By Mark Gutglueck
In a move that immediately raised concerns that a revolving door ethos may have infested the management echelon at Ontario International Airport, the agency overseeing the airport’s operation has given lucrative consulting contracts to former San Bernardino County Chief Executive Officer Greg Devereaux and Chris Hughes, who succeeded Devereaux as Ontario City Manager in 2010, when Devereaux left Ontario to take on the top administrative post with the county.
Ontario Airport has only recently returned to local control, after nearly a half century of being under the professional management of the City of Los Angeles, the Los Angeles Department of Airports, and the corporate entity Los Angeles uses to operate its aviation facilities, Los Angeles World Airports.
The incestuous nature of the hirings was at once a major topic of discussion among many inside and outside of politics in San Bernardino County.
Devereaux was Ontario city manager from 1997 until he was prevailed upon by the county, in the form of then chairman of the board of supervisors Gary Ovitt, to take on the position of county chief executive officer in January 2010. Ovitt had been Ontario mayor during the early years of Devereaux’s tenure as city manager in Ontario.
In 1967, long before Ovitt or Devereaux had arrived on the scene, the then-current Ontario officials had made a command decision to enter into the first joint powers agreement relating to Ontario Airport, one aimed at effectuating the expansion of the facility, which that year had fewer than 200,000 passengers pass through its gates. The joint operating agreement the Ontario City Council ratified with the City of Los Angeles permitted the larger city to use its stronger negotiating position with the airlines serving Southern California to induce them to utilize Ontario Airport. Using the leverage it possessed by virtue of its control of gate positions at Los Angeles International Airport, Los Angeles persuaded a whole host of airlines to begin flying into and out of Ontario, transforming the former backwater airfield into a world class aerodrome, paving its gravel parking lot, eliminating one of its obsolete runways, improving its existing east-west runway and constructing another, and in the late 1990s constructing an ultra-modern concourse and two new terminals. All told, Los Angles pumped more than half of a billion dollars into improvements at Ontario Airport.
In 1985, after all of the performance criteria in the original joint operating agreement were achieved, the city council, acting against the wishes of then-mayor Robert Ellingwood and during Ellingwood’s absence, voted 4-0 to deed the airport to the City of Los Angeles for no consideration. During the more than two-decades after that transition, the airport continued to prosper, with ridership rising to an all-time record 7.2 million in 2007.
2007 proved to be the high water mark in the relationship between the cities of Los Angeles and Ontario with regard to Ontario International Airport. That year, two events transpired to sour those relations and send the two cities onto a collision course with one another. The first of those was Los Angeles’ push to step up the modernization of Los Angeles International Airport, which would ultimately lead, at least in part, to soaring passenger numbers there. The second event was the massive economic downturn that transitioned into a lingering national, statewide and regional recession that perpetuated itself for nearly seven years. Airlines, in an effort to shield themselves from the continuing economic decline, began cutting back on flights, particularly to locations outside heavy population centers. Beginning in 2008 and until mid-2014, passenger traffic at Ontario International declined steadily. This led to a deterioration in the working relationship between Los Angeles and Ontario.
In the latter three years of Devereaux’s tenure as city manager, there was some discussion of the desirability of Ontario eventually regaining ownership and operational control of the airport, but there was no concerted move in that direction, and the assumption was that once the recession abated, Ontario International Airport yet under Los Angeles’ management would again reestablish itself as a vibrant hub airport within a large geographical trade area containing a rapidly growing population. In addition, Devereaux, whose consummate skill at running large organizations did not involve a formula that included getting into gratuitous power struggles with other governmental entities, was constitutionally averse to challenging Los Angeles over ownership of Ontario Airport. Given the sheer scope and complexity of that operation and the paramount need to keep it functioning smoothly, he let it ride.
When Devereaux departed to become the county’s chief executive officer, the Ontario City Council tapped the city’s 46-year-old fire chief, Chris Hughes, to succeed him. It was early on under Hughes’ watch that Ontario officials, led by city councilman Alan Wapner, initiated a campaign aimed at wresting control and ownership of Ontario International Airport back from Los Angeles. Los Angeles officials at first ignored and then began to resist that effort, which grew increasingly strident and uncivil. Ontario officials, with Wapner in the lead, began to openly charge that Los Angeles World Airports, the corporate entity Los Angeles used to operate its airports, was deliberately managing Ontario International operations to raise costs and minimize both revenues and ridership there as part of a plot to increase revenue and gate numbers at Los Angeles International Airport. Los Angeles officials denied those accusations, pointing out that the airlines were being pushed by their own economic imperatives.
In 2012, well after Ontario had escalated a sharply-worded and increasingly acrimonious campaign to induce Los Angles to surrender its ownership and management control over the airport but nearly a full year before Ontario filed a lawsuit aimed at just that end, a joint powers authority was formed involving both the City of Ontario and San Bernardino County. That entity, the Ontario International Airport Authority, was created, ostensibly, to serve as the administrative agency to guide its operations, management, marketing and development “should the city acquire it from Los Angeles.” Notably, Devereaux was intimately involved on the county end in the formation of the joint powers authority. The city of Ontario, even before the authority was officially chartered, designated councilmen Alan Wapner and James Bowman to sit as Ontario’s representatives on the five member authority board. The county chose Ovitt as its representative, thus providing virtual assurance that the airport would be run in accordance with Ontario’s priorities.
