3. Solicitations for Subcontracts, including Procurement of Materials and Equipment. In all solicitations, either by competitive bidding or negotiation made by the Tenant for work to be performed under a subcontract, including procurement of materials, or leases of equipment, each potential sub-contractor or supplier will be notified by the Tenant of the Tenant’s obligations under this contract and the Nondiscrimination Acts and Authorities.
4. Information and Reports. The Tenant will provide all information and reports required by the Nondiscrimination Acts and Authorities and will permit access to its books, records, accounts, other sources of information, and its facilities as may be determined by MAC or the Federal Aviation Administration (FAA) to be pertinent to ascertain compliance with such Nondiscrimination Acts and Authorities and instructions. Where any information required of a Tenant is in the exclusive possession of another who fails or refuses to furnish this information, the Tenant will so certify to MAC or the Federal Aviation Administration, as appropriate, and shall set forth what efforts it has made to obtain the information.
5. Sanctions for Noncompliance. In the event of the Tenant’s noncompliance with non-discrimination provisions of this contract, MAC shall impose such contract sanctions as it or the Federal Aviation Administration may determine to be appropriate, including, but not limited to;
   1. Withholding payments to the Tenant under the contract until the Tenant complies; and/or
   2. Cancelling, terminating, or suspending a contract, in whole or in part.
6. Incorporation of Provisions. The Tenant will include the provisions of paragraphs one through six in every subcontract, including procurements of materials and leases of equipment, unless exempt by the Nondiscrimination Acts and Authorities. The Tenant will take action with respect to any subcontract or procurement as MAC or the Federal Aviation Administration may direct as a means of enforcing such provisions including sanctions for noncompliance. Provided, that if the Tenant becomes involved in, or is threatened with litigation by a sub-contractor, or supplier because of such direction, the Tenant may request the MAC to enter into any litigation to protect the interests of the MAC. In addition, the Tenant may request the United States to enter into such litigation to protect the interests of the United States.

21.12. Title VI List of Pertinent Nondiscrimination Acts and Authorities

During the performance of this contract, the Tenant, for itself, its assignees, and successors in interest (hereinafter referred to as the “Tenant”) agrees to comply with the following non-discrimination statutes and authorities; including but not limited to:

• Title VI of the Civil Rights Act of 1964 (42 USC § 2000d et seq., 78 stat. 252) (prohibits discrimination on the basis of race, color, national origin);
• 49 CFR part 21 (Non-discrimination in Federally-assisted programs of the Department of Transportation—Effectuation of Title VI of the Civil Rights Act of 1964);
• The Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, (42 USC § 4601) (prohibits unfair treatment of persons displaced or whose property has been acquired because of Federal or Federal-aid programs and projects);
• Section 504 of the Rehabilitation Act of 1973 (29 USC § 794 et seq.), as amended (prohibits discrimination on the basis of disability); and 49 CFR part 27;
• The Age Discrimination Act of 1975, as amended (42 USC § 6101 et seq.) (prohibits discrimination on the basis of age);
• Airport and Airway Improvement Act of 1982 (49 USC § 471, Section 47123), as amended (prohibits discrimination based on race, creed, color, national origin, or sex); Civil Rights Restoration Act of 1987 (PL 100-209) (broadened the scope, coverage and applicability of Title VI of the Civil Rights Act of 1964, the Age Discrimination Act of 1975 and Section 504 of the Rehabilitation Act of 1973, by expanding the definition of the terms “programs or activities” to include all of the programs or activities of the Federal-aid recipients, sub-recipients and Operators, whether such programs or activities are Federally funded or not);
• Titles II and III of the Americans with Disabilities Act of 1990, which prohibit discrimination on the basis of disability in the operation of public entities, public and private transportation systems, places of public accommodation, and certain testing entities (42 USC §§ 12131 – 12189) as implemented by U.S. Department of Transportation regulations at 49 CFR parts 37 and 38;
• The Federal Aviation Administration’s Nondiscrimination statute (49 USC § 47123) (prohibits discrimination on the basis of race, color, national origin, and sex);
• Executive Order 12898, Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations, which ensures nondiscrimination against minority populations by discouraging programs, policies, and activities with disproportionately high and adverse human health or environmental effects on minority and low-income populations;
• Executive Order 13166, Improving Access to Services for Persons with Limited English Proficiency, and resulting agency guidance, national origin discrimination includes discrimination because of limited English proficiency (LEP). To ensure compliance with Title VI, you must take reasonable steps to ensure that LEP persons have meaningful access to your programs (70 Fed. Reg. at 74087 to 74100);
• Title IX of the Education Amendments of 1972, as amended, which prohibits you from discriminating because of sex in education programs or activities (20 USC 1681 et seq).

