Don’t be alarmed. While there are a number of documents involved with preparing to acquire and operate the airport, they are no way near as voluminous as the graphic suggests!
How are we structuring Flying Acres Homeowners Association (FAHA) for airport ownership?
2/27/2024 Revised graphic to better reflect only FAHA being the single member in the LLC.
Two separate legally recognized organizations are being created. The first is a restructuring of FAHA from a voluntarily supported non-profit corporation into a non-profit bound to the property of Flying Acres homeowners. This change only happens if a homeowner agrees to it. The second organization is New Crest Airpark, LLC, a limited liability company wholly owned by FAHA. Note that only the Homeowners Association (FAHA) is a member of the LLC, not individual property owners. The LLC exists solely for the purpose of buying and operating the airport on behalf of FAHA. This division between the FAHA and the LLC provides liability protection for FAHA and its members and eases tax reporting related to operating the airport.
You can find much more detail about the Flying Acres Homeowner Association background, the purchase process, some financial information, and organization in the Purchase Participation Memorandum (PPM).
So, what are all the documents I see on the website?
It is easiest to consider the documents from the viewpoint of the organization that they pertain to. Let’s start with FAHA. The Flying Acres Homeowners Association has three documents related to its formation and operation.
Articles of Incorporation
The first is the Articles of Incorporation filed with the State in 1992. The articles are a relatively short document whose primary purpose was to create FAHA as a non-profit entity legally recognized by the State of Washington. The articles provide some basic rules for the operation of the corporation. The original name, Crest A.E.R.O., Inc., was later changed to Flying Acres Homeowners Association.
Flying Acres Homeowners Association Agreement
The Flying Acres Homeowners Association Agreement (Association Agreement) is a new document under development. It is the primary instrument to make Flying Acres Homeowners Association a true neighborhood association with responsibilities and authority necessary to function as members expect. It replaces the Agency Appointment that granted FAHA its original mandate to negotiate on behalf of the members with the airport owner and manage the ongoing relationship. The Association Agreement takes a significant step forward over the Agency Appointment by binding individual lots and their owners to FAHA. The major functions are establishing budgets, collection of assessments, and managing the LLC per member direction. FAHA has no authority to establish or enforce what homeowners do with their property. It also has no authority to establish rules for taxiways or to intervene in homeowner disputes.
FAHA Bylaws
FAHA members approved new bylaws on October 2, 2022. The Bylaws, by themselves, grant no legal authority over any individual Flying Acres property and its owner. They are strictly the rules for managing the organization. For the most part, the bylaws are the rules for the Board of Directors to follow as they conduct association business. It is the Association Agreement that grants the authority the Flying Acres Homeowners Association needs to act on behalf of and for the benefit of property owners.
Two documents are behind the creation of New Crest Airpark, LLC.
Limited Liability Company Registration
New Crest Airpark, LLC must register with the State of Washington. The registration is a relatively short form that creates the company, doing little more than register the name of the company, provide a business address and contact information. The registration, once filed, can be seen on the State of Washington’s website for corporations.
Limited Liability Company Operating Agreement
The operating agreement covers all aspects of the company’s operation. New Crest Airpark, LLC is a single member LLC where FAHA is the sole member. The LLC has the authority to purchase the airport and manage its operation subsequent to the acquisition. The initial Manager is the FAHA Board of Directors. FAHA members indirectly manage New Crest Airpark by whom they elect to the board and by the directions members give to the FAHA board. Several constraints on the Board of Directors such as incurring debt are restricted to the sole member, FAHA. The board cannot act alone to incur debt. There are other constraints.
Please note, this is a high-level discussion and may not clearly explain all of the moving parts involved. Members are encouraged to contact any member of the board if they still have questions or want additional information. Members are also encouraged to consult with their own attorney.