Contents

2. 1 Contents Alternative Sources of Revenue = Economic Growth for Community and Air Service Development Strategic Development Plan Airport Program - Infrastructure Financing Third Party Development Program – Public Private Partnership Marketing Questions and Answers Conducted a great-deal of research to understand your issues and objectives for this engagement Used this information to identify our team and formulate an approach to solve these issues and deliver a success master plan We understand that Planning the Future Development of the Airport Must Recognize Numerous Interrelated Complexities and Challenges These include: Level of service Capacity Funding - and competing needs for funds Industry Changes - that affect airport business models Uncertainty (especially regarding your initiatives to plan for a replacement airport)Conducted a great-deal of research to understand your issues and objectives for this engagement Used this information to identify our team and formulate an approach to solve these issues and deliver a success master plan We understand that Planning the Future Development of the Airport Must Recognize Numerous Interrelated Complexities and Challenges These include: Level of service Capacity Funding - and competing needs for funds Industry Changes - that affect airport business models Uncertainty (especially regarding your initiatives to plan for a replacement airport)

3. 2 Alternative Sources of Revenue:Current Distribution of Airport Revenue Tiffany – do we have an update of this Chart – more recent than 2005?Tiffany – do we have an update of this Chart – more recent than 2005?

4. 3 Alternative Sources of Revenue:Commercial Property Development Non-terminal area development Closely tied to master planning and land use plans May entail interim uses until aeronautical or aviation use materializes Longer-term uses require highest and best use assessment Requires clear policies regarding airport role and control versus tenant or 3rd party development

5. 4 Strategic Development Plan – Assess Current Program Creating and implementing a strategic plan for the commercial development of airport land can facilitate responding to or creating a market for such development Assess current Program—Existing facilities and current leases Review and summarize documents of the existing leased parcels Create a document management system Perform a highest-and-best use review Create a property management plan Initiate a redevelopment plan for existing facilities Document changes to existing leasing policies

6. 5 New Program - Commercial land leasing policies, goals and objectives Establish commercial development of airport land as a long term program Determine the uses/developments that will not be allowed Integrate commercial development protocols Establish rental formulae by classification Establish maximum lease terms per parcel classification Identify lease procurement program/negotiated versus competitive bid Develop commercial development design criteria Create handout for development community Conduct outreach program for development community Strategic Development Plan - Policies

7. 6 Strategic Development Plan – Market Analysis New Program - Commercial real estate market characteristics Classification of land by type and according to the physical characteristics of the land Absorption of land by category across development phases Allocation of land areas by category and by development phase

8. 7 Strategic Development Plan – Regulatory Considerations Federal and State regulations: FAA and State grant funding assurances require fair market value rentals for aeronautical land leases Rates must be fair, reasonable and non discriminatory Rates and charges are typically allocated between Airfield, Terminal and Landside cost centers Rates and charges for commercial developments are typically classified by type of Airport user Consider Noise Grant Program Guidance Letter 08-02 dated February 1, 2008 as amended - Reuse Plans Add FAA logo at lower right area of text portion of slide – pleaseAdd FAA logo at lower right area of text portion of slide – please

9. 8 Strategic Development Plan – Lease Procurement Alternatives for Initiation of Development: Direct negotiation Proposal Review Requirements Business Plan Site Plan Financial Plan Marketing Plan References and Experience M/WBE Plan, Jobs Creation, etc. Criteria for selection or rejection Requests for Qualifications/Proposals Competitive process based on weighted criteria Due Diligence required for both methods

10. 9 Strategic Development Plan – Sample Matrix

11. 10 Airport Program - Infrastructure Financing Direct Negotiation – Airport provided infrastructure Airport outlines a development area and parcels are available on a sequenced basis Parcels are leased on a first come basis for qualifying lessees with approved development programs per the Leasing Policy The lessee builds improvements and infrastructure on the site - subject to the development guidelines of the Airport The individual parcels are development ready (utilities/roads) Ground Rental Rates and Lease Term will be defined by the Leasing Policy based on the type of development Airport initiates next phase of infrastructure construction Box a the top bullet need background fill in the color that matches the earlier slide 4. I can only get it to background color the entire slide! Box a the top bullet need background fill in the color that matches the earlier slide 4. I can only get it to background color the entire slide!

