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6/24/75 AC 150/5300-4B costs of the public landing area is sought through an indirect form of revenue based on a sliding scale formula which will yield a return that varies in approximate proportion to the amount of use derived from the public landing area. A good example of this type of revenue would be a fuel flowage charge on all gasoline delivered at the airport or a payment expressed as a percentage of the gross volume of business done by tenant firms which provide supporting services. The level of such a flowage charge or the amount of the percentage is a matter for negotiation. Since such a revenue is intended to recover a user charge for public facilities, it is in addition to any rental payment that might be negotiated for the use of specific premises to be exclusively occupied at the airport for the conduct of a proprietary business. 70. AIRPORT LEASES. a. The arrangements between a public agency/airport owner and those private agencies seeking to offer commodities and services at the airport are usually expressed in a contract. Since most of these contracts involve the right to occupy and use designated premises, they will generally be in the form of a lease. As in any such agreement the rental payments, terms of occupancy, privileges granted, obligations assumed, and other considerations are a matter of bargaining and negotiation between the parties. There are, however, some general principles peculiar to the airport environment which should be given careful consideration. b. If the prospective tenant contemplates a substantial capital invest- ment in hangars, fuel storage equipment, machinery, and store fixtures, etc., he will seek a relatively long term lease in order to be able to amortize his investment. It is to the advantage of the airport owner to encourage such private development and to offer sufficient tenure to induce it. On the other hand, aviation is dynamic and most airports evolve and expand much faster than anticipated. Chapter 5 outlined certain planning considerations for acquiring airport land. If within the first few years following the acquisition or construction of an airport the needs of commercial tenants require the occupancy of all available building areas, the planning for land use must be considered deficient. Therefore, in leasing airport property to commercial tenants,it would be well to avoid leasing more area than is reasonably required. Similarly the granting of options (to lease land not yet needed) may well turn out to be the most regretted concession made during the initial negotiations. c. A commercial tenant when contemplating a substantial investment at an airport will naturally seek some form of protection from compe- tition. The airport owner in fact may be under considerable pressure during the negotiations to lease airport premises under Chap 13 Par 69 Page 81