City of Pompano Beach v. F.A.A., 84-5331

• Decision Date: 04 November 1985
• Docket Number: No. 84-5331,84-5331
• Citation: 774 F.2d 1529
• Parties: The CITY OF POMPANO BEACH, a Florida municipal corporation, Petitioner, v. FEDERAL AVIATION ADMINISTRATION, Respondent. James C. Brettman, Intervenor.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1529

774 F.2d 1529

The CITY OF POMPANO BEACH, a Florida municipal corporation, Petitioner, v. FEDERAL AVIATION ADMINISTRATION, Respondent.

James C. Brettman, Intervenor.

No. 84-5331.

United States Court of Appeals, Eleventh Circuit.

Nov. 4, 1985.

Donald C. Roberge, City Atty., Pompano Beach, Fla., for petitioner.

Mark L. Gerchick, Paul, Hastings, Janofsky & Walker, Judith Richards Hope, Leonard A. Ceruzzi, Washington, D.C., for J. Brettman.

On Petition for Review of an Order of the Federal Aviation Administration.

Before RONEY and TJOFLAT, Circuit Judges, and BROWN ^*, Senior Circuit Judge.

TJOFLAT, Circuit Judge:

Petitioner, the City of Pompano Beach, Florida, seeks direct review of a determination by the Federal Aviation Administration (FAA) ¹ that the City has been operating its airport in violation of section 308(a) of the Federal Aviation Act of 1958, as amended, 49 U.S.C.App. Sec. 1349(a) (1982), ² and in noncompliance with the terms and conditions of the deed which transferred ownership of the airport property from the United States to the City. ³ The FAA based this determination on a finding that the City was unjustly discriminating against an applicant for a lease to do business at the City's airport and was, in effect, granting an exclusive right to the incumbent lessees. Holding that there was substantial evidence in the record to support the factual findings of the agency and that the agency's application of the governing law to those facts was reasonable, we affirm.

I.

The facts in this case are crucial to our holding; they involved the protracted attempt by Pompano Beach businessman and aviator James Brettman, ⁴ starting May 30, 1979, to lease between ten and twelve acres at the Pompano Beach Air Park (Air Park) to construct aircraft hangars and covered storage space for airplanes. From the beginning, Brettman sought a lease from the City which would allow him to be competitive with incumbent lessees providing similar services at the Air Park. Brettman's original plan was only to sell hangar and storage space to the owners of small, single and twin-engine airplanes using the Air Park and not to offer the general aviation services provided by the other Air Park tenants. Any services not provided by the other tenants might be made available at the Brettman facility solely for aircraft based there, he said.

At the time of Brettman's request, aircraft storage services were being provided at the Air Park by two incumbent fixed base operators, ⁵ Pompano Air Center and Pompano Aviation. Pompano Air Center was owned and operated by John Becker. In 1977, Pompano Air Center entered into a twenty-one-year lease with the City. The lease imposed upon Pompano Air Center no obligation to spend money for the improvement of its facilities and provided that Pompano Air Center would be governed by the City's standards for fixed base operators and Air Park tenants adopted in 1967. Pompano Air Center's lease was amended in August 1978; the City agreed that, in return for Pompano Air Center's commitment to construct $200,000 worth of airplane hangars and other facilities at the Air Park, the City would extend the company's lease to thirty years, beginning in 1978. The lease of the second fixed base operator on the Air Park at the time of Brettman's application, Pompano Aviation, is not pertinent to these proceedings.

Brettman's application for a lease was referred to the Pompano Beach Air Park Advisory Board. The Board formally considered the matter for the first time at its June 19, 1979 meeting. At that meeting, the Board tabled Brettman's application for three months pending further study of his proposed "condominium/cooperative" building concept and the impact additional hangar facilities would have upon the existing fixed base operators. Significantly, several members of the Advisory Board said they were concerned that the Brettman proposal would take lucrative hangar service business away from Pompano Air Center and Pompano Aviation, leaving them with the less profitable fuel service, parking facilities, line service, and flight school. They also noted that Pompano Air Center had thirty-six vacant hangar units and that the two existing fixed base operators were leasing land they were not yet using. Becker, the owner of Pompano Air Center, suggested that, if the Board were subsequently to recommend the City's acceptance of Brettman's application, it should require Brettman to come onto the Air Park as a full fixed base operator, providing a litany of aviation services over and above just hangar storage space. He protested that it would be unfair to make the two existing fixed base operators provide such services, at great expense to them, and not to impose the same obligation on Brettman.

