Airport Alert: FAA Announces Grant Awards and Additional Guidance for the Airport Coronavirus Response Grant Program
February 12, 2021
Today the Federal Aviation Administration (FAA) announced grant awards for the $2 billion that the agency is making available under the Airport Coronavirus Response Grant Program (ACRGP) and that Congress approved in late December as part of the Coronavirus Response and Relief Supplemental Appropriation Act (CRRSA). In addition, FAA released an updated frequently asked questions (FAQ) document that provides guidance for airport sponsors on, among other things, how airport sponsors can claim the allocation that is available to them for providing relief to concessionaires. FAA's FAQ also indicates that ACRGP grant agreements will include a special condition that airport sponsors implement a policy requiring persons to wear a mask at all times while in the public areas of the airport, except where certain exemptions apply.
As reported in our January 19 Airport Alert, FAA had already released an FAQ document that provided a number of details on how FAA plans to administer the ACRGP. As airport members are likely aware, administration of the ACRGP is similar in many regards to the guidance and processes that have been developed by FAA for airports participating in the Coronavirus Aid, Relief, and Economic Security (CARES) Act grant program. However, the original FAQ guidance on ACRGP did not contain any information about how airports can claim their share of the $200 million that has been made available for concession relief.
A summary of the updated FAA FAQ guidance on ACRGP is provided below, including two notable updates on concession relief and mask requirements at airports. We have also provided a quick recap of how CRRSA requires FAA to distribute the $2 billion. You can find a breakdown of the ACRGP award amounts, including the allocation for concession relief, here. Additional information, including a video briefing on ACRGP and the updated FAQ document, can be found here.
Coronavirus Relief Funding
Commercial Service Airports. Of the total amount available for airports, CRRSA provided $1.75 billion for commercial service and certain cargo airports. Funds will be distributed based on a modified AIP apportionment run. The cargo set-aside will remain intact, and there will be no maximum grant amount or PFC turnback. CRRSA preserves doubled entitlements and retains the $1 million minimum entitlement for smaller primary airports. Remaining funds, to the extent there are any, would be distributed based on enplanements.
Non-Primary Commercial Service/General Aviation/Contract Tower Airports. CRRSA included up to $45 million for nonprimary commercial service and general aviation airports. Of that amount, not less than $5 million will be divided equally among nonprimary airports that participate in the contract tower program to cover lawful expenses to support operations.
Concessionaires. CRRSA also provided $200 million to primary airports based on enplanements "to provide relief from rents and minimum annual guarantees to on-airport car rental, on-airport parking, and in-terminal airport concessions."
FAQ Guidance on Airport Coronavirus Response Grant Program
Grant Awards, Applications and Agreements. In the FAQ, FAA indicates that agency personnel will reach out to each airport sponsor to provide an opportunity to submit a grant application. FAA will then make a simplified grant agreement available for execution within days of receiving a completed application from the airport. The deadline for applying for a grant under the ACRGP is June 30, 2021.
Concession Relief. The updated FAQ includes details on how airport sponsors can claim the allocation that is available to them for providing relief to concessionaires. Specifically, FAA identified the amount that has been allocated to each airport for concession relief. Airport sponsors will have to submit a concession-relief grant application to FAA; this is a separate application from the one necessary to obtain grant funds that are available directly for airport use. After applying, the airport will develop a relief plan on how they plan to use their allocation and conduct a consultation with their concession stakeholders. The relief plan will be submitted to FAA for review and acceptance before payment and reimbursement will be processed.
Airport sponsors are encouraged to review all the FAQs relating to concession relief (Q-CR1 through Q-CR15), including the example of how to submit a request for FAA to approve an airport's concession relief grant payment.
Q-CR1: How does an airport sponsor claim its allocation available to provide relief to airport concessions?
A: An airport sponsor seeking to use CRRSA funds to provide relief from rent and minimum annual guarantee (MAG) obligations to eligible airport concessions may apply for that allocation in an application for an Airport Coronavirus Response Grant Program grant agreement. FAA will transmit a concession relief grant application for each primary airport receiving Airport Coronavirus Response Grant Program grants. An airport sponsor wishing to decline its Airport Coronavirus Response Grant Program concession relief grant(s), should not submit application(s), but rather notify its ADO of its intent to decline.
