FAA Finds Cle Elum, Washington, Airport Lease Moratorium Violates Federal Grant Assurances

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.

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 leasing moratorium was set to remain in effect until the bankruptcy proceedings concluded and officials determined whether to continue operating the airport.

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.

Elsewhere, airport tenants 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.

The Cle Elum outcome shows how grant assurances work as a floor under airport sponsors that take federal money. A sponsor can be insolvent and still be held to the access obligation, so a pause on leasing cannot be used as a budgeting tool while other decisions about the airport's future are made.

The Centennial dispute, by contrast, ended without a finding against the airport, which illustrates that a complaint succeeds only when the complainants can establish a specific assurance violation. Access restrictions that are total and open-ended, as in Cle Elum, sit closer to the line than price increases that users merely find steep.

The next milestone is the city's corrective action plan. A timetable for resuming new ground leases has not been confirmed, so the content of that plan, and whether it sets dates for reopening leasing, is the point on which the outcome turns.