Re: Michael and Frances coutclíes v..ci ty of Hayward. Formal complaint No

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1 ". rj u.s. Drtmt of Transpotation Fdral Aviation Administration Mr. and Mrs. Michal E. Coutchs Amrican Aircraft Sals Company Skywst Driv Hayward, CA JU, ndpndnc Av.. SW. Washington, D.C Ms. Dbra S. Margolis Dputy City Attorny City of Hayward Clawitr Road Hayward, CA R: Michal and Francs coutclís v..ci ty of Hayward Formal complaint No Dar Mr. and Mrs. Coutchs and Ms. Margol is: Enclosd is a copy of th final dcision.jf.th Fdral Aviation Administration (FAA) with rspct to th abov-rfrncd formal complaint undr Fdral Aviation Rgulations. (FAR) Sction Basß on th rcord in - this procding, w find that thé city of Hayward is not in violation of its assurancs undr th Surplus - Pröprty Act of 1944, as amndd (50 U.S.C.App. i6221, th Airport and Airway mprovmnt Act of 1982 (49 U.S.C. App. 2210),.and th Airport and Airway Dvlopm~nt Act pf 1970 (49 U.S.C. 1718). W furthr find that th city of- Hayward is not in violation of Sction 308 (a) of th Fdral Aviation Act of 1958 ( 4 9 U. S. C. App ( a) ). Accordingly, th abov-rfrncd formal-complaint is dismissd and th dockt is closd. Th rasons.for dismissal of th..subj ct complaint ar st forth. in - th nclosd Rcord of Dcision. This Rcord of Dcision is th FAA's final action with rspct to this mattr. Sincrly,.~ z: )t~ Lonard E. Mudd _ Dirctor, b~fic of Airport safty and Standards Enclosur cc: Ms. Patricia Fox, Esg.

2 MCHAL AND FRACES COUTCHES v. CTY OF HAYWARD, CALFORNA FORML COMPLANT NO RECORD OF DECSON. NTRODUCTON This mattr is bfor th Fdral Aviation Administration (FAA) basd on th formal complaints fild by Michal and Francs Coutchs d/b/a Amrican Aircraft Sals Company (AAS) against th City of Hayward (City or Sponsor), ownr of Hayward Air Trminal (Airport), in accordanc with our nvstigativ and Enforcmnt Procdurs, 14 CFR Part 13. Th FAA Airports District Offic in San Francisco, California (ADO), conductd an informal invstigation of th issus raisd in th complaints. Th ADO, with th concurrnc of th FAA Airports Division, Wstrn Pacific Rgion (Rgion), dtrmind that th City is in compl ianc with th trms and conditions of its Fdral grant assurancs and rcommndd that th complaint b dismissd. Th Rgion's dtrminations and rcommndations hav bn rfrrd to this offic for rviw and final FAA dcision. Th issus prsntd for dcision ar: * Whthr th City, by offring rnt and las trms to Aviation Training nstitut diffrnt from thos offrd to Amrican Aircraft Sals Co., is in violation of th provisions rgarding conomic nondiscrimination st forth in Sction 511(a) (1) (B) of th AAA and th City's Fdral grant and surplus proprty agrmnts. * Whthr th City, by offring rnt and las trms to Aviation Training nstitut diffrnt from thos offrd to Amrican Aircraft Sals Co., is in violation of th prohibition against xclusiv rights st forth in Sction 308 (a) of th Fdral Aviation Act of 1958, as amndd (FAAct), Sction. 51l(a) (2) of th AAA and th City'S Fdral grant and surplus proprty agrmnts. * Whthr th City, by rquiring Amrican Aircraft Sals Co. to pay an annual rnt of 6 prcnt of fair markt valu (FM) whn anothr commrcial aronautical activity is rquird to pay 4 prcnt of FM, is in violation th provisions rgarding conomic nondiscrimination st forth in Sction 511 (a) (1) (B) of agrmnts.. th AAA and th City'S Fdral grant. and surplus proprty

3 * Whthr th City, by rfusing to rngotiat Amrican Aircraft Sals Co.' s las prior to or following th accptanc of Fdral financial airport dvlopmnt assistanc, is in violation of th provisions with rgard to conomic nondiscrimination st forth in Sction 51l(a) (1) of th AAA and th City's Fdral grant and surplus proprty agrmnts. * Whthr th City, by charging Amrican Aircraft Sals Co. rnt on Parcls G-1 and G-2, dspit rciving th bnfits of pr9prty improvmnts valud in xcss of $100,000 providd by Amrican Aircraft Sals Co., is in violation of th provisions with rgard to conomic. nondiscrimination st forth in Sction 511 ( a) (1) of th AAA and th City's Fdral grant and surplus proprty agrmnts. * Whthr th City, by applying for Fdral airport assistanc during th priod from 1983 to th prsnt whil during th sam priod failing, rfusing and nglcting to provid las trms to Amrican Aircraft Sals Co., is in violation of th provisions with rgard to conomic nondiscrimination st forth in Sction 511 (a) (1) of th AAA and th City'S Fdral grant and surplus proprty agrmnts. 7 * Whthr th FAA is rquird to provid intrid rlif by nj oining th City's nforcmnt of its arbitration award against Amrican Aircraft Sals Co. pnding compltion of th administrativ procding in this dockt.. THE ARPORT Hayward Air Trminal (Airport) is a public us airport ownd and opratd by th City of Hayward (City or Sponsor). t is a rlivr airport for Mtropolitan Oakland ntrnational Airport. Joan Castnda is th airport dirctor: Alic Graff is th formr City Attorny: and DbraS. Margolis is th Dputy City Attorny. Th Airport had approximatly 450 basd aircraft and 161,160 annual oprations, including on-dmand air taxi and air chartr, gnral aviation and military oprations during th l2-month priod nding Sptmbr 22, (FAA Exhibit 1) Th Airport is locatd, in part, on proprty convyd to th City by th Unitd Stats undr a Rgulation 16 Quitclaim Dd datd April 16, 1947, and undr a surplus proprty agrmnt datd Sptmbr 8, 1949, pursuant to Sction 13 of th Surplus Proprty Act of 1944, as amndd (Public Law ). Th planning and dvlopmnt of th airport has bn financd, in part, with funds providd by th FAA and th Unitd Stats Dpartmnt of Transportation undr th Airport Dvlopmnt Aid Program, authorizd by th Airport and Airway Dvlopmnt Act of 1970, and th Airport mprovmnt Act, authorizd by th Airport and Airway mprovmnt Act of 1982 (AAA). 2

