Unconcerned With Offending LA, Ontario Forming Airport Authority

Ontario city officials seem to be unconcerned about the perception or reality that they are putting the cart in front of the horse in their latest aggressive moves to wrest Ontario Airport back from the city of Los Angeles.
According to a press release disseminated early this week, the city is working toward forming an Ontario Airport Authority which is to exist as an entity involving Ontario, San Bernardino County and perhaps other local municipal governments. Ontario officials envision that this newly created authority will supersede the joint powers authority involving Ontario and the city of Los Angeles that was created in 1967.
After the formation of that original joint powers authority for the airport more than 44 years ago, Los Angeles used its influence with the airlines to induce them to establish flights into and out of Ontario and furthermore through its Department of Airports committed to making airline facility improvements worth at least $20 million in 1967 dollars. Whereas in 1966, passenger traffic out of Ontario Airport stood at  under 200,000 passengers per year, by 1969, flights out of Ontario dramatically increased and continued to do so for the next 38 years, though  a benchmark of 10 million passengers at the airport by 1975 was not  achieved. Under Los Angeles’ management, the gravel parking lot was paved. In 1981, a modern, second east-to-west runway was built, necessitating the removal of the old northeast-to-southwest runway.  A few years later, as Los Angeles officials stepped up pressure on Ontario officials to have them cede ownership of the airport in total to Los Angeles, then-Ontario mayor Robert Ellingwood resisted, instead seeking to have the joint powers authority rescinded so Ontario could again assume control of the aerodrome. But on February 19, 1985, at a council meeting when Ellingwood was too ill to attend, the city council voted 4-0 to transfer title to the airport to the city of Los Angeles. Ellingwood refused to endorse the transfer documents with his signature. Instead, the documents carried the signature of then-mayor pro tem Faye Myers Dastrup.  Los Angeles took over ownership officially on July 1, 1985.
In 1987, the departure runway was extended to the east.  In 1997 and 1998, Los Angeles built two modern 530,000-square foot terminals at the airport at a cost of $270 million. In 2005-2006, the airport’s departure runway was repaved, received storm drains, and runway lighting was improved. The airport’s taxiways were widened. The same year Aeroméxico started seasonal flights to Guadalajara and Mexico City, making Ontario a true international airport.  The airport was also renamed Ontario/LA International Airport, ostensibly to avoid confusion with an airport in Canada.
Use of the airport continued on an upward trend for the first four decades it was under the control of Los Angeles, peaking in 2007, when 7.2 million passengers enplaned there. But from that point on, Ontario Airport has seen its use decline. In 2008, 6.2 million passengers took flights from the airport, a drop of 13.5 percent compared to 2007. In 2009, the airport had 4.95 million passengers pass through it. That trend continued in 2010, with 4.8 million travelers flying from Ontario International. Simultaneously Los Angeles World Airports undertook a flurry of improvements at Los Angeles International intended to make traveling in or out there more convenient to passengers.
In the last year, passenger volumes in Ontario continued to decline, with travel at Los Angeles International Airport picking up. Just under 4.6 million passengers took flights out of Ontario International in 2011.  At Los Angeles International, passenger traffic increased by nearly 6 percent.
In 2009, Ontario officials began a dialogue with Los Angeles officials about combating the downward trend in passenger traffic at Ontario. But Los Angeles officials were not keen on surrendering any share of the market Los Angeles International had captured in the aftermath of extensive improvements to that airport.
Ontario officials gravitated toward the conclusion that reacquiring the airport was paramount and that not leaving its destiny in the care of Los Angeles officials, whose first loyalty consisted in keeping Los Angeles International Airport thriving, was the only realistic approach to the problem.
They began pushing Los Angeles to allow a public agency-to-public agency transfer of the airport at no consideration, reversing the 1985 action.
Los Angeles officials balked at that, asserting that over the past 45 years, Los Angeles World Airports has made significant investments to modernize Ontario Airport, entailing the expenditure of over $560 million toward capital improvements there.  Los Angeles officials maintain that money consisted of a combination of Los Angeles and Ontario airport revenues, Federal Aviation Administration grants and bond proceeds secured by Los Angeles World Airports, which is the entity created by the Los Angeles Department of Airports to run Los Angeles International Airport, Van Nuys Airport, Palmdale Airport and Ontario Airport.