Q-CR2: How do airport sponsors provide relief to airport concessions?
A: If an airport sponsor accepts its CRRSSA allocation for concession relief, the sponsor must provide relief from rent and MAG to on-airport car rental, on-airport parking, and in-terminal airport concessions (as defined in 49 CFR part 23) (collectively, "concessions"). CRRSA requires an airport sponsor taking a concession relief grant to provide such relief on a proportional basis, described at Q-CR15, until the sponsor has provided relief equaling the total allocation amount. The airport sponsor may retain up to 2 percent of the allocation amount for relief administration. Only relief associated with rent due for concession occupancy or commercial use after December 27, 2020 (the date of CRRSA was enacted) is eligible for grant payment.
Q-CR4: How does an airport sponsor allocate concession relief funds among its concessions?
A: An airport sponsor must provide this relief to each airport concession in an amount that reflects each eligible airport concession's proportional share of the total amount of rent and MAG of all eligible airport concessions at the airport. This is a set of ratios of each eligible concession's contribution to the total amount of rent and MAG income remitted to the airport by all members of the eligible population of remitting concessions. An airport sponsor must account for proportionality on 100% of the grant allocation, but it may reserve up to 2% of the allocation to administer the relief. An airport sponsor does not have to demonstrate proportionality for grant relief provided beyond 100% of the grant allocation. Eligible concessions must be subject to a valid agreement to remit rent or MAG at the specific airport after December 27, 2020, and remain a going concern (an entity that is either providing minimum acceptable services, or is otherwise ready, able and available to provide ongoing minimum acceptable services as agreed to with the sponsor). Guidance on planning each airport's associated concession relief grant payment request is provided at Q-CR15, below.
Q-CR10: How can an airport sponsor determine a base-line time period upon which to calculate proportionality for rent relief amongst eligible concessions?
A: Once an airport sponsor has determined its population of eligible concessions, it should calculate each concession's appropriate proportional share, using an appropriate base-line time period. The base-line time period should be relevant to the expected duration of relief to be provided, but in no case should the base-line time period be after the 1st quarter of 2020.
Q-CR12: Can an airport sponsor apply some requirements upon concessions, and accept Airport Coronavirus Response Grant Program grants for concession relief?
A: Yes. Sponsors may include some valuable considerations in exchange for rent relief, even if that rent relief is to be funded by Airport Coronavirus Response Grant Program concession relief grants, provided these considerations are equitably applied to all concessions at the airport. For example:
Today the Federal Aviation Administration (FAA) announced grant awards for the $2 billion that the agency is making available under the Airport Coronavirus Response Grant Program (ACRGP) and that Congress approved in late December as part of the Coronavirus Response and Relief Supplemental Appropriation Act (CRRSA). In addition, FAA released an updated frequently asked questions (FAQ) document that provides guidance for airport sponsors on, among other things, how airport sponsors can claim the allocation that is available to them for providing relief to concessionaires. FAA's FAQ also indicates that ACRGP grant agreements will include a special condition that airport sponsors implement a policy requiring persons to wear a mask at all times while in the public areas of the airport, except where certain exemptions apply.
As reported in our January 19 Airport Alert, FAA had already released an FAQ document that provided a number of details on how FAA plans to administer the ACRGP. As airport members are likely aware, administration of the ACRGP is similar in many regards to the guidance and processes that have been developed by FAA for airports participating in the Coronavirus Aid, Relief, and Economic Security (CARES) Act grant program. However, the original FAQ guidance on ACRGP did not contain any information about how airports can claim their share of the $200 million that has been made available for concession relief.
A summary of the updated FAA FAQ guidance on ACRGP is provided below, including two notable updates on concession relief and mask requirements at airports. We have also provided a quick recap of how CRRSA requires FAA to distribute the $2 billion. You can find a breakdown of the ACRGP award amounts, including the allocation for concession relief, here. Additional information, including a video briefing on ACRGP and the updated FAQ document, can be found here.