21.13. Disadvantaged Business Enterprises

Tenant acknowledges and agrees that it may be required to practice nondiscrimination in its activities and provide disadvantaged business enterprises participation in any subleases, as required by MAC in order to meet MAC’s goals, or required by the FAA in order to obtain an exemption from the prohibition against long-term exclusive leases.

VI. AIRPORT GA LEASE CHECKLISTS FOR AIRPORTS AND AIRPORT LESSEES

The following checklist contains issues that airport Lessors and Lessees and their counsel may wish to consider when negotiating and drafting GA lease documents. The checklist provides a practical tool for counsel representing airports to use in the critical review of draft airport lease documents and in considering and anticipating the issues that Lessees and their counsel may be thinking about or raising during lease negotiations. Similarly, the checklist will be of use to Lessees and their counsel in understanding the issues that are of interest and concern to airports, as well as issues that are required to meet an airport’s federal obligations. Finally, the checklist also provides for users to create their own customized checklists to assist in preparation for lease negotiations and the development and drafting of GA lease documents.

Keep in mind that the checklist is limited to the scope of issues discussed in this digest and, as a result, is neither exhaustive nor complete. Also note that the materials contained in the list is not intended as a recommendation of specific positions for either Lessors or Lessees to take during negotiations or in drafting GA leases. Instead, the checklist is intended only to inform, create awareness, and to support further consideration and discussion of the issues raised in this digest.

1. Checklist of GA Lease Development Issues
   1. Preliminary Considerations
      1. Is the proposed use consistent with the Airport Master Plan, the Airport Layout Plan and airport development plan?
      2. Is the proposed use consistent with other GA leases and the Airport Policy Documents (minimum standards, leasing policies, airport rules and regulations)?
   2. Regulatory Requirements: Is the proposed development for the premises consistent with FAA Grant Assurances?
      1. Grant Assurance 5 (Preserving Rights and Powers)
      2. Grant Assurances 6 (Consistency with Local Plans), 7 (Consideration of Local Interests), and 8 (Consultation with Users)
      3. Grant Assurance 19 (Operation and Maintenance)
      4. Grant Assurance 22 (Economic Nondiscrimination)
      5. Grant Assurance 23 (Exclusive Rights)
      6. Grant Assurance 24 (Self-sustainability)
      7. Grant Assurance 25 (Airport Revenue)
      8. Grant Assurance 29 (Airport Layout Plan)
      9. Grant Assurance 38 (Hangar Construction)
   3. Rental Rate: If the rental rate is lower than FRV, does the proposed use fall within a recognized FAA exception to the fair and reasonable requirement contained in Grant Assurance 24,³⁶⁰ such as:
      1. A Community Organization?
      2. A Flying Club?
   4. The Lease Document: Are all of the signature copies of the lease document identical, accurate, complete, and consistent with the terms of the business deal?
      1. Are the parties properly identified?
      2. Is a diagram of the premises attached as an exhibit?
      3. Are the premises correctly and clearly identified?
      4. Has a survey of the premises been conducted and attached to the lease documents?
      5. Are all mandatory clauses contained in the lease?
      6. Compliance with FAR Part 77 height restrictions?
   5. Rent and Rent Increases
      1. Is the rental rate rationally and reasonably related to the size, function, location, and level of improvements of the premises?
      2. Does the lease use the appropriate version of the CPI? [The Consumer Price Index for all Urban Areas (CPI-U) is generally regarded as historically increasing at a faster rate than other CPI indices.]
      3. If the lease does not use a CPI index, is the alternative escalation provision reasonable, acceptable, and stated clearly?
      4. Has consideration been given to including periodic reappraisals of the premises as the basis for rent increases?
   6. Security Deposit: Does the lease require a security deposit? If so, in what amount and form?
      1. Does the lease allow the Lessor an unrestricted right to apply the security deposit to all monetary and non-monetary defaults and breaches, including termination obligations?
      2. Does the lease provide the Lessor with an unrestricted lien on the Lessee’s personalty for all monetary and non-monetary defaults and breaches, including termination obligations?
      3. Does the lease contain the Lessee’s waiver of any claims against the Lessor for wrongful or mistaken withdrawals from the security deposit?
      4. If a security deposit in the form of an LOC is required, does it state that the Lessor may draw on the LOC if the Lessee files a petition in bankruptcy, even if the Lessee is current on all of its monetary obligations under the lease?³⁶¹
      5. If the security deposit provision contains a “burn down” clause allowing the deposit to decrease over time, should the full amount of the deposit be reinstated toward the end of the lease in order to ensure that the end of term requirements are met?
   7. Term and Renewal Options: If the Lessee is making a capital investment at the premises:
      1. Is the full term (the term and any extensions) consistent with similar airport leases and airport policy (especially if the airport has a lease term/capital investment schedule in its Airport Policy Documents)?
      2. Is the term long enough to allow full amortization of the Lessee’s investment?
      3. Has the Lessee’s designated lender approved of the term and the default provisions of the lease?
      4. Is the term of the lease plus any extensions 50 years or more?
      5. If so, has the airport consulted the FAA ADO regarding its review of the lease term?

