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July 15, 2015

Burbank-Glendale-Pasadena Airport Authority Proposal

2627 Hollywood Way Burbank, California 91505 (818) 840-8840 www.bobhopeairport.com

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JULY 15, 2015

A SUMMARY OF THE AUTHORITYS PROPOSAL

1. The Authority will receive a vested right to build a Replacement Terminal on any Airport zoned property other than the B-6 Trust Property (Opportunity Site). The basic characteristics of the Replacement Terminal are set forth in Exhibit A (Replacement Terminal Characteristics).

2. The City of Burbank and its residents will receive protections as set forth in Exhibit B (Burbank Protections). The Burbank Protections will be guaranteed by a JPA amendment executed by the Cities of Burbank, Glendale, and Pasadena.

3. The Authority will receive protections as set forth in Exhibit C (Authority Protections). As applicable, the Authority Protections will be guaranteed by the following: (i) a JPA amendment executed by the Cities of Burbank, Glendale and Pasadena; (ii) a new Development Agreement executed by the City of Burbank and the Authority; (iii) Burbank Municipal Code amendments; and, (iv) removal of B-6 Adjacent Property easement and modification of the Citys PUC Plan restrictions to allow development on the B-6 Adjacent Property.

4. The Burbank Protections and the Authority Protections will start at the same time (following approval by the voters and the conclusion of any legal challenges against the election results) and will be effective no matter where or when the Replacement Terminal is built.

5. The Authority will continue to support legislation that authorizes imposition of the mandatory curfew on all aircraft that the Authority sought in its Part 161 application as set forth in Exhibit D (Curfew). Implementing a mandatory curfew will not be a prerequisite for the Replacement Terminal.

!EXHIBIT A

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EXHIBIT A Replacement Terminal Characteristics

The Replacement Terminal may be located on the B-6 Adjacent Property or on any other Airport zoned property except the B-6 Trust Property. No matter the location where it is built, the Replacement Terminal shall have the following basic characteristics:

1. Total number of aircraft parking gates will not exceed the current number of 14.

2. Size of replacement terminal building shall be no less than 232,000 square feet nor greater than 355,000 square feet.

3. Total public parking spaces (excludes employee parking spaces) shall not exceed 6,637.

4. Upon the opening of the Replacement Terminal, the current passenger terminal will be closed and demolished.

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EXHIBIT B Protections for Burbank

The Cities of Burbank, Glendale, and Pasadena will execute a JPA amendment so that, without a supermajority vote of the Commission, the Authority shall not do any of the following:

1. The Authority shall not increase the number of commercial airline passenger gates above 14 nor create nor construct any remote parking positions for air carrier aircraft.

2. The Authority shall not approve any expansion of the existing terminal, any new terminal (except the Replacement Terminal), any expansion of the Replacement Terminal (beyond the parameters set forth in Exhibit A), nor any relocation of airline passenger related airport functions from the Replacement Terminal.

3. The Authority shall not amend the Authoritys noise rules nor the manner in which they have been enforced since the adoption and implementation of ANCA except to implement the mandatory curfew sought in the Authoritys Part 161 application (text of which is set forth in Exhibit D).

4. The Authority shall not amend the Authoritys voluntary curfew nor the manner in which it has been applied since the adoption and implementation of ANCA except to implement the mandatory curfew sought in the Authoritys Part 161 application (text of which is set forth in Exhibit D).

5. The Authority shall not abandon its support for congressional authorization for the imposition of the mandatory curfew sought in the Authoritys Part 161 application (text of which is set forth in Exhibit D).

6. The Authority shall not acquire real property other than avigation easements.

7. The Authority shall not approve an airport management contract or lease with a maximum term in excess of 35 years.

Attached as Exhibit E to this material is a concise explanation of the federal law issues which constrain the Authoritys ability to offer additional protections to the City of Burbank.

!EXHIBIT C

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EXHIBIT C Protections for the Airport Authority

The City of Burbank will provide the Authority with the following protections:

1. All discretionary and ministerial City of Burbank approvals required for the Replacement Terminal including debt authorization and (if applicable) PUC approval and removal of easement restrictions.