4 From 1982 to th prsnt, th City has rcivd $3,440,188 in Fdral grant funds. Ths funds wr usd for numrous proj cts and improvmnts at th airport. Th City most rcntly rcivd a grant in 1990 in th amount of $457,721 for airport improvmnts. (FAA Exhibit 2) Amrican Aircraft Sals Co. (AAS) is a commrcial aronautical activity providing aircraft sals and srvic, including maintnanc, ngin ovrhaul, quipmnt and supplis, and aircraft tidowns. AAS is ownd and opratd by Michal and. Francs Coutchs. AAS has bn a tnant of th Airport sinc Fbruary 4, Bndor Company is a commrcial aronautical activity. ngagd in aircraft sals, maintnanc and manufacturing. t has bn a tnant of th Airport sinc March 26, Andrson Aviation, formrly Wstrn Engin Srvicè Company, is a commcial aronautical acti vi ty ngagd in aircraft sals and maintnanc, and providing ngin ovrhaul quipmnt and suppl is. Andrson Aviation has bn a tnant of th Airport sinc Fbruary 24, Flightcraft/Bchcraft is a commrcial aronautical activity offring aircraft sals, maintnanc, and storag, flight instruction and ground school, air taxi, air ambulanc and ful srvics. Flightcraft has bn a tnant of th Airport sinc Jqn 25, Aircraft Modification is a commcial aronautical activity offring aircraft sals, maintnanc and storag srvics. t also oprats flight and ground school and provids air taxi srvic. t has bn a tnant of th Airport sinc May 1, Carr Aviation Acadmy (CAA) is a commcial aronautical acti vi ty providing aircraft sals, maintnanc, storag and ful srvics. t also oprats flight and ground schools and offrs air taxi srvic. CAA has bn a tnant of th Airport sinc Jun 1, Aviation Training nstitut (AT) is a commrcial aronautical activity providing flight instruation and ground school, on-dmand air taxi srvic, aircraft sals, maintnanc and storag. AT has bn a tnant of th Airport sinc sptmbr 5, Hunt-Myrs nc. is a commcial aronautical activity offring aircraft sals, maintnanc, avionics, storag and ful srvics. t also oprats a car rntal srvic. Hunt-Myrs has bn an Airport tnant sinc August 1,

5 . BACKGROUND n 1958 and 1959, Michal and Francs Coutchs d/b/a Amrican Aircraft Sals Co. (AAS or th Coutchs) ntrd into two las agrmnts with th City of Hayward (City) to offr commrcial aronautical srvics to th public from proprty locatd at Hayward Air Trminal (Airport). Ths las agrmnts wr amndd in 1972 and (S City rspons to Complaint datd July 23, 1992 (ADO Attachmnt 2)). n 1980, Parcls G-1 and G-2 wr addd to th 1959 las which ar rfrrd to as Las Lot 2. Th las amndmnt provids that th Coutchs wr to pay $ pr month for th two parcls. (S City-AAS Las Agrmnt datd Dcmbr 26, 1980) n 1989, th City discovrd that it had inadvrtntly nglctd to collct from AAS th additional rnt for Parcls G-1 and G-2 sinc th 1980 las amndmnt wnt into ffct. Whn AAS rfusd to voluntarily pay th amount in disput, th City fild suit for paymnt of $11, in unpaid rnt. Th Coutchs fild a cross-complaint allging that AAS was not rquird to pay th back rnt du to an oral agrmnt ntrd into in 1980 btwn th Coutchs and ithr th formr City Managr or th Formr Airport Dirctor whrby th Coutchs wr rlivd of thir obligation to pay rnt on parcls G-1 and G-2 in xchang for making proprty improvmnts valud at approximatly $100,000 in liu of montary considration. (S City rspons to Complaint datd July 23, 1992) Th Coutchs furthr contndd that th City basd th annual rnt chargd for AAS' lasholds ona diffrnt prcntag of fair markt valu (FM) than it usd to calculat th rnts chargd othr commrcial aronautical activitis for lasholds at th Airport. Spcifically, th Coutchs objctd to bing. chargd 6 prcnt of FM for AAS' lasholds as compard to th 4 prcnt of FMV bing chargd othr commrcial aronautical tnants. Th City subsquntly rtaind Donald H. Ashly & Associats, nc. (Consultant), to apprais th airport proprty occupid by AAS in prparation for calculating th schduld 1990 rnt adjustmnt for th Coutchs' lasholds. On July 14, 1989, th ~onsultant submittd its rport appraising th FMV of th lasd. prmiss (ral proprty only) at $4.25 pr squar foot (SF) making a total appraisd valu of $506,426 (roundd to $506,000) for th following lasholds.: Hangar Lot 1 (27,115 SF at $4.25/SF = $115,239): Hangar Lot 2 (22,500 SF. at $4.25/SF = $95,625): and Lots G-1 & G-2 (69,544 SF at $4.25/SF = $295,562). Basd on th Consultant's valuation of th Coutchs' lasholds at $506,000, th partis anticipatd an incras of AAS' annual rntal rat to $0. 255/SF (basd on th 6 prcnt of FM rquird by its las or 0.06 x $4.25 = $0.255) or a total of $30,

6 annual gross rnt. wi~h an adjustmnt of $1, for 7,425 SF of rnt fr spac du to strt.ralignmnt, th nt annual rnt would.b $28, or $0.255/SF. Th City subsquntly initiatd litigation against th Coutchs in th California stat Suprior Court for Alamda County to rcovr th unpaid rnt. Th City thn ntrd a motion to allow contractual arbitration pursuant to th California Cod of civil Procdur Sction to addrss this cas. Whn th Court grantd th arbitration motion, th City and th Coutchs agrd to hav th cas hard bfor Ms. Btty Barry Dal (Arbitrator), th court-appointd arbitrator. On Jun 26, 1991, this mattr was hard by th Arbitrator. Th issus prsntd for arbitration wr: (i) th FM of th lasd prmis which was usd as th basis for rnt adjustmnt: and (ii) th xistnc of.an oral agrmnt allgdly mad by th ci ty to waiv rnt from AAS for Parcls G-1 and G-2 addd to Las No. 2 for a tn-yar priod and th claim of th city that th Coutchs owd th City a total of $11, in unpaid rnt undr this las. On Dcmbr 31, 1991, th Arbitrator found that th FM of th Coutchs' lashold (119,159 SF) should b rducd from $4. 25/SF to $3. 25/SF for a total nrv of $407,524 instad of $506,000 pr th Consultant's valuation. This ruling by th~ arbitrator rsul td in th rduction of th rntal rat for th Coutchs lashold from $0. 255/SF to $0. 205/SF. Th Arbitrator furthr found that th Coutchs owd th city $11, in unpaid rnt plus intrst for Parcls G-1 and G-2. Th Arbitrator dismissd th Coutchs' claim of an oral agr~~nt. by Airport officials to waiv th rnt. Th Arbitrator dcidd that th Couchs owd th City a total of $81, (S City lttr to th Coutchs datd July 15,.1993) Th Coutchs fild a motion for rconsidration of th Court's ordr confirming th arbitration award. Along with this motion, th Coutchs also fild othr motions (to b hard concurrntly), including a motion to partially cancl and rform th subjct las, a motion for prliminary injunction to njoin th City'S allgd violation of its 1988 Fdral grant assurancs, a motion to compl furthr rsponss to rqusts f()r admissions, a motion stablishing admissions, a motion to corrct and vacat th clrk's allgd rror in ntry of judgmnt, and a motion for judgmnt on th pladings. Each of ths motions wr dnid. Thraftr, th rmaining motions of th Coutchs' crosscomplaint, which had not bn rsolvd by arbitration, procdd to trial. On July 19, 1993, th dat of. th trial, th Coutchs rqustd a continuanc of th trial so that thy could fil anothr motion to attack th court's arlir ordrs. Th motion was dnid and th partis wr ordrd to procd with th trial. At that tim, Mr. Coutchs rqustd that th rmaining thr motions of 5

