CHAPTER XIV - Ground Rents and Rental of Hangars

Abstract

Hangars and other buildings used by fixed-base operators at publicly owned airports are commonly of two types: (1) structures erected by the operators on ground rented from the municipal owners and (2) structures owned by the airport owner and leased to the operators as tenants. When the cost of construction of a hangar or of a building to be used for office or other purposes is borne by the municipality, calculation of proper rental payments is ordinarily a fairly simple and straightforward matter. Costs would normally include: (1) ground rent, usually interest on land investment; (2) normal depreciation on the structures, (3) cost of maintaining the building or grounds or both to the extent agreed upon, (4) the ordinary taxes on commercial buildings, and finally (5) a fair return on the public funds invested in the building. In some few cases, an additional amount of scarcity value rent might be included. In the case of military hangars, a special method is suggested to arrive at an amount of rental, which can be deemed mutually fair to the cities that have inherited them and to the fixed-base operators who uses them. This method would start with an estimate of the square footage actually needed and to be used for storage of airplanes and for repair service.