1. 7. 6. Has the airport retained the right to approve or deny the lease extensions and any subleases or assignments?
      7. Options to Renew: Does the lease contain the right to extend or review the lease term?
      8. Are the renewal terms and periods stated accurately and clearly?
      9. Does the lease state who has the right to exercise the option to extend or renew?
      10. Is the deadline for the right to review or extend stated clearly?
      11. Does the lease state clearly the obligations of the party exercising the option to renew or extend?
   8. Termination and Reversion Clause: Does the lease contain a reversion clause that allows the airport to accept or reject ownership of all of the Lessee’s improvements at the termination of the lease?
      1. Does the lease contain a separate signature line or initials box for the Lessee to acknowledge the presence of the reversion provision?
      2. Does the reversion clause apply to any termination (viz, Lessee’s default, violations of Airport Policy Documents) of the lease, rather than simply the expiration of the term?
      3. Does the lease automatically require the Lessee to pay a fee, as additional rent, if the Lessee does not remove its personalty from the premises by a specific date and establish a date when ownership of the personalty will revert to the Lessor?
      4. If the airport requires the Lessee to remove any improvements at the end of the term, does the lease contain a requirement that the improvements must be removed by a specific date? If so, does the lease characterize any tardiness in removing the improvements and restoring the premises to their previous condition as placing the Lessee in holdover status subject to the rental rates applicable to that status until the removal and restoration have been completed? Does the same provision prevent the Lessee from obtaining any continuing right to occupy the premises during the removal and restoration work?
      5. Does the lease require that the Lessee’s obligations and liabilities under the lease continue after the expiration or termination of the lease (particularly for environmental issues)?
      6. Is it appropriate to require the Lessee to waive any procedural law or rule that would allow the entry of a judicial stay regarding holdover status, termination resulting from a default, or eviction?
   9. Improvements: Does the lease require the Lessee to make improvements to the premises?
      1. Is there a requirement for the Lessor’s approval of all plans for improvements?
      2. Does the lease limit the Lessee’s right to modify approved plans and require additional airport approvals?
      3. Records:
         1. Should the Lessee be required to maintain records of its construction expenses for a specific period of time?
         2. Is the Lessee required to deliver “as built” drawings of any construction or alteration of the premises in a specific format?
      4. Is the Lessee required to provide a warranty of its construction or, at least, to pass along to the airport any warranties that the Lessee receives from suppliers and contractors?
      5. Is there a requirement that the Lessee’s improvements must meet airport or other local design standards and regulations?
      6. Does the lease contain a schedule or timeline for the Lessee’s improvements that includes a completion date?
      7. Is the Lessee required to post a security deposit in the form of an LOC or a bond for completion of the improvements?
      8. Should the lease require the Lessee to fence off the construction site or to lease and secure a staging area?
      9. If the Lessee intends to use a crane, should the lease make specific reference to height restrictions in the area of the construction?
   10. Maintenance of Premises: Does the Lessee have specific maintenance responsibilities for the premises and any improvements?
       1. Does the lease authorize periodic inspections and audits of the condition of the premises by airport staff or an engineer or inspector approved by the airport?
       2. Does the lease establish minimum standards for the Lessee’s maintenance and repair responsibilities?
       3. Does the lease require the Lessee’s compliance with all local, state, and federal codes, statutes, ordinances, rules, regulations, and grant assurances?
   11. Reasonableness
       1. If the lease provides that the Lessor must act reasonably when providing its consent, exercising its discretion, or making a decision under the lease, does the clause condition that obligation on the absence of the Lessee’s breach or default?
       2. Does the lease provision referring to the Lessor’s consent contain a limitation on the Lessee’s remedies for the Lessor’s wrongfully withholding consent by prohibiting the Lessee from collecting monetary damages (especially consequential

