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September 29, 2011

More Rigorous Oversight is Needed to Ensure Venice Municipal Airport Land Sales and Leases are Used Appropriately

Project ID: 
AV2011180
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On September 29, 2011, we issued a report on the Federal Aviation Administration's (FAA) oversight of the land sales and leases of Venice Municipal Airport.  We conducted our review at the request of former Senator George LeMieux, who identified issues warranting a more detailed review of how the City of Venice, the airport sponsor, uses airport revenue.  We found that FAA has not ensured that the City of Venice used airport revenue for appropriate purposes or that the airport is as self-sustaining as possible.  For example, Agency policy requires that all airport property be sold at fair market value; however, FAA permitted the City (as both the airport sponsor and the provider of municipal functions) to transfer airport properties to itself at prices well below assessed values.  FAA’s oversight also did not prevent the City from misallocating lease revenue and parking lot improvement costs.  We made five recommendations to improve FAA’s oversight of airport property sales and the Venice airport’s self-sustainability.  FAA concurred with four and partially-concurred with one recommendation.  We asked FAA to reconsider its position for three of the recommendations. 

Recommendations

Open

Closed

Closed on 10.06.2016
No. 1 to FAA

Strengthen Agency policy to ensure that transfers of airport property acquired through Federal assistance are based on independent certified appraisals performed within 6 to 12 months of the transfer and reviewed by an independent real estate professional, especially when the parcel is unusual or the transfer is between an airport and its sponsor.

Closed on 12.15.2015
$493,070
No. 2 to FAA

Require the City to complete the independent review appraisal of the property used by the Sharky's restaurant if sold, and any subsequent transfers of airport property.

Closed on 01.14.2015
$493,070
No. 3 to FAA

Assess the revenue diversions or self-sustainability issues involving the distribution of Sharky's lease revenue and parking lot renovation costs and seek full recovery, plus interest on the $493,070 in questioned costs identified by our office (see exhibit B) and any other improperly allocated revenue identified by FAA.

Closed on 01.23.2015
$426,329
No. 4 to FAA

Work with the City of Venice to develop an appropriate allocation of future rent revenue from Sharky's over the remaining term of the lease and the cost of subsequent capital improvements such as parking lot renovations, that protects the self-sustainability of the airport.

Closed on 03.30.2016
No. 5 to FAA

Assess the adequacy of the Agency's policies and procedures for overseeing the transfer or lease of large or unusual airport properties to ensure that sponsor agreements are fair and equitable and protect the airport's self-sustainability.