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09/30/2009 5190.6B <br />Page 12-3 <br />allowing the tenant to control a majority or all of the aeronautical property on the airport that can <br />be developed? <br /> <br />(2). Rights and Obligations. Does the lease grant the tenant an explicit or implied exclusive <br />right to conduct a business or activity at the airport? Does the lease state the purpose of the <br />lease, such as “the noncommercial storage of the owner’s aircraft?” Does the lease require any <br />use to be approved by the airport sponsor? This will prevent future improper nonaeronautical <br />uses of airport property. <br /> <br />(3). Term. Does the term exceed a period of years that is reasonably necessary to amortize a <br />tenant’s investment? Does the lease provide for multiple options to the term with no increased <br />compensation to the sponsor? Most tenant ground leases of 30 to 35 years are sufficient to retire <br />a tenant’s initial financing and provide a reasonable return for the tenant’s development of major <br />facilities. Leases that exceed 50 years may be considered a disposal of the property in that the <br />term of the lease will likely exceed the useful life of the structures erected on the property. FAA <br />offices should not consent to proposed lease terms that exceed 50 years. <br /> <br />(4). Payment of Fees to the Sponsor. Does the lease assess the tenant rent for leasing airport <br />property and/or facilities and a concession fee if the tenant provides products and/or services to <br />aeronautical users? Does the lease provide for the periodic adjustment of rent? Has the rental of <br />airport land and/or facilities been assessed on a reasonable basis (e.g., by an appraisal)? <br /> <br />(5). Title. Does the title to tenant facilities vest in the sponsor at the expiration of the lease? Do <br />any lease extension or option provisions provide for added facility rent once the title of facilities <br />vests in the sponsor? <br /> <br />(6). Subordination. Is the lease subordinate to the sponsor’s federal obligations? Subordination <br />may enable the sponsor to correct tenant activity through the terms of its lease that otherwise <br />would put the sponsor in violation of its federal obligations. <br /> <br />(7). Assignment and Subletting. Has the sponsor maintained the right to approve in advance <br />an assignment (sale of the lease) or sublease by the tenant? For example, could the sponsor <br />intervene if (a) a dominant fixed-base operator (FBO)33 decides to acquire all other competing <br />FBOs on the airfield or (b) an aeronautical tenant decides to lease aeronautical space to a <br />nonaeronautical tenant? <br /> <br />12.4. FAA Opinion on Review. Since the FAA’s interest in a lease is confined to the lease’s <br />impact on the sponsor's federal obligations, the sponsor should not construe the acceptance of the <br />lease as an endorsement of the entire document. When the ADO or regional airports division <br />reviews a lease and determines it does not appear to violate any federal compliance obligations, <br />that office will advise the sponsor that FAA has no objection to the agreement. The FAA does <br />not approve leases, nor does it endorse or become a party to tenant lease agreements. <br /> <br /> <br />33 A fixed-base operator (FBO) is a commercial entity providing aeronautical services such as fueling, maintenance, <br />storage, ground and flight instruction, etc., to the public.