Compliance With FAA Grant Obligations At Odds With Owners

In a scenario that is not uncommon around the country, owners of hangars at the Ridgeland-Claude Dean Airport (3J1) in Ridgeland, South Carolina, are pushing back against the airport operator, Jasper County, because the county wants to bring new lease agreements into compliance with FAA grant assurances.

The airport was established in 1938 and has only begun accepting FAA grant funds about 10 years ago, and leases that were entered into back then (1938) were pretty informal but now that the airport has grown and expanded, hangars have changed hands and newer owners often did not secure leases for the land owned by the airport.

Keep in mind, federally obligated airports cannot sell or provide a vested interest in the land on which hangars or other improvements sit. Doing so violates the FAA’s ‘highest and best use’ grant obligation that says the airport may do whatever it deems necessary to optimize its operations and revenues. In other words, grant-obligated airports must maintain control over its own real property – its land.

Danny Lucas is the airport manager and the director of development services for Jasper County. He became airport manager in 2020 and seeks to bring the lease agreements into compliance but some hangar owners view the county’s actions as an attempt to seize their investments or gain control of valuable property and force them into less favorable lease terms. Owners feel that it’s more of an attempt to push them out.

Richard Dean, member of the airport commission and former airport manager, disagrees with Lucas by pointing out that leases in 2018 offered a 20-year term with options for multiple five-year renewals. In contrast, a 2023 lease offers only a single five-year term with no renewal options. These short-term leases diminish the market value of the hangars and discourage investment.

It appears that Lucas may be overstating the requirements for compliance with the FAA regulations regarding long-term leases, but we will see what happens in the courts.

FMI:  www.jaspercountysc.gov/