On June 22, 1979, Brettman wrote the FAA's regional compliance specialist about the situation, saying that his application for a lease met the City's published minimum standards ⁶ for leasing land at the Air Park and that the City's delay in taking action thereon was discriminatory. On July 10, 1979, the Advisory Board unanimously reaffirmed its previous decision to table Brettman's application.

On July 26, 1979, Pompano Aviation was sold to Executive Aviation of Pompano, which commenced doing business under a new lease with the City on that same day. One of the conditions of the sale was that the City could update and modify Pompano Aviation's lease. The City did so, making a new lease with Executive which provided that the company would be a fixed base operator at the Air Park for a term of thirty years and would expend $100,000 on improvements to the leased property. The new lease also required Executive to adhere to the provisions of the City's 1967 minimum standards for fixed base operators and tenants.

Two days before Executive Aviation's new lease was signed, the Pompano Beach City Commission adopted by resolution a revised set of minimum standards applicable to Air Park tenants and fixed base operators. These revised standards, formulated by the Air Park Advisory Board, had been under development for some time, according to Air Park's manager.

Brettman next discussed his application with the Advisory Board at its regular monthly meeting of September 11, 1979; ⁷ Brettman presented the Board with a scale model of his proposed hangar facility. Becker appeared and objected to Brettman's proposal because the City presently had two operators providing aviation services at the Air Park seven days a week. He renewed his position that Brettman should not be permitted to come onto the Air Park and siphon the existing fixed base operators' profitable hangar business, taking "the gravy off the top" and leaving them with only labor intensive and less profitable services. Despite Becker's opposition, the Advisory Board voted three to two to recommend that the City Commission approve Brettman's proposal.

On October 10, 1979, the Pompano Beach City Attorney advised the city manager that the City's minimum standards did not permit a lessee, as a mere Air Park tenant, to rent aircraft storage space; rather, to rent such space the lessee must qualify as a fixed base operator, under one of five categories set out in the City's minimum standards, and provide more complete aviation services. In response, Brettman, on November 11, 1979, changed his request and sought a fixed base operator lease.

During the next year, Brettman and the city attorney attempted to negotiate a lease. Brettman wanted a fixed base operator lease under the flight instruction category of the standards; he proposed a lease for thirty years with a required minimum investment of $150,000. In addition to providing aircraft storage space, Brettman was proposing a flight training facility with at least one instructor, two aircraft, and classroom space. The city attorney counteroffered the City's "standard lease," which contained provisions and requirements not included in the existing fixed based operators' leases.

On December 16, 1980, the Air Park Advisory Board recommended to the City Commission that the City enter into a twenty-year lease with Brettman with two provisos: that Brettman be required to spend at least $200,000 on facilities and that his ability to sublease hangar space be limited to a period of one year, a limitation not included in the existing leases. The City offered Brettman the recommended lease. He rejected the offer because the lease term was shorter than those of existing fixed base operators and he would be required to make a larger capital investment. Brettman returned to the Advisory Board on several occasions during the next eighteen months in an attempt to eliminate these objectionable conditions. He failed, and in February 1981, November 1981, and April 1982 the City repeated the same offer, a twenty-year lease with a minimum required investment of $200,000.

On February 10, 1981, Brettman notified the Air Park manager that he wished to amend his application for a fixed base operator lease, under the flight instruction category of the City's standards, to request a fixed base operator lease encompassing the same services and facilities as Pompano Air Center and Executive Aviation. In essence, Brettman sought permission to operate at the Air Park on precisely the same basis as the incumbent fixed base operators. The City repeated its twenty-year lease offer, provided that Brettman demonstrate his financial responsibility to the City's satisfaction; thus, they asked him to submit to the Air Park Advisory Board detailed financial information about his proposed fixed base operation. Brettman countered with a proposed lease that reflected the changes necessitated by his decision to become a full-service fixed base operator. The form of Brettman's proposed lease replicated exactly the form of the leases held by Pompano Air Center and Executive Aviation. The city attorney, on April 9, 1981, rejected Brettman's proposal...