Coronavirus Relief Funding
Commercial Service Airports. Of the total amount available for airports, CRRSA provided $1.75 billion for commercial service and certain cargo airports. Funds will be distributed based on a modified AIP apportionment run. The cargo set-aside will remain intact, and there will be no maximum grant amount or PFC turnback. CRRSA preserves doubled entitlements and retains the $1 million minimum entitlement for smaller primary airports. Remaining funds, to the extent there are any, would be distributed based on enplanements.
Non-Primary Commercial Service/General Aviation/Contract Tower Airports. CRRSA included up to $45 million for nonprimary commercial service and general aviation airports. Of that amount, not less than $5 million will be divided equally among nonprimary airports that participate in the contract tower program to cover lawful expenses to support operations.
Concessionaires. CRRSA also provided $200 million to primary airports based on enplanements "to provide relief from rents and minimum annual guarantees to on-airport car rental, on-airport parking, and in-terminal airport concessions."
FAQ Guidance on Airport Coronavirus Response Grant Program
Grant Awards, Applications and Agreements. In the FAQ, FAA indicates that agency personnel will reach out to each airport sponsor to provide an opportunity to submit a grant application. FAA will then make a simplified grant agreement available for execution within days of receiving a completed application from the airport. The deadline for applying for a grant under the ACRGP is June 30, 2021.
Concession Relief. The updated FAQ includes details on how airport sponsors can claim the allocation that is available to them for providing relief to concessionaires. Specifically, FAA identified the amount that has been allocated to each airport for concession relief. Airport sponsors will have to submit a concession-relief grant application to FAA; this is a separate application from the one necessary to obtain grant funds that are available directly for airport use. After applying, the airport will develop a relief plan on how they plan to use their allocation and conduct a consultation with their concession stakeholders. The relief plan will be submitted to FAA for review and acceptance before payment and reimbursement will be processed.
Airport sponsors are encouraged to review all the FAQs relating to concession relief (Q-CR1 through Q-CR15), including the example of how to submit a request for FAA to approve an airport's concession relief grant payment.
Q-CR1: How does an airport sponsor claim its allocation available to provide relief to airport concessions?
A: An airport sponsor seeking to use CRRSA funds to provide relief from rent and minimum annual guarantee (MAG) obligations to eligible airport concessions may apply for that allocation in an application for an Airport Coronavirus Response Grant Program grant agreement. FAA will transmit a concession relief grant application for each primary airport receiving Airport Coronavirus Response Grant Program grants. An airport sponsor wishing to decline its Airport Coronavirus Response Grant Program concession relief grant(s), should not submit application(s), but rather notify its ADO of its intent to decline.
Q-CR2: How do airport sponsors provide relief to airport concessions?
A: If an airport sponsor accepts its CRRSSA allocation for concession relief, the sponsor must provide relief from rent and MAG to on-airport car rental, on-airport parking, and in-terminal airport concessions (as defined in 49 CFR part 23) (collectively, "concessions"). CRRSA requires an airport sponsor taking a concession relief grant to provide such relief on a proportional basis, described at Q-CR15, until the sponsor has provided relief equaling the total allocation amount. The airport sponsor may retain up to 2 percent of the allocation amount for relief administration. Only relief associated with rent due for concession occupancy or commercial use after December 27, 2020 (the date of CRRSA was enacted) is eligible for grant payment.
Q-CR4: How does an airport sponsor allocate concession relief funds among its concessions?
A: An airport sponsor must provide this relief to each airport concession in an amount that reflects each eligible airport concession's proportional share of the total amount of rent and MAG of all eligible airport concessions at the airport. This is a set of ratios of each eligible concession's contribution to the total amount of rent and MAG income remitted to the airport by all members of the eligible population of remitting concessions. An airport sponsor must account for proportionality on 100% of the grant allocation, but it may reserve up to 2% of the allocation to administer the relief. An airport sponsor does not have to demonstrate proportionality for grant relief provided beyond 100% of the grant allocation. Eligible concessions must be subject to a valid agreement to remit rent or MAG at the specific airport after December 27, 2020, and remain a going concern (an entity that is either providing minimum acceptable services, or is otherwise ready, able and available to provide ongoing minimum acceptable services as agreed to with the sponsor). Guidance on planning each airport's associated concession relief grant payment request is provided at Q-CR15, below.
