Regulatory Alert: AAAE Raises Concerns with FAA's Draft Policy on Processing Land Use Changes
October 19, 2022
On October 18, AAAE filed comments in response to the Federal Aviation Administration's (FAA) draft policy that outlines how the agency will process and evaluate an airport sponsor's request for a land use change on federally acquired or federally conveyed airport land. One of the more significant changes proposed by FAA would be requiring airports to obtain a letter of consent or approval for each proposed non-aeronautical or mixed use project and lease for such land. The approval or consent would only remain in effect for the duration of the lease term, which would require airports to return to FAA to extend or renew the lease.
In our comments, AAAE acknowledged that FAA has the authority to approve non-aeronautical land use designations on federally acquired or federally conveyed land, which includes ensuring that a proposed use does not interfere with the safety of aircraft operations. However, we expressed significant concerns that FAA's proposal to review specific projects and leases would be an unnecessary overreach into airport land use decision making, inhibit non-aeronautical land development, consume a significant amount of FAA and airport resources, and make it more difficult for airports to remain as financially self-sustaining as possible. We urged FAA to reconsider the proposed framework and maintain existing policies—which allow airports to work with FAA to designate areas for non-aeronautical use before pursuing lease negotiations—especially because FAA never articulated any concern or problem justifying the changes.
You can read AAAE's comments here. We appreciate everyone who submitted feedback regarding the proposed policy, and we are especially grateful for Peter Kirsch and Catherine van Heuven from Kaplan Kirsch & Rockwell who helped review and develop AAAE's response.
Background. Under current law, FAA has the authority to convey federal surplus property and provide funding for airports to acquire land when the land is needed for “airport purposes,“ such as for an aeronautical use (e.g., runway protection zone) or to serve as a noise buffer. Airports have received land from the federal government for decades through a number of different programs. This federally conveyed or federally acquired land must typically be used for airport purposes unless FAA approves or consents to a non-aeronautical use.
In September, FAA released the proposed policy for the purpose of clarifying its practice for processing requests from airports for land use changes on federally acquired or federally conveyed land. As proposed, FAA would require airports to obtain a letter of consent or approval for any non-aeronautical and mixed use project or lease, which would be valid for the duration of the lease term. FAA also proposed to limit releases only to circumstances where the airport proposes the sale or conveyance of federally acquired or federally conveyed land.
Summary of AAAE's Response to FAA. Our primary recommendation was for the agency to continue its existing practice where it reviews and approves non-aeronautical land use designations on federally acquired or federally conveyed land, including any reasonable conditions on future development that are necessary to ensure the safety of aircraft operations. However, we strongly urged FAA to restrain from overreaching and reviewing every single project and lease that the airport proposes for a certain piece of land. We emphasized that allowing airports to work with FAA early to designate areas as non-aeronautical before engaging with private developers is critical to providing airports with certainty over how the land can be developed and used, which allows airports to negotiate and execute leases and other land-related transactions more effectively.
If FAA is inclined to move forward, we asked FAA to implement a dozen recommendations for improving the proposed policy and minimizing its potential impact on non-aeronautical land development projects. Some of these recommendations include:
• Eliminating the proposed requirement that the FAA's letter of approval or consent is only valid for the duration of the lease term;
• Providing an analysis on how the NEPA environmental review process will apply or not apply when an airport seeks to obtain FAA approval for a specific non-aeronautical or mixed use project and when an airport seeks to extend a lease term with an existing tenant. We further emphasized that environmental reviews associated with each approval or consent could be very time consuming and costly; 
• Explaining how the proposed framework would co-exist with the FAA's separate process for determining whether the agency has authority under Section 163 to regulate land use and any additional actions that are needed to approve a land use change;
• Providing guidelines on the timeframe for airports to receive a response to a request for a letter of approval or consent. This should include imposing a reasonable deadline on local FAA staff, such as 30 days, and deeming an airport's request approved if FAA does not act on the request before the deadline;
• Clarify that federally acquired or federally conveyed land previously designated and approved by FAA as “non-aeronautical“ on an ALP is grandfathered in and does not require additional FAA review and approval for each project that an airport pursues;
• Providing more definitive guidance and clarity on how FAA will determine whether a proposal constitutes a “mixed use“ project and how the proposal applies to “noise land“ and utility or other easements;
• Continuing to allow airports to pursue a release of federal obligations on federally acquired or federally conveyed land if the airport can demonstrate that the parcel of land is not needed for, or cannot be used for, aeronautical use or an airport purpose; and
• Releasing a supplemental proposed statement that provides more detailed information about the need for a change in existing policy, addresses the questions raised in AAAE's letter and others submitted to the docket, and explains the economic or cost impacts that airports are expected to incur because of the changes.
What's Next? FAA will begin to consider nearly 30 comments, including 17 from airport sponsors, that were filed in response to the request for feedback. In the proposal, FAA indicated that it would publish a final version in the Federal Register at a future date. However, given the concerns that we and our airport members have raised, we will be pushing FAA to reconsider the proposed framework and work with AAAE, the airport community, and other stakeholders to propose meaningful updates and improvements to the existing process. This dialogue would also help industry better understand what problems the agency is trying to fix.
