Leasing Authority for Airport Property Leased to Private Parties

Subject:

Requested By: Robert W. Pope County Attorney New Hanover County

Questions: (1)

Is county airport property, set apart for aeronautic purposes, treated differently from other county property for purposes of sale or lease?

(2)

Which statute controls the county leasing of airport property to private parties for airport purposes: G.S. 63-53 or G.S. 160A-272?

(3)

May New Hanover County lease airport space (real property) for a term of fifteen or twenty years without treating the lease as a sale or real property pursuant to G.S. 160A-272?

Conclusion: (1)

Yes. When the lease is for airport purposes and services.

(2)

G.S. 63-53(3) and (5).

(3)

Within certain limitations, yes.

Chapter 63, Article 6, N.C.G.S., authorizes the establishment and operation of public airport by municipalities. G.S. 63-57 provides that the powers granted to municipalities are also granted to counties and that the purposes of the Article are county purposes. G.S. 135A-274(4) provides that a county may operate an airport as a "public enterprise." New Hanover County, pursuant to this authority, operates a public airport within its boundaries. The County desires to enhance the operation of the airport by attracting fixed base operators through long-term leases of facilities on the airport premises.

Chapter 153A, N.C.G.S., specifies the powers of counties. G.S. 153A-176 provides that counties may dispose of real property in accord with Chapter 160A, Article 12, N.C.G.S. G.S. 160A-272 governs the leasing of property and requires for leases of terms greater than 10 years that such leases be treated as the sale of property, thus imposing advertising and upset bid procedures. However, G.S. 63-53(3) and (5) provide broad leasing authority without specifically imposing the requirements found under G.S. 160A-272.

The county seeks to ascertain whether it must comply with G.S. 160A-272 before letting a long term lease or if it may negotiate and award such a lease without following the procedures required by the statute’s imposition of the sale procedures found in remaining sections of Article 12, Chapter 160A, N.C.G.S.

"When two statutes apparently overlap, it is well established that the statute special and particular shall control over the statute general in nature, even if the general statute is more recent, unless it clearly appears that the legislature intended the general statute to control. Colonial Pipeline Co.

v. Neill, 296 N.C. 503, 251 S.E.2d 457 (1979); National Food Stores v. N.C. Board of Alcoholic Control, 268 N.C. 624, 151 S.E.2d 582 (1966)." Thus spoke Justice Carlton in Seders v. Powell, 298 N.C. 453, 459, 259, S.E.2d 544 (1979). It must be noted that although Chapter 160A was enacted in 1971 and the relevant provisions of Chapter 63 were originally enacted in 1945, the provisions of Article 12, Chapter 160A simply replaced similar provisions in Article 6, Chapter 160, N.C.G.S.

". . . . (We) held that a municipal corporation, owning and operating a public airport . . . is acting in a proprietary capacity . . . In the Miami Beach Airline Service case, supra, the Supreme Court of Florida said, "When given authority to do so a governmental entity is expected to perform a proprietary function under like rules and regulations as those pursued by private individuals." . . ." Justice Lake, speaking in Airport Authority v. Stewart, 278, N.C. 227, 231, 179 S.E.2d 424 (1971).

Thus, it would appear that the specific provisions of G.S. 63-53 would control over the general provisions of Article 12, Chapter 160A, N.C.G.S., insofar as the operation of a public airport by the county is concerned.

G.S. 63-53(3) and (5), which contain the provisions for leasing and rate-making, impose upon the municipality or county the limitation that "provided in each case in so doing the public is not deprived of its rightful, equal, and uniform use thereof." Litigation under G.S. 63-53(5) has established that the rate-making power, including setting rental fees, is a proprietary function and it is not an administrative function subjecting it to judicial review. See Piedmont Aviation, Inc. v. Raleigh-Durham Airport Authority, 288 N.C. 98, 215 S.E. 2d 552 (1975); Raleigh-Durham Airport Authority v. Delta Airlines, 429 F.Supp. 1069 (M.D.N.C. 1976). However, there does not appear to be any appellate litigation on limitations imposed by the guarantees of public use.

Instructive therefore, is the decision in Plant Food Co. v. Charlotte, 214 N.C. 518, 199 S.E. 712 (1938). There, Justice Seawell explained:

"It is true, as a rule, that where governmental discretionary powers are involved a board can make no contract which would bind its successors in office with respect to the exercise of the discretion. Amongst the powers generally conceded to be accompanied by such governmental discretion, and which cannot be suspended or controlled by contract, are . . . the legislative powers . . . the power to lay out and maintain streets . . . preserve civil order; to regulate rates . . . to levy taxes, make assessments, and the like . . .

"Where governmental powers of this kind are not involved or disadvantageously affected the right to make contracts, otherwise unobjectionable to the law, is one of the most important incidents of municipal government. Lambeth v. Thomasville, 179 N.C. 452, 102 S.E. 775. In the

administration of its proprietary affairs the commissioners or councilmen of the town may make reasonable contracts binding upon their successors running through a term of years." (Emphasis added). 214 N.C. 518, 519-520.

See also Cline v. Hickory, 207 N.C. 125, 176 S.E. 250 (1934).

The specific powers conferred under G.S. 63-53(3) and (5) are limited by the provisions protecting the equal use of the public and by North Carolina case law to those "reasonable" contracts "otherwise unobjectionable". Within these limitations, the County of New Hanover can negotiate and execute long term leases of airport property for airport purposes without being subject to the terms of Article 12, Chapter 160A, N.C.G.S. When a disposition of airport property is made for non-airport purposes, then that Article would apply. G.S. 63-53(4).

Rufus L. Edmisten Attorney General

Blackwell M. Brogden, Jr. Assistant Attorney General