7 his cross-complaint b dismissd bcaus h was not prpard to procd to trial. Th court ntrd an ordr of dismissal wi thout prj udic with rspct to thos motions. As a rsult of this court ordr, th arbitration award was thn confirmd as final. As a rsult, thr ar no claims currntly pnding in th Suprior Court with rspct to th Coutchs action..thir pti tion for writ of mandat fild aftr th dat of trial challnging th court's ordr confirming th arbitration award and sking to continu th trial dat was dnid. Th Coutchs, howvr, still hav an opportunity to appal th judgmnt, if thy so dsir. On April 23, 1992, during th pndncy of thir civil action, Michal and Francs Coutchs d/b/a Amrican Aircraft Sals Co. (AAS or th Coutchs) fild a formal complaint, in accordanc with FAA nvstigativ and Enforcmnt Procdurs. OnNovmbr 25, 1992, th Coutchs amndd thir complaint. Th complaint was assignd Formal Complaint Dockt No Th Coutchs allg that th City has violatd its Fdral grant assurancs by charging unjustly discriminatory rntal fs to airport tnants making th sam or similar uss of th airport and, thrby, crating an xclusiv right for on of th tnants. Spcifically, th Coutchs allg that th City rfusès to provid parity of las trms to AAS and Aviation Training nstitut (AT) which ar commrcial aronautical activitis offring idntical srvics and making allgdly idntical us of airport: that, thrby, th City provids AT an xclusiv right to provid unspcifid srvics at airport: and that th City rfuss to provid all long-trm lsss, i~ thos with las trms xcding 5 yars, with apriodic. rat rviw basd on an accptabl indx,.g., th Consumr Pric ndx. Th complaint also asks th FAA to involv itslf in th AAS-City disput ovr th paymnt of unpaid lashold rnt attributabl to th City'S oral agrmnt to waiv rnt for crtain airport proprty in. xchang for AAS-providèd improvmnts. t furthr asks th FAA.to dirct th City to forgo collction of th Arbi trator' s award to th City on th grounds that th Arbitrator ignord th Coutchs' intrprtation of th City's grant assuranc obligations... On July 23, 1992, and Fbruary 4, 1993, th City rspondd to. th initial complaint and th amndd complaint, rspctivly, rqusting that th Coutchs' complaint b dismissd. Th City argus that thr has bn a thorough and comprhnsiv arbitration of th FM and unpaid rnt issus, and that, fully awar ot th Coutchs allgations of Fdral grant assuranc, violations, th court-appointd arbitrator stablishd FM for AAS' lashold proprty and ruld that th City was ntitld to collct unpaid rnt. Th City submits that AT' s mor favorabl las trms rflct th conditions which xistd at th tim ach. las was ngotiatd and.th disparity. in lasholds,. g., AAS' 6

8 . suprior accss to taxiways and suprior location by virtu of visibility from taxiway. Th City maintains that it has not grantd any xclusiv right or spcial privilg or monopoly rgarding us of airport facilitis: that th Coutchs ar not bing dnid th opportunity to provid any srvic at airport, but rathr ar bing subjctd to slightly lss favorabl las trms than anothr commrcial aronautical acti vi ty.. Th City furthr maintains that it has agrd to amnd AAS' las trms to provid for 4 prcnt FM-rnt, but that th Coutchs rfus to agr to a rasonabl FM: and that th City has hird a consul tant to analyz currnt lass and pr9pos a mthod by which all lashold rntal amounts could b adjustd. On July 19., 1993, th Coutchs fild a rply to th City'S answr. On Octobr 5, 1993, and Novmbr 23, 1993, FAA Airports District,Offic, San Francisco (ADO) staff mt with City rprsntativs, i..,.airport Dirctor Joan Castanda and Dputy City Attorny Dbra S. Margolis, and AAS rprsntativs, i.., Michal Coutchs and Roy E. Stphnson, rspctivly, to valuat th Coutchs' allgations and th City'S rsponss, to clarify FAA policy with rspct to th applicabl grant assurancs, and to offr assistanc in rsolving th mattr. Th Rgion's invstigation was conductd by th ADO. Th ADO valuatd th argumnts, information and documntation providd by th partis in thir writtn submissions and during ADO staff intrviws with th partis. On April 11, 1994, th Rgion compltd its invstigation of th Coutchs' complaint and concludd that th City is not in violation of its Fdral Obligations. Basd. on its conclusions, th Rgion rcommndd that th complaint b dismissd. On May 31, 1994, this offic rcivd by facsimil transmission from Michal Coutchs a copy of a lttr datd Octobr 25, 1993, purportdly snt by Mr. Coutchs to th ADO. Th ADO has no rcord of rciving this lttr. Morovr; th lttr attmptd to injct nw.issus into this procding. Sinc th subjct lttr was fild in a procdurally inappropriat mannr and raisd issus xtranous to thos bing addrssd in this procding, w hav not includd th lttr in th administrativ rcord in this dockt and did not considr l t in making our dcision in this procding.. APPLCABLE LAW AND POLCY Th Fdral Aviation Act of 1958, as amndd (FAAct), assigns th FAA Administrator broad rsponsibilitis for th rgulation of air commrc in th intrsts of safty and, among othr things, th promotion, ncouragmnt and dvlopmnt of civil aviation. Undr ths broad powrs, th FAA sks to achiv safty and 7

