FAA says no to airport land sale at Oceanside

June 12, 2008

The FAA has told the city of Oceanside, Calif., that it cannot sell almost 15 acres of property adjacent to the airport because the land is needed for aeronautical purposes and was purchased with federal aviation grant funds.

That leaves the city caught between two conflicting agreements it made with regard to the land. Under its deal with the federal government, the city agreed to develop the land for aeronautical purposes within five years of its purchase in 2003. The city also agreed that it could not sell the land without FAA approval. But under the purchase agreement with Deutsch Co., the city agreed that if it had not developed the land within five years, Deutsch Co. could buy it back at the same price the city paid—a right Deutsch’s successor company, AELD, now wants to exercise.

The debate over the property comes on the heels of the city’s decision to hire a private management firm to run the airport in an agreement that promised $21 million in development funding over the next 25 years. That promised development includes construction of 174,000 square feet of hangar space on the contested property.

“Because that construction has not been completed within the five-year timeframe from the date the property was purchased, the city is vulnerable to the claims of both the FAA and AELD,” said Bill Dunn, AOPA vice president of local airport advocacy. “Just as positive development begins and the future brightens for the airport, this wrinkle pops up.”

AOPA will work closely with the city and FAA to ensure that the property in question continues to remain part of the airport and is developed to provide aviation-related services.

In a June 9 letter to Oceanside, the FAA explained that the agency “considers the city’s agreement with the Deutsch Company to be subordinate to the federal contractual agreement.” The letter goes on to explain that the FAA is denying the city’s request to sell the property on the grounds that “the subject property is still needed for the aeronautical purposes for which it was acquired.”

The city council was set to meet June 11 to consider its next step.