FAA document specifies airport land sale objections

Should Sarasota-Bradenton International Airport President and CEO Rick Piccolo decide to appeal the Federal Aviation Administration’s preliminary denial to sell 31 acres of airport land to New College, and all indications are that he will, he now holds the agency’s specific objections to the deal.

Two days arter he received a letter from the FAA stating that it will not permit the airport to close on the $11.5 million deal, he received the determination memorandum from the agency's Orlando Airports District Office, which provided the basis for the decision. 

That memo was dated March 14, 2024, a full month before he was notified by the FAA.

The memo notes changes in federal law that require the FAA to revisit whether its approval is needed for certain types of airport projects and actions. The FAA Reauthorization Act of 2018, in general, limits the agency’s authority to directly or indirectly regulate an airport operator's transfer or disposal of certain types of airport land.

Exceptions include areas where the FAA retains authority are:

• To ensure the safe and efficient operation of aircraft or safety of people and property on the ground related to aircraft operations.
• To regulate land or a facility acquired or modified using federal funding.
• To ensure an airport owner or operator receives not less than fair market value in the context of a commercial transaction for the use, lease, encumbrance, transfer or disposal of land; any facilities on such land; or any portion of such land or facilities.
• To ensure that that airport owner or operator pays not more than fair market value in the context of a commercial transaction for the acquisition of land or facilities on such land.
• To enforce any terms contained in a Surplus Property Act instrument of transfer.
• To exercise any authority dealing with passenger facility charges.

Not all of those applied to the airport’s proposal to transfer property currently leased to New College, but the initial letter received on April 15 highlighted some issues, which included what it called invalid real estate comparables to determine fair market value and the existence and future plans to include residential use adjacent to airport property. 

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The letter referenced the “Section 163 Determination” document, which was not included. That memorandum arrived two days later. It specified that the FAA has authority over the disposal of SRQ property as the land was transferred from military to civilian use in 1947 under the Surplus Property Act of 1944 and, like all commercial airports, it accepts FAA funding. 

“This determination only addresses FAA's approval authority for this project,” the memo reads. “It is not a determination that the project complies with the sponsor's federal grant assurances. The sponsor (airport) must continue to comply with all of its federal grant obligations.”

Many strings attached

When airport owners or administrators, in this case the Sarasota-Manatee Airport Authority, accept funds from FAA-administered airport financial assistance programs, they must agree to a 39-item list of assurances, or obligations, that require airports to operate safely and efficiently and in accordance with specified conditions. 

With regard to SRQ, the determination memo states SMAA must continue to comply with all of its federal grant obligations, including but not limited to: 

• Grant Assurance No. 5, Preserving Rights and Powers.
• Grant Assurance No. 19, Operation and Maintenance.
• Grant Assurance No. 20, Hazard Removal and Mitigation. 
• Grant Assurance No. 21, Compatible Land Use. 
• Grant Assurance No. 25, Airport Revenue.
• Grant Assurance No. 29, Maintain Current Airport Layout Plan.
• Grant Assurance No. 31, Disposal of Land.

“For the purpose of determining whether the ALP (Airport Layout Plan) change for the proposed disposal requires FAA approval, we have determined that the proposed disposal would have no impact on aircraft operations at, to or from SRQ and would not adversely affect the safety of people or property on the ground adjacent to the airport as a result of aircraft operations,” the determination letter reads. 

“We have also determined that the proposed disposal would not have an adverse effect on the value of prior federal investments to a significant extent. Therefore, the FAA lacks the legal authority to approve or disapprove changes to the SRQ ALP to reflect the proposed disposal.”

Where the FAA does have authority, though, are areas in which the FAA determined the airport’s application to be incomplete.

• Land use: “A release request in accordance with Form and Content of Requests for Release, is required to be submitted for the property in question.”
• Applicability of National Environmental Policy Act (NEPA): “The (SMAA) will be required to perform an appropriate environmental review consistent with NEPA.
• Airport layout plan: An updated ALP and property map should be submitted to the Orlando District Office.

In addition to those included in the determination memo, objections in the denial letter included:

“The FAA does not believe the proposal demonstrates a benefit to civil aviation or the national airspace system, other than providing for some operational income that may fund undisclosed aeronautical development. However ... there are concerns with the appraisal for the land, existing lease and the proposed fair market value of the property.”

“The highest and best use of the property has been identified by the sponsor-commissioned appraisals as ‘office space for speculation/development.’ The area has been zoned as property for medical, charitable and institutional development, which could include office space and meeting space, but residential and recreational use is not necessarily specified. It should be noted that FAA guidance requires all airport properties to be zoned airport/light industrial, consistent with federal grant assurances.”

“It appears the appraisal was conducted for only 8.85(+-) acres of airport property instead of the expected 30.94(+-) acres. ... The appraisal was unclear on the rental valuation and also did not include a review appraisal as suggested by FAA guidance.”

Neither Piccolo nor New College officials provided further comment about the FAA’s preliminary determination. Any appeal may be made either to the Orlando Airports District Office, the Atlanta Regional Office or directly to FAA headquarters in Washington, D.C.