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APPENDIX II: PRELIMINARY AIRPORT ASSESSMENT <br />AIRPORT OVERVIEW <br />AERONAUTICAL REVENUE SOURCES <br />/ Aeronautical Land and lmprovement Rents: ln addition to the primary function of <br />operating and managing the airfield infrastructure of the airport (e.9., runways, taxiways, <br />and associated aprons), most airport sponsors can be, and should be, considered a real <br />estate management company The single greatest asset that an airport sponsor must <br />generate revenues is the land surrounding the airfield. The highest and best use of this <br />land is aeronautical activities. Therefore, the single greatest revenue funding sources for <br />an airport are typically the leasing of airport land and/or improvements for aeronautical <br />use. ln Figure 2, examples of aeronautical land and improvement uses are identified. <br />Figure 2: Airport Land and lmprovements <br />FAA lmprovements <br />and Facilities <br />FBO lmprovements <br />and Facilities <br />SASO lmprovements <br />and Facilities <br />Aircraft Storage <br />lmprovements and <br />Facilities <br />eControl tower <br />.Approach equipment <br />. Navigation <br />equipment <br />.General aviation <br />terminal building <br />. Offices <br />.Shops <br />.Storage <br />.Aircraft hangars <br />. Ramp <br />.Vehicle parking areas <br />. Fuel storage <br />.Aircraft maintenance <br />and repair <br />.Avionics and <br />instruments <br />.Aircraft rental <br />. Flight training <br />.Aircraft charter <br />oAircraft management <br />.Specialized services <br />r Ramp (including <br />tiedown spaces) <br />.Shadeports <br />.T-ha ngars <br />o Executive/box <br />ha ngars <br />.Community hangars <br />.Corporate hangars <br />oMaintenance hangars <br />Following are descriptions of the available models for airport sponsors to generate revenue <br />funding sources from the "leasing" of airport land. <br />traditional modelwhereby the airport sponsor enters a land lease for a set term and for <br />a market land rent. Although this approach offers the airport a steady and predictable <br />income stream, any opportunity to share in the more lucrative sublessee rent is left <br />exclusively for the developer. When an airport sponsor is taking no risk in a <br />development project, the traditional lessor/lessee model approach is appropriate. <br />position to make an investment or the opportunity does not return a sufficient return on <br />investment for the private enterprise, the airport sponsor could swap a portion of the <br />land rent in exchange for a share of future revenue streams. ln addition, when <br />entrepreneurial airport sponsors are willing to assume some development risk, they can <br />have the opportunity to enhance cash flow from development projects by contributing <br />the land in return for retaining an equity stake in the developed property. Contributing <br />an asset (such as land) in exchange for equity is referred to as equity participation. <br />Airport Strategic Business Plan, 0712612021 24