9 fficincy of th total airspac systm through dirct rgulation of airman, aircraft, and airspac. Th Fdral rol in promoting civil aviation has bn augmntd by various lgislativ actions which authoriz programs. for providing funds and othr assistanc to local communitis for th dvlopmnt of airport facilitis. n ach such program, th airport sponsor assums crt~in obligations, ithr by contract or by rstrictiv covnants in proprty dds and convyanc instrpmnts, to maintain and oprat its airport facilitis safly and fficintly and in accordanc with spcifid condi tions. Commi tmnts assumd by airport sponsors in proprty convyanc or grant agrmnts ar important factors in maintaining a high dgr of safty and fficincy in airport dsign, construction, opration and maintnanc as wll as nsuring th public fair and rasonabl accss to th airport. Th planning and dvlopmnt of Hayward Air Trminal has bn financd, in part, with funds providd by th FAA and th u.s. Dpartmnt of Transportation undr th Airport mprovmnt Program (AP) authorizd by th Airport and Airway mprovmnt Act of 1982 (AAA). This program provids financial assistanc to an airport sponsor for airport dvlopmnt in xchang for binding commitmnts dsignd to assur that; th. public intrst w il 1 b srvd. Ths commitmnts ar st forth in th sponsor's applications for Fdral assistanc and in th grant agrmnt as sponsor assurancs, ~. a list of applicabl Fdral laws, rgulations, xcutiv ordrs, statut~basd. assurancs, and othr rquirmnts, binding th sponsor upon accptanc of th Fdral assistanc. Th FAA has a statutory mandat to nsur that airport ownrs comply with ths sponsor assurancs. S Sctions 308 (a), 313, 1002, and 1006 of th FAAct, and Sctions 509 (b) (1) (E), 511 (a), 511 (b), and 519 of th AAA. Th FAA Airoort Comolianc Program Th FAA dischargs its rsponsibility for nsuring airport sponsor complianc with.fdral obligations through its Airport Complianc Program. Th FAA's airport complianc fforts ar basd on th contractual obligations which an airport ownr accpts whn rciving Fdral grant funds or th transfr of Fdral proprty for airport purposs.. 'rhs obligations ar incorporatd in grant agrmnts and instrumnts of convyanc in ordr to protct th public's intrst in ciyil aviation and to nsur compl ianc with Fdral laws.. Th FAA Airport Complianc Program is dsignd to nsur th availability of a national systm of saf and proprly.maintaind public-us airports opratd in a mannr consistnt with th airport ownrs' Fdral obligations and th public's invstmnt in civil aviation. Th Airport Complianc~ Program dos not control or dirct th opration of airports: rathr, it monitors 8

10 th admini.stration of th valuabl rights pldgd by airport sponsors to th popl of th unitd stats in xchang for montary grants and donations of Fdral proprty to nsur that th public intrst is bing srvd. FAA Ordr A, Airport Complianc Rauirmnts, issud Octobr 2, 1989, (hrinaftr Ordr) sts forth policis and procdurs for th FAA Airport Complianc Program. t provids basic guidanc for FAA prsonnl in intrprting and administring th various continuing commitmnts mad to th Unitd stats by airport ownrs as a condition for th grant of Fdral funds or th convyanc of Fdral proprty for airport purposs. Th Ordr, intr alia, analyzs th various obligations st forth in th standard airport sponsor assurancs, addrsss th natur of thos assurancs, addrsss th application of ths assurancs in th opration of public-us airports, and facilitats intrprtation of th assurancs by FAA prsonnl.. Th Ordr covrs all aspcts of th airport complianc program xcpt nforcmnt procdurs. Enforcmnt procdurs rgarding airport co~plianc mattrs, absnt th filing of a formal crmplaint undr Fdral Aviation Rgulations (FAR) Part 13 (14 CFR 13.5), continu to b st forth in th prdcssor. ordr, FAA Ordr issud August 24, 1973, and incorporatd by rfrnc in FAA Ordr A. S FAA Ordr , Sc. 5-3, and FAA Ordr A, Sc ~. ' ~ Th Airport Sponsor Assurancs As a condition prcdnt to providing airport dvlopmnt assistanc undr th AAA, th Scrtary of Transportation must rciv crtain assurancs from th airport sponsor. Sction 511 (a) of th AAA sts forth assurancs to which an airport sponsor rciving Fdral financial assistanc must agr as a condition prcdnt to rcipt of such assistanc. Sction 511 (b) of th AAA authorizs th Scrtary to prscrib projct sponsorship rquirmnts to insur.complianc with Sction 511 (a) ~ Ths sponsorship rquirmnts ar includd in vry airport improvmnt grant agrmnt as. st forth in FAA Ordr A, Airport mprovmnt Program (AP) Handbook, Ch. 15, Sc. 1, "Sponsor Assurancs and crtification." Us on Fair. Rasonabl. and Not UnjustlvDiscriminatory. Trms Assuranc 22; "Economic Nondiscrimination,". of th prscribd sponsor assurancs satisfis th rquirmnts of Sction 511(a) (1) of th AAA. t provids, in prtinnt part, that th sponsor of a fdrally obligatd airport us on fair and "... will mak its airport availabl as an airport for public rasonabl trms, and without unj ust 9

11 "' discrimination, to all typs, kinds, and classs of aronautical uss. " Assuranc 22 (a) "... may stablish such fair, èqual, and not unjustly discriminatory conditions to b mt by all usrs of th airport as may b ncssary for th saf and fficint opration of th airport. " Assuranc 22 (h) "...may... limit any givn typ, kind, or class of aronautical us of th airport if such action is ncssary for th saf opration of th airport or ncssary to srv th civil aviation nds of th public." Assuranc 22 (i) Subsction (h) qualifis rprsnts an xcption to subsction (a) to prmit th subsction (a) and subsction (i) sponsor to x.rcis control of th airport sufficint to prclud unsaf and infficint conditions which would b dtrimntal to th civil aviation nds of th public. Assuranc 22 (c) satisfis th rquirmnts of Sction 511 (a) (1) (B) of th AAA. t provids that "ach fixd-basd oprator at any airport ownd by th sponsor.shall b subjct to th sam rats, fs, rntals, and othr chargs as ar uniformly applicabl to all othr fixd-basd oprators making th sam or similar uss of such airport and utilizing th sam or similar facilitis. ". FAA Ordr A dscribs th rsponsibilitis undr Assuranc 22 assumd by th ownrs of public us airports dvlopd with Fdral assistanc. Among ths is th obligation to trat in a uniform mannr thos usrs making th sam or similar us of th airport and to mak all. airport facilitis and srvics availabl on fair and rasonabl trms without unjust discrimination. S Ordr, Scs. 4-14(a) (2) and 3-1. Assuranc 24, "F and Rntal Structur," of th prscribd sponsor assurancs satisfi~.th rquirmnts of Sction 511 (a) (9) of th AAA. t provids, in prtinnt part, that th spoñsor of a fdrally obligatd airport "agrs that it will maintain a f and rntal structur consistnt with Assuranc 22 and 23, for th facilitis and srvics bing providd th 10

