. In the right situation the development could be a potential way for an airport to increase its revenue and traffic levels while protecting the airport from unfriendly encroachment. In fact, Dave Sclair, who provides resources for aviation homeowners at www.livingwithyourplane.com, it is already happening at 30 public use airports across the country. These airports have residential airparks adjacent to the airport land and have developed through-the-fence agreements to facilitate use.

For those of you who are not familiar with the concept of a residential airpark, let me try to paint a picture. Residential airparks are usually developed on private land and contain one runway (usually grass) in which all the homeowners share in the maintenance expenses of the airfield. There are approximately 478 residential airparks in the US and they are typically located in rural areas. Except for airparks such as Spruce Creek near Daytona, FL, they usually do not contain any attributes such as navigation aids or even FBO services. The homes are typically large and contain hangars attached to the home just like a car garage. But don’t be fooled, they are not all millionaires like John Travolta. According to one survey, the majority of the homeowners at residential airparks make less than $100,000 a year and the homes average $350,000.

There are a number of ways to develop a residential airpark at a public airport. Since every airport is different, exploring all of the options is essential. One way, which has been mentioned, is permitting off-airport property to be developed, and then executing a “through-the-fence” access agreement. These agreements have historically been a non–issue for the FAA, at least with regard to residential airparks. They are generally noncommittal on the issue of “through-the-fence,” neither endorsing nor specifically prohibiting its existence at federally funded airports.

Another option would be to issue a long-term lease to a developer or individual leases for each homeowner. To my understanding, this alternative has not been done and would create considerable issues for the airport manager to overcome. Under this scenario, the airport would first have to designate non-aeronautical land on the airport layout plan (ALP) to build the airpark. Similar to an industrial park on airport property, the airport would then have to allow for long term leases (i.e., 99 years) in order for the builder to obtain financing. Even if the FAA was on-board, institutional lenders (banks, savings and loans, etc.) typically have reservations lending to facilities built on airport property. This partially stems from the idea of “sticking with what you know and understand,” but most often is associated with the difficulty in accepting the idea that the borrower does not own, and never will own, the land under the building.

The final alternative I’m going to discuss is the idea of selling the airport’s land for a residential airpark. Under this scenario, the proceeds from the land sale would st5ay at the airport to either acquire additional land where needed or to enhance infrastructure. For instance, if an airport needed land off the end of its primary runway for an extension or to enhance safety, land on the other side of the airport could be sold for an airpark. In the right situations, it would be a “win-win” for everyone.

No matter which alternative an airport manager wants to use to develop a residential airpark, I’m sure some are asking what can be done to satisfy everyone’s concerns including the FAA, airport board members, lending institutions and homeowners. The first priority should be the development of covenants, conditions and restrictions (CC&Rs). CC&Rs are restrictions governing the use of real estate that are usually enforced by a homeowner’s association and passed on to the new owners of the property. For example, CC&Rs may tell a homeowner how big the house can be or even how they must landscape the yard. In the case of CC&Rs at airports, they can be specific to the needs of the airport, like height restrictions, security and noise.

One of the components of the CC&Rs that requires considerable analysis is the compensation to the airport. On-airport tenants are predominantly responsible for paying for the operation and maintenance of the airport and its infrastructure. While some of these costs are borne by airport users through the fuel flowage fees, landing fees, etc., a significant volume comes from the airport’s tenant base. Without some type of compensation from the homeowners, they would effectively enjoy all the benefits of the airport without paying their fair share. Nothing levels the playing field like a comprehensive rate and fee structure which services to recapture the operating and maintenance expenses. Consequently, if a residential airpark is built, it would rely upon the operation and maintenance of the airport for its vitality. As such, whether on or off the airport, the homeowners must pay their way.

In summary, the next time you go to update your Airport Master Plan, consider switching your industrial park to a residential airpark. Aircraft owners who want to live with their planes are searching for alternative places to live. An airport with a paved runway and aircraft maintenance service could capitalize on the market and generate revenue, as well as gain neighbors that would want the airport to prosper.