In 2013, in the waning days of Anthony Villaraigosa’s tenure as Los Angeles mayor, the city of Ontario, through the Washington, D.C.-based law firm of Sheppard Mullin Richter & Hampton, sued Los Angeles in the neutral forum of Riverside Superior Court, charging Los Angeles and Los Angeles World Airports with willful mismanagement of Ontario Airport and seeking the return of the aerodrome to the city in which it is located.
During the period leading up to Los Angeles returning Ontario Airport to Ontario, Ontario city officials couched the transfer in terms to suggest that the airport would be returned to “regional” control or “local” control, thereby downplaying the otherwise well understood proposition that the airport – which lies within the Ontario City Limits – was to be controlled in actuality by Ontario.
In a deal tentatively arrived at in August 2015 and officially ratified four months later, a ceasefire in the legal and procedural war between Ontario and Los Angeles relating to the airport was declared, with Ontario agreeing to pay Los Angeles $150 million for the airport, provide another $60 million to purchase assets technically belonging to Los Angeles World Airports that were in place at Ontario Airport and which were crucial or indispensable to its operations and assume bonded indebtedness of roughly $50 million related to the airport. Los Angeles agreed to transfer ownership and operation to Ontario.
In December 2015, the cities of Los Angeles and Ontario closed that deal.
Roughly a month later, Ontario lured Kelly Fredericks, the president and CEO of the Rhode Island Airport Corporation and the de facto executive director of the T.F. Green Airport in Providence, Rhode Island, to guide the city in its transition to ownership and operation of Ontario International. Fredericks officially began as Ontario Airport CEO in March 2016. Fifteen months later, however, Fredericks found himself on the outs with a majority of the board and on July 5, 2017 the board during a closed-door session removed Fredericks as the airport’s executive director, effective immediately.
An issue that led to Fredericks’ ouster is the escalating pressure, vectored through Ontario’s political leaders, to free up the expanse of land surrounding the airport, which is considered to be a part of the airport’s footprint by virtue of ownership rights and control, for development. At present, the lion’s share of that property is not being used for what is considered to be strictly-aviation related purposes but rather as a buffer. The elected officials on the board, as well as their elected colleagues, who are the recipients of largesse from developmental interests in terms of funding for their political campaigns, have been repeatedly importuned by those individuals and corporations bankrolling their political careers to free up the property so they can profiteer by acquiring it and converting it to either commercial or industrial use.
In their effort to please their campaign donors, the Ontario International Airport Authority’s board members have seized upon the representation that such development will provide for economic growth.
Fredericks, however, considered the stampede to develop the property at the airport’s periphery a shortsighted stratagem that would ultimately prove detrimental with regard to any future aviation-related expansion at the airport.
The differences between Fredericks and his political masters on the board were becoming increasingly evident as Fredericks dragged his feet in finalizing a master plan for the airport that would have included cataloging more than 200 acres in the immediate vicinity of the airport as surplus property to be actuated for sale in relatively short order.
Perceiving Fredericks as an obstructionist, the board as early as April began to send signals it was growing disenchanted with his leadership, while simultaneously waiting for him to conform his leadership with the board’s vision. When he did not, an effort to move him out as CEO began.
Of note in this regard is that Lucy Dunn, who had been a member of the Ontario International Airport Authority board since 2012, was heavily engaged in pressuring Fredericks to clear the way for the sale of the airport’s surplus property prior to his sacking. Dunn, who is the president and CEO of the Orange County Business Council and has connections to those potentially interested in the development of the property, has left the board.
Quietly, the four-member board on July 26 provided Devereaux and Hughes each with $20,000 per month consulting contracts that are guaranteed to run for 36 months, for a total of $720,000 or $240,000 per year.
The provision of the consulting contracts with Devereaux and Hughes were played close to the vest by the moving of the board’s July 25 meeting to July 26 and through language in the contracts and the agenda relating to them which referenced not Devereaux and Hughes, but rather their respective companies, Worthington Partners, LLC and Woodlawn Consulting, LLC. By the terms of those contracts, both are to remain in place for the full three years unless they are terminated with cause. If they are terminated without cause, they are to continue to receive their $20,000 per month stipends.
Devereaux’s contract specifies that he is to “assist Ontario International Airport Authority with consulting and representational services relating to the general administration of Ontario International Airport Authority and will include, but not be limited to, airport land development related issues, airport economic development, and advisory services to the Ontario International Airport Authority chief executive officer, Ontario International Airport Authority management, other Ontario International Airport Authority consultants, and Ontario International Airport Authority commission members on all matters mutually agreed upon, and as provided in the consultation agreement.”
Hughes contract calls upon him to “assist Ontario International Airport Authority with consulting and representational services relating to the general administration of Ontario International Airport Authority and will include, but not be limited to Ontario International Airport Authority organizational structure and development, airport economic development, airport development related issues, succession planning, management coaching, and advisory services to the Ontario International Airport Authority chief executive officer, Ontario International Airport Authority management, other Ontario International Airport Authority consultants and Ontario International Airport Authority commission members on all matters mutually agreed upon, and as provided in the consultation agreement.”
Concerns that have been expressed with regard to the Devereaux and Hughes contracts pertain to their length, the lack of performance criteria and performance-related accountability milestones therein, the appearance that the authority has become an insular den of insiders, and that their contracts essentially incentivize them to facilitate the sell-off of property to achieve a temporary infusion of capital while surrendering intensified aviation-related development as a long term strategy, an approach that is blurring the distinction between urgency and priority.
By Mark Gutglueck