Q-CR10: How can an airport sponsor determine a base-line time period upon which to calculate proportionality for rent relief amongst eligible concessions?
A: Once an airport sponsor has determined its population of eligible concessions, it should calculate each concession's appropriate proportional share, using an appropriate base-line time period. The base-line time period should be relevant to the expected duration of relief to be provided, but in no case should the base-line time period be after the 1st quarter of 2020.
Q-CR12: Can an airport sponsor apply some requirements upon concessions, and accept Airport Coronavirus Response Grant Program grants for concession relief?
A: Yes. Sponsors may include some valuable considerations in exchange for rent relief, even if that rent relief is to be funded by Airport Coronavirus Response Grant Program concession relief grants, provided these considerations are equitably applied to all concessions at the airport. For example:
- Sponsors may require certifications that each eligible concession remains a going concern and be fully ready, able and available to provide relevant services, regardless of operating levels of service.
- Sponsors may include phased re-opening schedules and expect cooperation with regard to varying levels of service during periods of changing demand.
- Sponsors may provide rent relief to a concession that is in arrears for rent, if the concession is providing minimum acceptable services, or demonstrating that it is ready, able and available to provide minimum acceptable services, and the airport sponsor elects to provide forbearance.
Sponsors should not request concession relief reimbursement for concessions that are not a going concern. Sponsors should not impose or induce lease terms unrelated to those valuable and necessary considerations to enhance coordination of operations during the pandemic and recovery. Sponsors should not compel new lease agreements, or extensions to leases beyond the duration of occupancy correlated to the amount of rent relief provided.
Q-CR14: Should an airport sponsor consult with its concession stakeholders on its relief program?
A: Yes, the sponsor should consult with its concession community, generally, to gather suggestions, and preview its plan. In addition, it should conduct one-on-one consultation with ACDBEs. The sponsor cannot alter proportionality of relief provided, but may adjust timing or format of relief.
Mandating Masks Inside Airports. In the FAQ, FAA indicated that ACRGP grant agreements will contain a special condition that airport sponsors implement a policy requiring all persons to wear a mask at all times while in the public areas of the airport, except where certain exemptions apply. FAA stated that they are including this condition pursuant to President Biden's recent Executive Order that directed the Centers for Disease Control and Prevention (CDC) to require that masks be worn in the airport environment. Airports will be required to comply with the special condition until the Executive Order is no longer in effect.
Q-GA17: Are there any requirements related to mandating masks inside airports associated with the Airport Coronavirus Response Grant Program?
A: Yes. Under the Executive Order 13998, Promoting COVID-19 Safety in Domestic and International Travel, (Executive Order 13998) issued on January 21, 2021, the Secretary of Transportation must require masks to be worn in compliance with the CDC Order in airports, consistent with applicable law. To accomplish this requirement, and to achieve the legislative purposes of preventing and responding to coronavirus disease 2019 (COVID-19), each Airport Coronavirus Response Grant Program grant agreement will include a special condition that the airport sponsor implement a policy requiring all persons wear a mask, in accordance with the CDC Order and TSA Security Directive, as applicable, at all times while in all public areas of the airport property, except to the extent exempted under those requirements. The CDC and TSA requirements exempt certain categories of persons from the mask-wearing mandate: a child under the age of two, a person with a disability who cannot wear or safely wear a mask because of the disability, or a person for whom wearing a mask would create a risk to workplace safety, health, or job duties. This special condition requires the airport sponsor continue to require masks until Executive Order 13998 is no longer effective. Failure to comply with this special condition may result in suspension of payments or termination of the grant, consistent with 2 CFR §§ 200.339 and 200.340.
Other Highlights. The FAQ released today contains many details on how airports can obtain their allocation of funds under the ACRGP, including permissible uses of grant funds, funds for airport development, requesting reimbursements, workforce retention requirements, grant closeouts, among other issues. AAAE summarized these details in its January 19 Airport Alert