Resources on FAA's Draft Land Use Change Policy
• FAA's Draft Policy Regarding Processing Land Use Changes (Sep. 15, 2022) 
• AAAE's September 14 Regulatory Alert on FAA's Draft Policy 
• Kaplan Kirsch & Rockwell's September 16 Airport Law Alert on FAA's Draft Policy 
• AAAE's October 17 Response to FAA's Draft Policy 
• Regulatory Docket for FAA's Draft Policy 
On October 18, AAAE filed comments in response to the Federal Aviation Administration's (FAA) draft policy that outlines how the agency will process and evaluate an airport sponsor's request for a land use change on federally acquired or federally conveyed airport land. One of the more significant changes proposed by FAA would be requiring airports to obtain a letter of consent or approval for each proposed non-aeronautical or mixed use project and lease for such land. The approval or consent would only remain in effect for the duration of the lease term, which would require airports to return to FAA to extend or renew the lease.
In our comments, AAAE acknowledged that FAA has the authority to approve non-aeronautical land use designations on federally acquired or federally conveyed land, which includes ensuring that a proposed use does not interfere with the safety of aircraft operations. However, we expressed significant concerns that FAA's proposal to review specific projects and leases would be an unnecessary overreach into airport land use decision making, inhibit non-aeronautical land development, consume a significant amount of FAA and airport resources, and make it more difficult for airports to remain as financially self-sustaining as possible. We urged FAA to reconsider the proposed framework and maintain existing policies—which allow airports to work with FAA to designate areas for non-aeronautical use before pursuing lease negotiations—especially because FAA never articulated any concern or problem justifying the changes.
You can read AAAE's comments here. We appreciate everyone who submitted feedback regarding the proposed policy, and we are especially grateful for Peter Kirsch and Catherine van Heuven from Kaplan Kirsch & Rockwell who helped review and develop AAAE's response.
Background. Under current law, FAA has the authority to convey federal surplus property and provide funding for airports to acquire land when the land is needed for “airport purposes,“ such as for an aeronautical use (e.g., runway protection zone) or to serve as a noise buffer. Airports have received land from the federal government for decades through a number of different programs. This federally conveyed or federally acquired land must typically be used for airport purposes unless FAA approves or consents to a non-aeronautical use.
In September, FAA released the proposed policy for the purpose of clarifying its practice for processing requests from airports for land use changes on federally acquired or federally conveyed land. As proposed, FAA would require airports to obtain a letter of consent or approval for any non-aeronautical and mixed use project or lease, which would be valid for the duration of the lease term. FAA also proposed to limit releases only to circumstances where the airport proposes the sale or conveyance of federally acquired or federally conveyed land.
Summary of AAAE's Response to FAA. Our primary recommendation was for the agency to continue its existing practice where it reviews and approves non-aeronautical land use designations on federally acquired or federally conveyed land, including any reasonable conditions on future development that are necessary to ensure the safety of aircraft operations. However, we strongly urged FAA to restrain from overreaching and reviewing every single project and lease that the airport proposes for a certain piece of land. We emphasized that allowing airports to work with FAA early to designate areas as non-aeronautical before engaging with private developers is critical to providing airports with certainty over how the land can be developed and used, which allows airports to negotiate and execute leases and other land-related transactions more effectively.
If FAA is inclined to move forward, we asked FAA to implement a dozen recommendations for improving the proposed policy and minimizing its potential impact on non-aeronautical land development projects. Some of these recommendations include:
• Eliminating the proposed requirement that the FAA's letter of approval or consent is only valid for the duration of the lease term;
• Providing an analysis on how the NEPA environmental review process will apply or not apply when an airport seeks to obtain FAA approval for a specific non-aeronautical or mixed use project and when an airport seeks to extend a lease term with an existing tenant. We further emphasized that environmental reviews associated with each approval or consent could be very time consuming and costly; 
• Explaining how the proposed framework would co-exist with the FAA's separate process for determining whether the agency has authority under Section 163 to regulate land use and any additional actions that are needed to approve a land use change;
• Providing guidelines on the timeframe for airports to receive a response to a request for a letter of approval or consent. This should include imposing a reasonable deadline on local FAA staff, such as 30 days, and deeming an airport's request approved if FAA does not act on the request before the deadline;
• Clarify that federally acquired or federally conveyed land previously designated and approved by FAA as “non-aeronautical“ on an ALP is grandfathered in and does not require additional FAA review and approval for each project that an airport pursues;
• Providing more definitive guidance and clarity on how FAA will determine whether a proposal constitutes a “mixed use“ project and how the proposal applies to “noise land“ and utility or other easements;
• Continuing to allow airports to pursue a release of federal obligations on federally acquired or federally conveyed land if the airport can demonstrate that the parcel of land is not needed for, or cannot be used for, aeronautical use or an airport purpose; and
• Releasing a supplemental proposed statement that provides more detailed information about the need for a change in existing policy, addresses the questions raised in AAAE's letter and others submitted to the docket, and explains the economic or cost impacts that airports are expected to incur because of the changes.
What's Next? FAA will begin to consider nearly 30 comments, including 17 from airport sponsors, that were filed in response to the request for feedback. In the proposal, FAA indicated that it would publish a final version in the Federal Register at a future date. However, given the concerns that we and our airport members have raised, we will be pushing FAA to reconsider the proposed framework and work with AAAE, the airport community, and other stakeholders to propose meaningful updates and improvements to the existing process. This dialogue would also help industry better understand what problems the agency is trying to fix.
Resources on FAA's Draft Land Use Change Policy
• FAA's Draft Policy Regarding Processing Land Use Changes (Sep. 15, 2022) 
• AAAE's September 14 Regulatory Alert on FAA's Draft Policy 
• Kaplan Kirsch & Rockwell's September 16 Airport Law Alert on FAA's Draft Policy 
• AAAE's October 17 Response to FAA's Draft Policy 
• Regulatory Docket for FAA's Draft Policy 
