Current through August 30, 2024
(a) This section
describes methods for setting the term of a land lease and extending an
existing land lease, including a lease in holdover, except for a land lease
term or term extension subject to
17 AAC 45.235. A term or term
extension under this section is subject to the limitations of
17 AAC 45.215 and
17 AAC 45.220 and the
considerations in (b) of this section.
(b) In setting or extending the term for a
land lease, the department will consider
(1)
the applicant's actual or proposed development and use of the
premises;
(2) sound airport
planning and anticipated needs for security, safety, maintenance, and operation
of the airport;
(3) future
development needs of the airport;
(4) applicable covenants running with the
land and restrictions in the state's title to airport property;
(5) the amount of investment, purchase price,
fair market value, or remaining useful life of permanent improvements
documented in the application, as applicable;
(6) the applicant's plan for remediation of
any environmental contamination if the applicant did not cause or materially
contribute to the contamination; and
(7) the proposed method and terms of
financing the applicant's investment; and
(8) the best interest of the state.
(c) For a new lease that is not a
successive lease, the department will grant an initial term that does not
exceed the number of years shown in the table in (j) of this section that
corresponds to the greater of
(1) the total
of the applicant's
(A) purchase price,
excluding financing costs, of pre-existing permanent improvements owned by the
applicant on the premises, in compliance with (h)(2) of this section and not
previously used by the applicant to set lease term;
(B) existing investment in permanent
improvements owned by the applicant not previously used to set lease term, in
compliance with (h)(1) of this section; and
(C) proposed new investment excluding
financing costs, in an amount equal to the reasonable cost of one or more of
the following, in compliance with (h)(1) of this section:
(i) premises, boundary, and as-built
surveys;
(ii) permanent
improvements and any associated site development work and site development
materials on the premises;
(iii)
remediation of contamination for which the applicant is not responsible under
this chapter either on the premises or migrating from the premises;
and
(iv) extension of a road,
taxiway, or utility that originates on or off the airport to the premises;
or
(2) the
dollar amount of a loan in compliance with (h)(3) of this section.
(d) For a successive lease, the
department will grant an initial term that does not exceed the greatest of
(1) the number of years shown in the table in
(j) of this section that corresponds to the total of the factors described in
(c)(1) of this section;
(2) the
number of years shown in the table in (j) of this section that corresponds to
the total of
(A) the fair market value, as
determined by an appraisal performed within the previous year, of existing
permanent improvements owned by the applicant on the premises; and
(B) the applicant's proposed new investment
to perform activities described in (c)(1)(C) of this section in compliance with
(h)(1) of this section;
(3) the number of years of remaining useful
life of the principal applicant-owned permanent improvement on the premises, up
to the total cumulative years of term previously granted for the previous lease
on the basis stated in (c)(1) of this section; or
(4) five years.
(e) For extension of an existing lease with
less than one year of remaining term or in holdover, after giving public notice
of the proposed extension under
17 AAC 45.215(c)
and considering the factors in (b) of this section, the department will grant a
term extension that does not exceed five years less than the longest term the
application would support as the initial term of a successive lease under (d)
of this section.
(f) For extension
of an existing lease with one year or more of remaining term, after giving
public notice of the proposed extension under
17 AAC 45.215(c)
and considering the factors in (b) of this section, the department will grant a
term extension that does not exceed five years less than the period determined
under (c) of this section.
(g) If
more than one of the methods provided in (c) - (f) of this section can be
applied to determine the maximum term of the new lease, successive lease or
term extension, the lessee has the option to choose which method the department
must use.
(h) An application for a
term or term extension under (c) - (f) of this section must include all
documentation required under
17 AAC 45.230, and must satisfy
each of the following conditions:
(1) a
proposed or existing investment in the premises, not previously used to set
lease term, to perform activities described in (c)(1)(C) of this section must
be
(A) approved by the department in an
airport building permit issued under
17 AAC 45.280 or in an airport
building permit or other written approval under 17 AAC 40 in effect before
March 28, 2002; and
(B) documented
by the applicant's submission under
17 AAC 45.230(a) (1) no later than the later of December 31,
2008, or 60 days after the expiration of the applicable airport building
permit; the department will extend this deadline for submission of
documentation if the applicant shows good cause for an extension;
(2) the purchase price of existing
permanent improvements on the premises must be
(A) for a purchase in a fair market
transaction not entered into primarily to gain lease term;
(B) not previously used by the applicant as
the basis for determination of lease term;
(C) for privately-owned permanent
improvements; site development work and site development materials, including a
driveway, parking area, gravel, and pavement, are ineligible for inclusion in a
purchase price to support term because they become property of the state upon
placement; and
(D) documented by
the applicant's submission under
17 AAC 45.230(a) (2) no later than the later of December 31,
2008, or two years after the date of the purchase;
(3) the dollar amount of a loan other than
for purchase of improvements on the premises may be used only to the extent
(A) the loan is a new loan from a bank or
other commercial lending institution for operating or capital expenses of the
applicant's operations at the airport;
(B) the bank or other commercial lending
institution providing the loan conditions the loan on the term or term
extension;
(C) the applicant
applies for the extension and submits supporting documentation from the lender;
and
(D) the dollar amount of the
loan applied to support term does not exceed the fair market value of
lessee-owned permanent improvements on the premises, plus any proposed
investment by the applicant in new permanent improvements.
(i) The term of any extension that
the department grants under (e) - (f) of this section
(1) for term based on investment in new
improvements must be added to the end of the lease; or
(2) for term based on purchase price must be
added to the end of the lease, less any lease term or term extension remaining
as of the earlier of the date of the department's consent to the lease
assignment or closing of the purchase of permanent improvements.
(j) The department will use the
following table, to determine the maximum lease term or lease term extension
the department may grant under (c) or (d) of this section:
Fair Market Value, Purchase
Price, or Investment of at
Least the Following
Dollar Amount Term of Years
7,500615,000722,500830,000937,5001045,0001152,5001260,0001367,5001475,0001582,5001690,0001797,50018105,00019112,
Authority:
AS
02.15.020
AS
02.15.060
AS
02.15.090
AS
02.15.210