2. A vested right to the development of a Replacement Terminal on any Airport zoned property other than the B-6 Trust Property.

3. Delegation to City of Glendale or City of Pasadena of the City of Burbanks building official powers for the Replacement Terminal. This delegation will cover the City of Burbanks ministerial authority to apply and enforce the State Building Standards Code with respect to the Replacement Terminal.

!EXHIBIT D D-1

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EXHIBIT D Part 161 Curfew Language

1. Except as provided in Paragraphs (2) and (3), between the hours of 10:00 p.m. and 6:59 a.m.:

a. No landings at Bob Hope Airport shall be permitted.

b. No takeoffs from Bob Hope Airport shall be permitted.

2. The following aircraft shall be permitted to land at or takeoff from Bob Hope Airport between the hours of 10:00 p.m. and 6:59 a.m.:

a. Law enforcement aircraft, firefighting aircraft, disaster relief aircraft and military aircraft.

b. Medical flight aircraft engaged in active emergency operations for the transportation of patients or human organs.

3. Aircraft other than those specified in Paragraph (2) shall be permitted to land at or takeoff from Bob Hope Aircraft between the hours of 10:00 p.m. and 6:59 a.m. only under the following circumstances:

a. In the event such landing or takeoff results from the existence of a declared emergency.

b. In the event such landing or takeoff results from the use of Bob Hope Airport as weather alternate.

c. In the event such landing or takeoff results from a weather, mechanical, or air traffic control delay; provided, however, this exception shall not authorize any landing or takeoff between the hours of 11:00 p.m. and 6:59 a.m.

4. Upon request of the Authority, the aircraft operator shall document or demonstrate: (i) the precise emergency condition(s) resulting in a landing or takeoff between the hours of 10:00 p.m. and 6:59 a.m.; or (ii) the precise

!EXHIBIT D D-2

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weather, mechanical, or air traffic control condition(s) resulting in a landing or takeoff between the hours of 10:00 p.m. and 11:00 p.m.

5. Any aircraft operator violating the provisions of this Rule shall, in addition to any other available remedies (including injunctive remedies), be subject to civil penalties for each unauthorized landing and unauthorized takeoff as follows:

a. For the first violation within a 12-month period Three Thousand Six Hundred Seventy-One Dollars ($3,671)

b. For second violation within a 12-month period Seven Thousand Three Hundred Forty-Two Dollars ($7,342)

c. For the third violation within a 12-month period Eleven Thousand Thirteen Dollars ($11,013)

d. For the fourth violation within a 12-month period Fourteen Thousand Six Hundred Eighty-Four Dollars ($14,684) and action to ban the aircraft operators access or terminate lease at Bob Hope Airport for a twelve (12) month period.

!EXHIBIT E E-1

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EXHIBIT E Concise Explanation of Federal Law Issues

1. Staying In Current Terminal Is Not An Option For Authority.

a. Current terminal does not meet FAA design standards because the terminal is too close to the runway. FAA Advisory Circular (AC) 150/5300-13; 14 C.F.R. 139.309.

b. Authority is required to improve the airport runway safety area to comply with FAA standards to the extent practicable. FAA Order 5200.8; Public Law 109-115 (2006).

2. Federal Law Constrains What Powers The Authority Can Offer The City.

a. Neither the Authority nor the Cities of Glendale and Pasadena can offer access restrictions to the City, including implementation of a curfew, in return for a new terminal. See Airport Noise & Capacity Act (1990); Airline & Airway Improvement Act (1982); Airline Deregulation Act (1978); Noise Control Act (1972).

b. Indeed, U.S. Supreme Court blocked earlier efforts to impose a curfew at the Airport. City of Burbank v. Lockheed Air Terminal, 411 U.S. 624 (1973).

3. Violating Federal Law Also Endangers Federal Funding for Authority

a. Federal grant assurances 22, 23, 29 and 39 require that the Authority operate its facilities in a nondiscriminatory manner and with competitive access (i.e., Airport must stay open and equally available to aircraft operators). In particular, Authority cant deny access or restrict operations in way that limits efficiency and utility absent FAA approval. FAA order 5190.6B, Appendix A. Likewise, grant assurance 21 requires the Authority to protect Airport zoned and Airport owned property from improper takings and/or incompatible actions by third parties.

