Skirting the Fence
The on-airport, off-airport rates & charges debate comes to a head — and a solution — at Scottsdale
BY John F. Infanger, Editorial Director
January / February 1999
SCOTTSDALE, AZ — There is, of course, somewhat of a Catch-22 scenario surrounding any situation in which an airport sponsor is attempting to attract corporate and commercial tenants to an airport. It is true even more so for ones with no commercial airline activity. The overriding question that circles the bargaining table is this: How much does the airport give in concessions to attract the tenant without giving away the store?
Taking it one step further: What happens when the potential tenants will actually be located off-airport? They use the runway, taxiway, and other airport infrastructure for access purposes only — while contributing an economic development impact for the community. How does airport management recoup from these through-the-fence operators the necessary revenues needed to maintain the infrastructure?
In essence, that's the dilemma officials at Scottsdale Airport here have been confronted with for years. Now, after years of debate and at times heated confrontation, they appear to have come to a solution or middle ground that seeks to appease anchored tenants, non-tenant users, and airport management's concerns regarding revenue.
Put simply, it has not been a road paved with easy answers.
Yet, the recently approved solution can serve as an example to other airports faced with the corporate tenant question, through-the-fence challenges, or both. It also serves to demonstrate the role — or non-role — FAA is willing to play in resolving conflict under these circumstances. Ironically, in an industry which often calls for the agency to back off and let it handle its own affairs, that is essentially the posture FAA took at Scottsdale. The agency did require, however, that a resolution be achieved. (It's position might be equated to the Supreme Court Justice who said he couldn't define pornography but knew it when he saw it. At Scottsdale, FAA didn't want to offer clear definition for creating a non-discriminatory environment; but it knew discrimination when it saw it.)
A bit of history
In the 1960s, as the City of Scottsdale began its development effort to become a resort community in the Southwest, officials integrated the airport as a vital tool in the process. A separate, adjoining Airpark was created to meet the demands of operators seeking more autonomy than most U.S. airports offer, in particular ownership of the land and the opportunity to operate their own fuel farms. Scottsdale, of course, did indeed develop into a vibrant resort attraction.
The airport and Airpark grew as well. However, how they grew was, in hindsight, not exactly unpredictable — a good test case for an airport management college exam, perhaps. The Airpark became a mix of first class and modest corporate facilities; vibrant and marginal commercial ventures; hangars filled with aircraft or with boats, cars, fix-it shops, and the like; some 20 separate fuel farms; and, an access control system that was at best limited.
The airport, meanwhile, saw fixed base operators come and go, with as many as three at one time and today only one, along with a full-service maintenance facility. Three fuel farms sit on airport property, and airport revenues ride the ebb and tide that comes with a resort location.
Airpark users were charged either a 5 cents/gallon flowage fee — tracked by a method of coupon use — or one-half the regular tiedown rate of an airport-based aircraft. In 1985, the inevitable occurred: On-airport operators filed a complaint with FAA charging discrimination.
... as FAA issues guidance discouraging the practice. Compliance Guidance Letter 2009-1 â€“ Through-the-Fence and On-Airport Residential Access to Federally Obligated Airports was issued by...
I have been in the aviation industry for over 20 years, and much of that time has been spent evaluating aviation real estate. I have analyzed fixed base operations (FBOs), cargo facilities, airline...