12 airport usrs which will mak th airport as slf-sustaining as possibl undr th circumstancs xisting at th particular airport. " FAA Ordr A dscribs th rsponsibilitis undr Assuranc 22 assumd by th ownrs of public us airports dvlopd with Fdral assistanc. Among ths is th obligation to trat in a uniform mannr thos usrs making th sam or similar us of th airport and to mak all airport facilitis and srvics availabl on fair and rasonabl trms without unjust discrimination. S Ordr, Scs. 4-l4(a) (2) and 3-1. Th obligation of airport managmnt to mak an airport availabl for public us dos not prclud th ownèr from rcovring th cost of providing th facility through fair and rasonabl fs, rntals or othr usr chargs which will mak th airport as slf-sustaining as possibl undr th circumstancs xisting at th particular airport. S Ordr, Sc (a). Each commrcial aronautical activity at any airport shall b subjct to th sam rats, fs, rntals and othr chargs as ar uniformly applid to all othr commrcial aronautical activitis of such airport utilizing th making th sam or.similar uss sam or similar facilitis. S ordr, Sc (a) (2). FAA policy provids that variations in commrcial aronautical activitis' lashold locations, lashold improvmnts, and th srvic~. providd from such lashold may b th ba~is for ' accptabl diffrncs in rntal rats, although th rats must b rasonabl and quitabl. S Ordr, Sc (a) (2) (c).. Howvr, if th FAA dtrmins that commrcial aronautical activitis at an airport ar making th sam uss of idntical airport facilitis, thn lass and contracts ntrd into by an airport ownr subsqunt to July 1, 1975, pursuant to th Airport and Airway Dvlopmnt Act of 1970, as amndd, shall b subjct' to th sam rats, fs, rntals and othr chargs ~ S Ordr, Sc. 4-14(a) (2) (d).. FAA policy furthr provids that, all lass with trms xcding fiv yars, should provid for priodic. rviw and adjustmnt of th rats and chargs basd on. an accptabl indx. This priodic las rviw ts xpctd to facilitat parity of rats and chargs btwn nw commrcial aronautical tnants and longstanding tnants making th sam or similar us.ofairport facilitis and to assist in making th airport as slf-sustaining as possibl undr th circumstancs xisting at th airport. S Ordr, Sc (a) (2) (f). Th Prohibition Aaainst Exc~usiv Rights. Sction 308 (a) of th FAAct provids, in rlvant. part, that "thr shall b no xclusiv right for th us of any landing 11

13 ara or air navigation facility upon which Fdral tunds hav bn xpndd." Sction 511 (a) (2) of th AAA similarly provids, in prtinnt part, that "thr will b no xclusiv right for th us of th airport by any prson providing, or intnding to provid, aronautical srvics to th public." Assuranc 23, "Exclusiv Rights", of th prscribd sponsor assurancs rquirs, in prtinnt part, that th sponsor of a fdrally obligatd airport ". ~.will prmit no xclusiv right for th us of th airport by any prsons providing, or intnding to provid, aronautical srvics to th public...and that it will trminat any xclusiv right to conduct an aronautical activity now xisting at such an airport bfor th grant of any assistanc undr th Airport and Airway mprovmnt Act of 1982." n FAA Ordr A, Exclusiv Riqhts, th FAA publishd its xclusiv rights policy and broadly idntifid aronautical activitis as subjct to th statutory prohibition against xclusiv rights. Whil public us airports may impos qualifications and minimum standards upon thos who ngag in aronautical activitis, w hav takn th position that th application of any unrasonabl rquirmnt or standard that is applid in an unjustly discriminatory mannr may constitut a constructiv grant of an xclusiv right. S FAA Ordr A, Para.. 11.c. FAA Ordr A provids additional guidanc on th application of th statutory prohibition against xclusiv rights and FAA policy rgarding xclusiv rights at public-us airports. S Ordr, Ch. 3. StatutorY Policv Dclarations Sction 502 (a) (5) of th AAA, in prtinnt part, dclars.that "all airport and airway programs should b administrd in a mannr consistnt with th provisions of sctions 102 and 103 of th Fdral Aviation Act of 1958, with du rgard for th goals xprssd thrin of fostring comptition, prvnting unfair mthods of comptition in air transportation,... and prvnting unjust and discriminatory pract~cs...". Sction 502 (a) (6) of th AAA furthr dclars that "rlivr airports mak an important contribution to th fficint opration of th airport and airway systm, and spcial mphasis should b givn to thir dv~lopmnt. n. 12

14 iv. ANALYSS AND DSCUSSON Dispari ty of AAS and AT Las Trms Th Coutchs allg that th City rfuss to provid parity of las trms to AAS and Aviation Training nstitut (AT), commrcial aronautical activitis offring idntical srvics. and making allgdly idntical us of th Airport: and that, thrby, th City provids AT an xclusiv right at airport. Th city submits that AT' s allgdly mor favorabl léas trms rflct th conditions which xistd at th diffrnt tims during which ach las was ngotiatd and th disparity in lasholds,.9~ f AA' suprior accss to taxiways and suprior location by virtu of visibility from taxiway. Th City maintains that it has not grantd. any xclusiv right or spcial privilg or monopoly rgarding us of airport facilitis: that th Coutchs ar not bing dnid th opportunity to provid any srvic at airport, but rathr ar bing subjctd to slightly lss favorabl las trms than anothr commrcial aronautical activity. Th City furthr maintains that it has agrd to amnd AAS i las trms to provid for 4 prcnt FM~rnt, but that th Coutchs rfus to agr to a rasonabl FM, dspit th fact that th city hird a consultant to analyz currnt lass and propos a mthod by which all lashold rntal amounts could b adj ustd. Basd on ADO staff intrviws with th partis and th rcord in this procding, w conclud that th City'S actions with rgard.to its lasing arrangmnts with AAS and AT wr not inconsistnt with its Fdral Obligations. Our rviw of th City's lass with AAS and AT lad us to agr wi th th Coutchs that a disparity xists in th las trms njoyd by AAS and AT: howvr, w conclud that th rntal rats prviously incorporatd into th Coutchs lass via th various amndmnts wr comparabl or bttr than thos of AT. A comparison of th AAS and' AT lass is dmonstrativ of th diffrncs in las trms. (FAA Exhibit 3) Th total ara of th AT la.shold is 50.,018 squar ft (SF). Th trm of th las is for 25 yars, i.., from Sptmbr 1, 1975 to August 31, 2000, with provision for rnt adjustmnt at fiv yar intrvals. For th first fiv yars of th City-AT las, th annual rnt was $2,500 or $0.05/SF pr yar. During th scond fiv-yar priod, th rnt was incrasd to $3,925 pr yar or $0.08/SF pr yar. During th third-fiv yar priod, th rnt was inqrasd to $4,435 p~r yar or $0.09/SF pr yar. For th currnt las priod, i.., from January 1, 1991 to Dcmbr 31, 19~5), AT's rnt is $5,455 pr yar or $0.11/SF pr yar. 13