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b. Violation of grant assurances or underlying federal laws could cause FAA to find Authority in breach and ineligible for federal funding for replacement terminal and other routine projects. 49 U.S.C. 47107; see also 49 U.S.C. 47106.

4. The Authority Cant Agree to 5 of the Citys Requested Powers

a. B-6 Property Easement. The B-6 property is subject to a City easement that restricts permissible uses and prohibits development of a terminal. The FAA will not provide funding for a replacement terminal on that site until this easement is modified to allow a terminal on the site.

b. Noise Rules. The City wants the Authority to agree not to change the Airports existing noise rules in the future. The Authority shall not amend the Authoritys noise rules nor the manner in which they have been enforced since the adoption and implementation of ANCA. The Authority supports obtaining a mandatory curfew. The Authority sought one through the federal Part 161 process. The FAA denied that application. The Authority will support legislation to change federal law so that implementing a mandatory curfew at the Airport does not violate federal law. However, the Authority cannot commit itself to the Citys effort to defund FAA enforcement of existing federal law. Such an effort does not change the federal law that requires FAA approval of mandatory curfews, would risk making the Authority ineligible for funding to replace the terminal, and renders the Authority potentially liable for damages to impacted aircraft operators.

c. Tenants and Airlines. The City wants the veto powers (consensus voting) to not only bind the Authoritys successors and assignees (i.e., if the Airport is sold or leased to another entity) but also Airport tenants and airlines. The Authority will bind its successors and assignees but does not have the legal right to bind third parties such as airlines that have their own rights under federal law.

d. Adverse FAA Decisions Re Individual Powers. The Authority believes that the veto powers (consensus voting) the City would receive under the Authoritys proposal are consistent with federal law and grant assurances. If those powers are challenged by the FAA or others, the Authority will commit to fight those challenges in court. Until such litigation is finished, however, the Authority must comply with FAA direction to avoid losing federal funding during the litigation.

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5. In Particular, The Authority Can Grant The City Veto Powers (Consensus Voting) Over The Following Actions:

a. Construction of a bigger terminal or an additional terminal once the replacement terminal is approved.

b. Construction of more than 14 aircraft parking spaces or 6,637 automobile parking spaces for the Airport.

c. Acquisition of any more land or entering into any long-term leases with a term in excess of 35 years.

d. Modifying the Authoritys continuing support of federal legislation authorizing the implementation of a mandatory curfew at the Airport, or amending the Authoritys noise rules or the manner in which they have been enforced since the adoption and implementation of ANCA.

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EXHIBIT F

Economic Benefits

The Replacement Terminal Investment:

Injects $300M--$400M for terminal construction into the Burbank and regional economies

Funded by the FAA, airlines, and airport users, NOT Burbank taxpayers

Creates a substantial number of terminal related jobs in construction, transportation, and services

!EXHIBIT G G"1!

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EXHIBIT G

355,000 SF TERMINAL on B-6

See Attached

BOEING MODEL 737-900W

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BOEING MODEL 737-900W

BOEING MODEL 737-900W

BOEING MODEL 737-900W

BOEING MODEL 737-900W

BOEING MODEL 737-900W

BOEING MODEL 737-900W

BOEING MODEL 737-900W

BOEING MODEL 737-900W

BOEING MODEL 737-900W

BOEING MODEL 737-900W

BOEING MODEL 737-900W

BOEING MODEL 737-900W

14-GATE TERMINALNOT TO EXCEED 355,000 SQUARE FEET ON ADJACENT PROPERTY

Air Cargo

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ReplacementFire Station

CentralPlant

DemolishExisting Terminal

Demolish ExistingParking Structure

Canopy/ViewCorridor Area

Valet Drop-off and Pick-upat Grade Under Canopy

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EXHIBIT H

355,000 SF TERMINAL on SOUTHWEST QUADRANT

See Attached $

246399

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14-GATE TERMINALNOT TO EXCEED 355,000 SQUARE FEET ON SOUTH WEST QUADRANT

ReplacementFire Station

DemolishExisting Terminal

Demolish ExistingParking Structure

H-2