The once cordial relations between Ontario and Los Angeles municipal officials have grown increasingly acrimonious, with those in Ontario suggesting that their counterparts in Los Angeles are purposefully mismanaging Ontario Airport to ensure substantial passenger traffic levels are maintained at Los Angeles International. They are carrying out a public relations campaign aimed at propounding the concept of having Los Angeles and Ontario simply rescind both the 1967 joint powers agreement and the 1985 title transfer. In public pronouncements, Ontario officials have suggested that the title transfer should be made for no consideration, just as the 1985 transfer was made. They maintain that as a public benefit entity, the airport has no value as real estate per se. Privately, however, Ontario officials have offered what is tantamount to $250 million to Los Angeles for the return of the airport, consisting of $50 million cash, an agreement to pick up the remaining $75 million in outstanding bond obligations relating to financing for infrastructure at the airport and to over time divert $125 million in future passenger facility charges at the airport to Los Angeles.
Los Angeles World Airport officials have been privately advising members of the Los Angeles City Council to seek to recover as much of the money put into improvements at Ontario Airport since 1967 as possible and to accept no less than $450 million for the airport. Meanwhile, Los Angeles Mayor Anthony Villaraigosa and a majority of the Los Angeles City Council have indicated they are not inclined to consider a sale of the airport during the current down real estate market and want to wait at least two years before entertaining the notion of transferring the property back to Ontario.
Nevertheless, a two-person minority on the 15-member Los Angeles City Council, Dennis Zine and Bill Rosendahl, in January called for a study of how to return LA/Ontario International Airport to Ontario. Their motion was referred to the council’s Trade, Commerce and Tourism Committee, which was scheduled to meet on March 20 in an effort to “determine the fair market value of Ontario Airport, including the land, facilities, financial assets and liabilities, then report on the process by which a sale of this facility could occur between the city of Los Angeles and the city of Ontario.”
Rosendahl, a member of the three-person Commerce and Tourism Committee, was hopeful that he could convince the other two committee members, Tom LeBonge and Joe Buscaino, to recommend that the full council move forward with an appraisal and a report summarizing proposed terms of a sale. Before Tuesday’s meeting, the city of Ontario’s intention to form, in conjunction with San Bernardino County and possibly other municipal entities, a new airport authority was publicized. Against that backdrop, Zine was heard by the committee. He asserted that Los Angeles International Airport is “overburdened” and Ontario Airport “underutilized,” with terminals that on occasion stood “virtually empty.” While Zine made a case that some redistribution of the airport passenger traffic in Southern California would be desirable, he and Rosendahl were not successful in convincing LaBonge that an immediate title transfer was necessary to achieve that. Instead the committee asked for a report on the issues relating to the sale be completed in 90 days.
In Ontario, Mayor Paul Leon said he did not think that Ontario needed to be sensitive to diplomatic protocol in dealing with Los Angeles, which still owns the airport and ultimately will decide at what price the airport will be sold or whether it will be sold at all.
“I’m not in a place where I am concerned about offending anyone in Los Angeles,” Leon said. “Here in the Inland Empire, everyone in this region is offended by what Los Angeles is doing to us. We are suffering economically.  We have lost 9,500 jobs because of what is happening to the airport. The regional economy has lost half of a billion dollars. We have one and a half of million more cars driving on the freeways every year because of what is happening, or not happening, at the airport. If anyone needs to be offended, it is us. Los Angeles and Los Angeles World Airports have been engaging in mismanagement of the airport. How they feel about it has nothing to do with what we have to do with expedience for Ontario and the Inland Empire, which is preparing ourselves to take back the Airport, and we have to do that now.”
Leon said the council was originally set to officially discuss the formation of an airport authority at this week’s council meeting but the item had been withdrawn. He said that the authority’s precise make-up “hasn’t been determined.”
In their effort to reestablish control and ownership of the airport, Ontario officials have sought the backing of other local municipalities in both San Bernardino and Riverside counties as well as the county government in San Bernardino County, where the current chief executive officer, Greg Devereaux, was formerly Ontario city manager.  Based upon previously published reports and statements that have emanated from Ontario City Hall, the new joint powers authority will likely consist of a five-member board that will include two members of the Ontario City Council, one or two members of the county board of supervisors or county executive staff and one or two other members to be drawn from the business sector or a city council within the region.

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