1. 11. 2. damages) and restricting its remedies to injunctive relief and specific performance?
       3. If there is an arbitration clause in the lease, does it apply to claims of the wrongful withholding of consent? If so, the lease should also provide a list of the arbitrators that the Lessor may appoint.
   12. Liability
       1. Does the jurisdiction in which the premises are located allow the Lessor to require the Lessee to waive claims for damages against the Lessor?
       2. If so, does the clause state the Lessee’s waiver in explicit language in an obvious location in the lease?
       3. Has the Lessee’s attention been drawn to the waiver provision prior to signing the lease? Does the provision require the Lessee’s acknowledgment by signature or initialing the document?
   13. Indemnification: Is the airport’s standard indemnification clause in place?
       1. Does this lease present any special circumstances that would require an expansion of the standard indemnity provision?
       2. If there is an exculpation clause, is the clause consistent with the requirements of the jurisdiction in which the premises are located?
       3. Is the Lessor willing to make the indemnification clause mutual?
       4. Is the mutual indemnification limited to the extent of the indemnifying party’s fault?
   14. Insurance
       1. Has the airport discussed the insurance provisions with its Risk Manager? Does the Risk Manager understand the lease’s use provision and any related improvements and any required capital investments?
       2. Is there anything about this lease that requires modification of the airport’s standard insurance requirements?
       3. Does the lease give the airport the right to set criteria for and approve the Lessee’s insurance carrier?
       4. Does the lease require the Lessor to be named as an “additional insured” rather than a “named insured” on the Lessee’s insurance policies?
       5. Does the lease require the Lessee to provide copies of insurance documents and proof of insurance at lease signing, rather than simply a certificate of insurance?³⁶²
   15. Force Majeure: Does the lease contain a force majeure clause that does not affect the Lessee’s obligation to pay rent, the obligation to pay insurance premiums, or to pay any other monetary obligations?
       1. Does the force majeure clause include the Lessor’s failure or inability to obtain the consents or permits of government agencies and other acts of governmental units, including times of war, terrorism, and insurrection?
       2. Does the force majeure clause require the Lessee to notify the Lessor of a force majeure event within a specific amount of time or to be prohibited from taking advantage of the clause?
   16. Waiver of Subrogation: Has the airport discussed with its Risk Manager whether a waiver of subrogation by one or both parties is consistent with the insurance provisions in the lease that transfer the risk of loss to insurance carriers?
   17. Airport Security Matters: Does the lease reference the airport rules and regulations and federal requirements pertaining to security matters?
       1. Does the lease require the Lessee to comply with all future changes to airport security requirements?
   18. Sublease/Assignment: Does the lease prohibit subleasing and assignment without the Lessor’s prior written consent?
       1. If the Lessee insists that Lessor’s consent to any provision of the lease shall not be unreasonably withheld, unduly delayed, or conditioned in any way, does the provision state the condition that it is not available if the Lessee is in breach or default?
       2. If the Lessee requests assignment to “affiliates” without the Lessor’s consent, does the lease restrict such assignments to only previously identified affiliates, require the Lessee to provide a list of designated affiliates, and to update the list at specific intervals during the term of the lease?
       3. Does the lease prohibit lease assignments made by operation of law without the Lessor’s consent and create an automatic default that cannot be cured?
       4. Does the lease state that assignments made without the Lessor’s consent are void and without legal effect?
       5. Does the lease prohibit assignments and subleases to parties who have been involved in litigation with the airport, breached leases with the airport, or been a party to litigation or breached a lease with another airport or an agency of the federal or state government?
       6. Does the lease require the Lessee to remain liable for lease obligations even after an assignment or sublease?