15 ,.. By comparison, th Coutchs' hav ntrd into twq lass with th City for proprty at th Airport. Las No. 1 was ntrd on Fbruary 4, 1958 for a plot of land containing 22,500 SF. Th trm is for 50 yars with a provision for rnt adjustmnt at 10-yar intrvals basd on FM as appraisd. Th initial rnt was $480 pr yar or $0.021/SF. Tn city. las was first amndd on Jun 2, and th rnt was incrasd to $1,125 pr yar or $0. Q5/SF. Th scond rntal adjustmnt was schduld for March 1~ 1968: howvr, th. rnt adj ustmnt bcam th subj ct of disput btwn AAS and th As a compromis to.litigation on th rnt adjustmnt, a scond amndmnt to Las No. 1 was xcutd on August 22,1972, which incrasd th siz of AAS' s lashold from 22,500 SF. to 27,115 SF. Th annual rnt was incrasd from $1,125 to $1, with th lngth of th las rmaining at 50 yars and th priodic rnt adj ustmnt to b mad vry tn yars starting on March 1, Du to th incrasd xtnt of th lashold, AAS' annual rnt was dcrasd from $0. 05/SF to $0. 045/SF. A.';;ubsqtnt amndmnt to Las No. 1 was agrd upon on Dcmbr 2, 1980, xtnding th lngth of th las to Dcmbr 31, 2010, and incrasingaas' annual rnt to $1, or. $0.05/SF. Th priodic rnt adjustmnt provision rmaind at tn-yèar intrvals. Las No. 2 was ntrd on Jun 2, 1959 for a parcl with an ara of 22,500 SF. Th annual rnt was st at $1,125 or$0.05/sf. Th lngth of th las was 35 yars, with a provision for adjustmènt at tn-yar intrvals. Th first amndmnt to this las was mad on August 22, 1972, as a compromis to litigation on th rnt adjustmnt. Th lngth of th las, th siz of th lashold, and th tn-yar rnt adjustmnt schdul rmaind th sam. Howvr, th annual rnt was rducd to $1, or. $ /SF. Th scond amndmnt to Las No. 2 was ntrd on Dcmbr 26, 1980, incrasing th annual rnt of th original parcl of land known as Lot. 2 containing 22,500 SF to $1,125 or $0. 05/SF pr yar: adding Parcls G-1 and G-2 (22,394 SF and 47,150 SF rspctivly) for a total lashold of 69,544 SF and stablishing th annual rnt of $3,i05 or $0.045/SF for this addition: and xtnding th lngth of Las No. 2 until Dcmbr 31, Th rnt adjustmnt priod rmaind at tn yars, using th sam adjustmnt formula incorporatd into Las No.1. Thus, th schduld dat of th ~irst rnt adjustmnt was January l, Basd on th forgoing analysis of th City's agrd-upon las arrangmnts with AAS and AT as st forth in dtail in FAA Exhibit 4, w conclud that th Coutchs ovraii rntal rats agrd upon at th most rcnt adjustmnt, which rang from $0.045/SF to $0. 05/SF, ar mor favorabl than th $0. 08/SF 14

16 rntal rat chargd AT. W addrss blow th disputd 1990 rnt adjustmnt. A disparity in las trms dos not in and of itslf constitut a violation of th City's Fdral obligation to mak th Airport availabl on fair, rasonabl and not unjustly discriminatory trms to commrcial aronautical acti vi tis, nor dos it constitut a violation of th City's assuranc that ach commrcial aronautical activity will b chargd th sam rnts as ar uniformly chargd all othr such activitis making th sam or similar us of th airport and utilizing th sam or similar facilitis. FAA policy provids that, if a tnant occupis a particularly advantagous location on an airprt, such location would b a factor justifiably influncing th rntal valu of th proprty and a diffrntial in rntal fs and chargs could b assssd to rflct this advantag of location. Rviw of th location of th commrcial aronautical activity lasholds on th Airport confirms that ach of th sits ar diffrnt in parcl siz and location. t appars that AAS' location is suprior to AT's sit in trms of visibility from _ thfj taxiway and accssibility from th main accss road to th coi,mrcial aronautical acti vi ty ara on th Airport. Whil AAS and AT ar making th sam or similar us of airport facilitis, th diffrntial in AAS' and AT' s lashold rnts at th Airport appars to rflct th disparity in lashold siz, location and FMv. Such disparity in lashold rnts is not inconsistnt with th City'S Fdral obligations. Exclusiv Riahts W conclud that th Coutchs' allgation that th disparity in AAS' and AT' s lashold rnts violats th statutory prohibition against th granting of an xclusiv right at a fdrally obligatd public-us airport is without mrit. Th Coutchs' allgations in. this rgard fail to spcify ithr th aronautical srvic (s) for which such allgd xclusiv right is bing grantd or idntify th mannr in which AT is th rcipint of th allgd xclusiv right. Nor hav th Coutchs spcifid any unrasonabl rquirmnt for accss or minimum standard that is bing applid to xclud AAS. Furthrmor, th Coutchs provid no vidnc that any ntity, including AAS, is bing dnid th opportunity to provid any aronautical srvics. Morovr, our rviw of th commrcial aronautical srvics offrd by AT, AAS, and th othr tnants at th Airport indicats that thr is no lack of comptition in th provision of aircraft sals, maintnanc, storag and tidown, flight instruction and ground schools, air taxi,.or ful srvics. 15

