Washington Airport’s Hangar Freeze Runs Afoul of FAA

The FAA has determined that a moratorium on new ground leases at Cle Elum Municipal Airport in Washington violates federal grant assurances requiring airports to provide reasonable access to aeronautical users. The decision follows an informal Part 13 complaint filed by airport users after the city indefinitely suspended new leases, citing ongoing bankruptcy proceedings. The FAA has directed the city to submit a corrective action plan.

City Cites Bankruptcy Proceedings

Cle Elum filed for Chapter 9 bankruptcy protection in June 2025 following a $25.9 million arbitration award stemming from a dispute involving a local development agreement. According to the city’s bankruptcy announcement, the filing was intended to protect municipal services while the city addressed its financial obligations. The city’s airport leasing moratorium was set to remain in effect until the bankruptcy proceedings concluded and officials determined whether to continue operating the airport.

“Our priority continues to be protecting Cle Elum’s residents, essential services, and our financial future,” Mayor Matthew Lundh said in the city’s June 2025 bankruptcy announcement. “Chapter 9 allows us to do just that.”

FAA Requires Continued Airport Access

Under the FAA’s grant assurances, airports receiving federal funding must make their facilities available to aeronautical users on reasonable terms without unjust discrimination. The FAA determined that the city’s financial circumstances did not relieve it of those obligations and that an indefinite prohibition on new leases constituted an unreasonable restriction on airport access.

According to the city’s website, Cle Elum Municipal Airport has five privately owned hangars situated on leased municipal property and no additional hangars available for rent.

The decision comes as airport tenants elsewhere have challenged leasing restrictions and rising costs, including a recent hangar dispute at Colorado’s Centennial Airport. In that case, the FAA declined to reconsider a complaint involving an 82 percent rent increase after determining that complainants had not established a grant-assurance violation.

Cle Elum must now address the FAA’s findings through a corrective action plan. A timetable for resuming new ground leases has not been confirmed.