1. 18. 7. Does the lease state that the Lessor is entitled to recover any rent or other concessions made to the Lessee by an assignee or sublessee during the term of the lease?
       8. Does the lease require the Lessee to deliver unredacted copies of any sublease or assignment prior to the consent to or execution of a sublease or assignment by the Lessor?
       9. Does the lease contain a limitation of the Lessee’s remedy to only injunctive relief if the Lessor unreasonably withholds consent to the Lessee’s request for a sublease, assignment, or any other request that is found to be a breach of the lease?
   19. Right of Access: Does the lease provide the airport with a continuing right of access to the premises?
       1. Is the Lessor allowed access to the premises without notice during an emergency or to make repairs on behalf of the Lessee?
       2. Does the lease contain exculpation and indemnity clauses for entry on the premises and limit any recovery of damages against the Lessor?
   20. Services: If the Lessor controls the delivery of services to the premises, have the parties decided how payment for the services will be handled?
   21. Option to Terminate: Has either party retained a right to terminate the lease?
       1. Does the lease contain the appropriate statement of conditions for an early termination by the:
          1. Lessor?
             1. Aeronautical necessity?
             2. Default?
             3. Casualty or condemnation?
          2. Lessee?
             1. Late occupancy?
             2. Casualty or condemnation?
   22. Quiet Enjoyment: Does the lease condition the Lessee’s right to quiet enjoyment on not being in default or, at least, not having a default beyond any applicable cure period?
   23. Capital Investment: Is a performance bond necessary/required? If so, in what amount?
   24. Civil Rights and Nondiscrimination: Does the lease reference the required federal, state, and local civil rights and nondiscrimination provisions, statutes, rules, and regulations?
   25. Default: Does the lease contain the airport’s standard notice and cure provision if the Lessee should commit an act of default?
       1. Does the lease prohibit “open ended cure periods” and require the parties to agree, in writing, on a specific date by which the Lessee must cure a default even if the Lessee is working toward a cure?
       2. Does the lease provide that the Lessee may obtain an “open ended” cure period only if it posts a bond or an LOC in an amount equal to the Lessor’s estimate of the cost required to cure the default?
       3. What is the limitation on the Lessee’s monetary default? Nonmonetary default?
       4. Is there a statement of the limit on the number of default notices that a Lessee may receive within a specific time period? Month? Year?
   26. Remedies: Does the lease state the Lessor’s remedies for the Lessee’s defaults?
       1. Does the lease require arbitration of some disputes? If so, does the lease list all of the covered arbitrable disputes and set standards for their resolution?
       2. Does the lease identify the list of arbitrators acceptable to the Lessor and Lessee?
       3. Does the lease contain a waiver by the Lessee of a right to a trial by jury for any claim brought against the Lessor arising out of the lease, the premises, the Lessor’s ownership of the premises, or the Lessor/Lessee relationship?
   27. Compliance with Laws: Does the lease contain a provision requiring the Lessee to comply with all applicable rules, regulations, ordinances, statutes, and laws?
       1. Is there a provision regarding the Lessee’s compliance with all future rules and regulations?
       2. Is there a provision that states that the lease is subordinate to the airport’s federal, state, and local obligations (particularly those with regard to funding and grants)?
   28. Sublease/Assignment: Does the lease require the Lessor’s consent for any sublease or assignment of the premises?
       1. Does the lease contain an exception for the Lessee’s affiliates or parent company?
       2. Is there an early termination provision tied to any subleases or assignments offered by the Lessee without the Lessor’s consent?
       3. Does the sublease clause contain a provision for the payment of a fee to the Lessor if the premises are subleased or assigned? Is such a fee related to the Lessor’s actual costs for such transactions?
       4. Does the lease contain a limitation on a Lessee’s remedy to injunctive relief if Lessor unreasonably withholds consent to a sublease or assignment in breach of the lease?
       5. Does the lease prohibit the Lessee from exercising a renewal option if it has assigned or subleased?
   29. Reversion