17 Against this background and on th basis of th administrativ rcord in this procding, w conclud that th City is not acting inconsistntly with. th prohibition against th granting of an xclusiv right. Airoort Lashold Rntal structur Th aformntiond disparity in th FM of lasholds at th Airport is also rlvant to our valuation of th City's proposd rnt incras for AAS' lashold schduld for January 1, 1990, which is allgd by th Coutchs to b unfair, unrasonabl and discriminatory. W conclud that th City has convincingly supportd its contntion that th currntly proposd adjustmnt of AAS' rnt basd on th appraisd FM of th lashold is consistnt. with th currnt rntal rats bing chargd th othr commrcial aronautical tnants at th Airport. W ar concomitantly unprsuadd that th proposd rnt incras for th AAS lashold is inconsistnt with th. City's Fdral Obligations. FAA Exhibit 3, which sts forth th dtails of th ç~ ty 's lass wi th its cohmrcial aronautical tnants, dmonstrats' that th City.ha.s cc1nsistntly incrasd its rntal rat structur ovr tim, making it incrasingly mor uniform. n 1957, Bndor Company was chargd a rèntal rat of $0. 013/SF for its lashold: during 1958 and 1959, rspctivly, th City chargd a rntal rat of $0. 05/SF. for th Andrson AviatiQR lashold and rats ranging from $0. 02/SF to $0. 05/SF for AAS' lasholds: during th priod, th City chargd $0.03/SF for Flightcraft's, Carr Aviation Acadmy's and Aircraft Modification i s lasholds: in 1975 and 1977, rspctivly, th City chargd a $0. 05/SF rat for AT' sand Hunt-Myrs' lasholds. Howvr, during th most rcnt rnt adjustmnt for ach of ths tnants, th City substantially incrasd th. rntal rats. for ach lashold. Ths rnt adj ustmnts wr prdicatd on th FM of th lasholds. Proposd FM-basis for Lashold Rnt Calculation Th Coutchs spcifically objct to th City'S incorporation into its lass th rquirmnt of using 6 prcnt of th FM as th basis for th tn-yar rnt adjustmnt ffctiv January 1, 1990, arguing that th rnts of all othr comparabl commrcial aronautical tnants ar calculatd on th basis of 4 prcnt of th FM of thir lasholds. ThCoutchs contnd that th dispari ty in th basis of rnt calculations is unfair, unrasonabl and unjustly discriminatory. Our rviw of th. commrcial aronautical tnant lass currntly in èffct at th Airport indicats that th lashold rnts chargd ach of th commrcial aronautical tnants, with thr xcptions, ar basd on four prcnt offm. Th xcptions ar 16

18 AAS and Aircraft Modification, for which rnt is calculatd on th basis of six prcnt of FM, and Bndor Company for which no FM basis for rnt calculation appars to b providd. Th Coutchs prviously agrd to th Subjct rnt adjustmnt provisions of thir lass, which wr introducd through th amndmnts of Dcmbr 26, Nvrthlss, th City, in viw of th Coutchs objction, offrd to rduc th rnt adjustmnt basis from 6 prcnt of lashold FM to 4 prcnt of lashold FM. (S city's Pulic Works Dirctor, Dnnis Butlr mmo to Michal Coutchs, datd April 1, 1991, Exhibit C of Attachmnt 2 to city's answr datd July 23, 1992) Howvr, th Coutchs rfusd th City's offr and mad a countr-offr which would not us FM to dtrmin th valu of th lashold and which would rsult ina rntal rat of $0.13/SF. (S Coutchs mmo to City datd April 2, 1991) Th Coutchscountr-offr was not accptabl to th City. Basd on th rcord in this procding, it appars that th City actd in good faith by offring to rdfin th rnt adjustmnt provisions of its las arrangmnts with AAS to addrss th Coutchs' concrns about th apparnt inquity. By offring to modify in this mannr th trms of its las arrangmnts with AAS, rgardlss of whthr th Coutchs accptd th offr or th City accptd th Coutchs' countr-offr, th City nullifid any unjustly discriminatory ffct that may hav prviously arisn from th disparity in rnt adjustmnt trms offrd by th city to othr" commrcial aronautical tnants. Th Coutchs furthr contnd that thci ty' s rfusal to provid all long-trm lsss,.i.., thos with las trms xcding 5 yars, with a priodic rntal rat adjustmnt basd on th Consumr Pric ndx (CP) is a violation of its Fdral obligation to provid rasonabl las trms for its commrcial aronautical tnants.. n making this argumnt, howvr, th Coutchs misconstru th natur of th City'S Fdral obligations and FAA policy in such mattrs. Nithr rquirs any spcific indx on which rquird priod rat incrass should b basd. Th. CP is only on accptabl basis on which to calculat priodic lashold rnt adjustmnts: prcntag of FM is qually. accptabl. So long as th airport ownr applis th indx of its choic in a fair, rasonabl and not unjustly discriminatory mannr, th FAA dos not involv itslf in th stablishmnt of airport which mattrs w find ar mor appropriatly lft to th discrtion of airport ownrs. las rats, n this particular situation, th City appars to b making good-faith fforts to rviw lass and stablish a uniform mthod by which all lashold rnts could b priodically adjustd. Rcognizing that a prudnt airport ownr will incras its lashold rnts ovr tim to covr th incrasd cost of maintnanc and airport oprations and that FM is an accptabl 17

19 indx on which to bas lashold rnts, w conclud that th City has bn adjusting its lashold rnts in a fair, rasonabl and not unjustly discriminatory mannr consistnt with its obligation to mak th Airport as slf-sustaining as possibl in th particular circumstancs xisting at th Airport. Against this background and on th rcord in this procding, w conclud that th City is acting propèrly to maintain currnt commrcial aronautical srvics las arrangmnts which ar consistnt with th City's Fdral obligations. othr Allaations and Assrtions Th Coutchs allg that th City applid for Fdral airport assistanc during th priod from 1983 to th prsnt without providing las trms to AAS and that th City rfusd to rngotiat AAS' s las prior to or following th accptanc of Fdral financial airport dvlopmnt assistanc in violation of th City l S Fdral obligations. No vidnc of rcord xists to support th Coutchs' allgations in this rgard. To th contrary, th rcord is rplt with indications that th~ City has bn willingcto ngotiat lasing arrangmnts with th Coutchs. Morovr, our invstigation rvald no vidnc that th City, through its rprsntativs Ms. Alic Graff and Ms. Joan Castanda, mad any fals statmnts whn applying for fdral funding from 1983 to prsnt. :Råthr, w found that th City has mad vry ffort to comply with its grant assurancs, spcially in its ngotiations with th Coutchs. Th Coutchs' assrt that oral agrmnts wr mad by crtain Airport officials waiving th rnt for Parcls G-1 and G-2 bcaus th Coutchs mad in xcss of $100,000 of lashold improvmnts to ths two parcls. This assrtion, howvr, was dnid by th City officials involvd in ngotiating th rlvant amndmnt of AAS Las No. 2 on or about Dcmbr 26, n making this assrtion, th Coutchs also ask th FAA to invol v itslf in th AAS-Ci ty disput ovr thê paymnt of unpaid l~ashold rnt attributabl to th City'S oral agrmnt to waiv rnt for airport proprty in xchang for AAS-providd improvmnts. t furthr asks th FAA to dirct th City to forgo collction of th Arbitrator's award to th City on th grounds that th Arbitrator ignord th Coutchs' intrprtation of th City's grant assuranc obligations. Th Coutchs hav submittd no documntary support for thir assrtion. Th City has sub~ittd notarizd dclarations by th formr City officials stating that thy nvr mad such oral agrmnts with th Coutchs. (S City's answr.datd Fbruary 4, 1993, Attachmnt 2) n addition, California law rquirs that any agrmnt rlating to th las of ral proprty must b in writing (Civil Cod Sction 1624). Furthrmor, this oral 18