12. 11 Airport Program - Infrastructure Financing Direct Negotiation – Developer provided infrastructure Similar criteria and processes as for Airport provided infrastructure program The individual parcels are not rough graded and there is limited or no base infrastructure to the premises boundary The lessee/developer builds required off site infrastructure on behalf of the Airport in addition to on site improvements All infrastructure is subject to the development guidelines of the Airport Bond Ordinances, local regulations, and Use Agreement provisions may control the construction procurement processes and limitations on rent credits or repayment provisions

13. 12 Airport Program - Infrastructure Financing Competitive Proposals or Bids can include Developer provided infrastructure Airport outlines a development area and parcels. RFP includes development criteria with respect to lessee qualifications, Ground Rent and Lease Term. RFP includes the requirement that the lessee/developer builds required off site infrastructure on behalf of the Airport. Net cost to Airport for off site infrastructure could be a selection criteria component.

14. 13 Third Party Development - Public Private Partnership With consensus among the public participants and airport stakeholders a PPP may provide the best alternative for commercial development Alternative 1 - Design/Build Single contract awarded to a private partner for the design and construction of the facility Development Agreement – and Ground Lease if build to suit Financing is provided by the public partner Airport Revenue Bonds Industrial Revenue Bonds Ownership of the improvements remains with the public partner (Public partner as sole owner) Box a the top bullet need background fill in the color that matches the earlier slide 4. I can only get it to background color the entire slide! Box a the top bullet need background fill in the color that matches the earlier slide 4. I can only get it to background color the entire slide!

15. 14 Third Party Development - Public Private Partnership Alternative 2 - Design/Build/Operate A single contract awarded to a private partner for the design and construction of the facility, and operation of the facility after completion Operating Agreement in addition to development agreement and ground lease Financing is provided by the public partner Ownership of the improvements remains with the public partner (Public Partner is the sole owner)

16. 15 Third Party Development - Public Private Partnership Alternative 3 - Design/Build/Partially Finance A single contract awarded to a private partner for the partial financing, design and construction of the facility Development Agreement will contain financing provisions Ownership of the improvements lies with the majority holder of the equity invested If majority equity is provided by the private partner, and ownership of the completed building is transferred to the public sector after debt is retired (or upon completion if desired for tax reasons) Operation of the facility may be with the private or public partner

17. 16 Third Party Development - Public Private Partnership Alternative 4 - Design/Build/Finance A contract awarded to a private partner for the financing, design and construction of the facility Ownership of the improvements lies with the equity investors, and ownership of the completed building is transferred to the public sector after debt is retired (or upon completion if desired for tax reasons) Operation of the facility may be with the private or public partner Public partner may provide the land for the facility Some variation on the form of public/private partnership

18. 17 Marketing - Development Scenarios and Concepts Development Scenarios Market-based scenarios based on regional trends Determine complementary land uses Determine Leasing Program criteria Development Concepts Determined by Airport or Developer Estimated acreage of each land use type Potential facility sizes within each acre Potential infrastructure requirements Projected activity levels Aircraft operations Vehicle movements Employment

19. 18 Marketing - Strategic Marketing Outreach Plan New Program – Marketing Introduce commercial leasing program to developers Educate the surrounding communities and any other citizen/political group The marketing program will identify and address the following: Adjacent land owner or competitor developer issues Preferred communication mechanisms Brokerage fees Chamber of commerce participation Required inter-local agreements with respect to shared development costs, tap in fees, utility and roadway interface, etc.

20. 19 Thank You!