20 . agrmnt allgation was raisd by th Coutchs in th litigation in California Suprior Court, but was dismissd during th arbitration procss. Th collction of unpaid rnt and th status of oral agrmnts ar mattrs of contract law controlling th lssor-lss rlationship. Al though th contract involvs th las of proprty at a fdrally obligatd, public-us airport for commrcial aronautical us, th collction of rnt pursuant to such contract falls outsid. th scop of th City's fdral Obligations. t would b inappropriat for th FAA to intrvn in a landlord-tnant disput which is outsid its jurisdiction. Morovr, th FAA has not found th City to. b in noncomplianc with its Fdral obligations. Thrfor, Fdral law provids no basis for dircting th City to forgiv unpaid rnt as a corrctiv action. Th Coutchs furthr assrt that th FAA is rquird to provid intrim rlif by njoining th City'S nforcmnt.of its arbi tration aw.ard against AAS pnding compltion of th administrativ procding in this dockt. Th FAA dos not hav th authority undr th FAAct or th AAA to provid intrim rlif by njoining th city's nforcmnt of th arbitration award against AAS pnding compltion of an administrati vprocding. n crtain situations th Scrtary of Transportation has th authority to tak mrgncy action, i.., undr Sction 609 of th FAAct: howvr, a situation involving Sction 308 (a) of th FAAct is not within th scop of th Scrtary's mrgncy powrs. For ths rasons, w will not ordr th intrim rlif rqustd by th Coutchs. Against this background and on th basis of th rcord in this procding, w conclud that ths assrtions and allgations warrant no furthr FAA. action. V. FNDNGS. W hav xamind th City's policis and practics with rgard to its rntal of airport proprty to commrcial aronautical tnants offring flight support srvics to th public at th Airport. Th rcord in this cas supports a finding that, with rgard to th particular issus raisd by th Coutchs, th Sponsor is in compl ianc with th trms and conditions of its Fdral obligations. Morovr, upon bcoming awar of potntial complianc dficincis, th City has actd to corrct th anomaly consistnt with th advic and guidanc providd by th ADO. Basd on th rcord in this procding,. w hav no rason to find that th City is acting in any mannr othr than to mak th airport availabl for public us on fair and rasonabl trms, and without unjust discriminatio~, by commrcial aronautical 19

21 . ~ activitis in a mannr ponsistnt with its rponsibility to mak th Airport as slf-sustaining as possibl in th particular circumstancs xisting at th Airport. W find that th City has offrd diffrnt rnt and las trms to various commrcial aronautical tnants, including but not limitd to AAS and AT: howvr, this disparity is justifiabl on th basis of lashold siz, location, valu and lngth of las. W furthr find that th City has ngotiatd, and continus to b willi~g to ngotiat, in good faith with th Coutchs with rgard to th lasing of proprty for AAS i commrcial aronautical acti vi tis at th Airport. Furthrmor, w find that th City has implmntd its lasing practics in a mannr which taks into account th particular circumstancs at th airport and rflcts a du rgard for th statutory prohibition against xclusiv rights. Absnt vidnc in support of th rmaining allgations and assrtions by th Coutchs, w hav no rason to find that thy warrant furthr FAA action. Thrfor, w find that th Coutchs' s complaint should b dismissd. ORDER Undr th spcific circumstaiics at Hayward Air Trminal as discussd, and basd upon th vidnc of rcord in its ntirty, w find that:..(a) th City of Hayward's lasing arrangmnts with Amrican Aircraft Sals Co. and Aviation Trainining nstitut at Hayward Air Trminal do not violat th provisions rgarding conomic nondiscrimination st forth in Sction 511(a) (1) (B) of th AAA and th City's Fdral grant and surplus proprty agrmnts. (b) th City of Hayward's lasing arrangmnts with Amrican Aircraft Sals Co. and Aviation Trainining nstitut at Hayward Air Trminal do not violat th prohibition against xclusiv rights st forth in Sction 308 (a) of th Fdral Aviation Aat of 1958, as. amndd (FAAct), Sction 511(a) (2) of th AAA and th City'S Fdral grant and surplus proprty agrmnts... (c) th City of Hayward, by rquiring Amrican Aircraft Sals Co~ to pay an annual rnt of 6 prcnt of lashold fair markt valu (FM) whn othr commrcial aronautical activitis ar rquird to pay 4 prcnt of lashold FM, is not in violation th provisions rgarding conomic nondiscrimination st forth in Sction 511(a) (1) (B) of th AAA and th City'S Fdral grant and surplus proprty agrmnts... (d) th City of Hayward's has ngotiatd in good faith Amrican Aircraft Sals Co.' s las, prior to and following th accptanc of Fdral financial airport dvlopmnt assistanc, 20

22 . consistnt with th provisions rgarding conomic nondiscrimination st forth in Sction 511 (a) (1) of th AAA and th City's Fdral grant and surplus proprty agrmnts. () th City of Hayward, by charging Amrican Aircraft Sals Co. rnt on ParclsG-1 and G-2, dspit allgdly rciving th bnfits of proprty improvmnts valud in xcss of $100,000 providd by Amrican Aircraft Sals Co., is not acting inconsistntly with th provisions rgarding conomic nondiscrimination st forth in sction 511 (a) (1) of th AAA and th City's Fdral grant and surplus proprty agrmnts. (f) th City, by applying for Fdral airport assistanc during th priod from 1983 to th prsnt whil during th sam priod providing las trms to Amrican Aircraft Sals Co., is not in violation of th provisions rgarding conomic nondiscrimination st forth in sction 511 (a) (1) of th AAA and th City's.Fdral grant and surplus proprty agrmnts. (g) th FAA is not rquird to provid intrim rlif by nj oining th City.' s nforcmnt of its arbitration award against Amrican Aircraft Sals Co. pnding compltion of th a'lministrativ procding in this dockt. Accordingly, w dismiss th complaint in FAA Dockt Ths dtrminations ar mad undr Sctions 307, 308 (a), 313(a), a~ 100~(a) of th Fdral Aviation Act of 1958, as amndd, 49 U.S.C. App. Sc. 1347, 1348, 1354, and 1486, rspctivly, and Sctions 511 and 519 of th Airport and Airway mprovmnt Act of 1982, as amndd, 49 U.S.C. App. Sctions 2210 and 2218, rspctivly. RGHT OF APPEAL This ordr constituts final agncy action undr Sction 1006 (a) of th Fdral Aviation Act of 1958, as amndd, 49 U.S.C. App. Sction Any party to this procding having a substántial intrst in this ordr may appal th ordr to th courts of appals of th Unitd stats or th Unitd Stats Court of Appals for th District of Columbia upon ptition, fild within 60 days aftr ~try of this ordr. Lonard E. Mudd Dirctor, Offic of Airport Safty and Standards 21