Ontario Rethinking Efficacy Of Suing LA

(December 9)  Ontario has declared a temporary legal truce with Los Angeles over its effort to wrest back ownership and control of Ontario International Airport.
On June 3 Ontario filed a lawsuit against Los Angeles claiming the larger city has been purposefully mismanaging the airport. The lawsuit seeks the return of the airport to Ontario’s possession.
In August, Ontario overcame a motion by Los Angeles to have the suit dismissed, but has made little progress legally since that point.
With the prospect of years and perhaps decades of protracted and expensive litigation over the issue, with no guarantee that it will prevail, Ontario has apparently reached the conclusion that working out a solution outside the legal forum may be the better approach.
On December 5, Riverside County Superior Court Judge Gloria Connor Trask consented to allow both parties to put further legal action on hold at least until January 31 while they seek a resolution. Los Angeles, represented by attorney Steven S. Rosenthal and Ontario, represented by the law firm Sheppard Mullen Richter and Hampton, indicated their legal teams will take a hiatus while officials seek to hammer out a solution between themselves.
The development reflects more of a change on Ontario’s part than on that of Los Angeles. Three days after the suit was filed, then-Los Angeles Mayor Antonio Villaraigosa sent a letter dated June 6 to Ontario Mayor Paul Leon offering to reopen negotiations over the transfer of ownership and management of Ontario Airport from Los Angeles to Ontario.
In that letter, Villaraigosa stated, “I stand ready to resume negotiations between our cities upon withdrawal of the city of Ontario’s lawsuit against the city of Los Angeles.”
Villaraigosa, whose term as mayor ended less than a month later, held out hope that the airport ownership and management differences separating the two cities could be ironed out expeditiously and perhaps before he left office. “I have always believed, and continue to believe, that if we work together in good faith, we can achieve such a transfer,” Villaraigosa wrote “I continue to support regionalization of air traffic, with the long-term growth of Ontario International Airport as a viable alternative to Los Angeles International Airport (LAX). While these are difficult times for medium and small airports across the nation, I agree that focused marketing of Ontario International Airport can and should help grow Ontario International Airport over the long-term.”
Villaraigosa said he and Los Angles were taken aback by the lawsuit.
“With all of the above in mind, I was quite perplexed that the city of Ontario would file a claim and subsequent lawsuit,” Villaraigosa said. “Given the urgency you and other stakeholders have expressed, it would be more productive to continue our negotiations with the shared goal of identifying a mutually acceptable way to accomplish the transition. Both sides should sit down again and hammer out a mutually agreeable arrangement.”
Ontario, which maintained that Villaraigosa’s letter had not been received until June 12, told Villaraigosa in a letter from Mayor Paul Leon  “a legitimate settlement meeting cannot be subject to an unreasonable condition precedent,” rejecting  Villaragoisa’s call for Ontario to drop the lawsuit. “That is not a reasonable demand,” Leon wrote. “Ontario filed the lawsuit after all other avenues of relief were exhausted.  Having been forced to file the case, it is not going to withdraw it as a prerequisite to a settlement meeting, especially given that the current Los Angeles mayoral administration will be transitioned out of existence in a little more than two weeks. With your administration’s professed desire to seek a negotiated resolution before you leave office, it should withdraw the demand that the lawsuit be dismissed prior to any such discussions.”
While Ontario officials had expressed their belief that Villaraigosa’s successor, Eric Garcetti, would be far more amenable to having Los Angeles let the airport go back to Ontario, they were chastened to learn that Garcetti was made even more upset by the filing of the lawsuit than his predecessor. In October, Ontario City Councilman Alan Wapner, who has taken the lead among Ontario officials with regard to Ontario’s assertion of what they consider the city’s rightful control of Ontario Airport, publicly expressed himself as being frustrated with Eric Garcetti and his lack of focus on Ontario Airport and his seeming unwillingness to dialogue with Ontario with regard to the airport’s future.
Last week, however, there was indication that Wapner and other Ontario officials have engaged in some level of introspection, perhaps concluding that it is not reasonable to expect Los Angeles to be carry on blithely while Ontario is suing it.
Ontario and Los Angeles have not always been at loggerheads over the airport.
In 1967, when Ontario Airport had a gravel parking lot and was servicing fewer than 200,000 passengers per year, Ontario and Los Angeles entered into a joint powers agreement to allow Los Angeles to use its clout with airlines to increase flights into and out of Ontario. Under Los Angeles’ guidance, the airport grew, more airlines began flying out of the facility and improvements were made to its runways and terminals. In 1985, after all of the conditions set down in the 1967 joint powers agreement had been met, Ontario deeded the airport to Los Angeles for no consideration.
In 2007, the airport achieved its high mark in terms of passenger traffic, when 7.2 million passengers enplaned there. But since that time, passenger traffic through Ontario Airport has diminished to 3.9 million per year and Ontario officials maintain that Los Angeles World Airports (LAWA), the corporate entity that Los Angeles utilizes to run Los Angeles International, Van Nuys Airport and Ontario Airport, has stifled Ontario International in a deliberate effort to benefit Los Angeles International, where improvements have been made and passenger traffic has continued to rise for the past seven years. In its now-four-year-long campaign to have Los Angeles deed the airport back to Ontario, Ontario officials have publicly insisted that LA should relinquish the airport for no consideration because the airport is considered a public benefit property which has no sale value. Privately, however, Ontario has offered Los Angeles $246 million for the airport. Simultaneously, Los Angeles has sought potential private and public buyers for the aerodrome at reported prices ranging from $225 million to $650 million. Last year Los Angeles revealed the existence of Ontario’s $246 million offer, embarrassing Ontario officials with an exposé of the discrepancy between their public and private statements. Last year, Ontario, with the county of San Bernardino, formed the Ontario International Airport Authority, an entity intended to take over ownership and operation of the airport once Los Angeles relinquishes it.
Los Angeles officials attribute the decline in passenger traffic through Ontario to the recession that has persisted since 2008 as well as widespread changes in the airline industry in which air carriers have reduced flights to outlying airports or non-centralized hubs. They say the airlines have proven resistant to LAWA’s earnest efforts to lure the airlines back to Ontario.  The terms of the 1967 agreement remain in place and Los Angeles maintains it has consistently lived up to that agreement.
In January, Los Angeles offered to sell the airport to Ontario for $475 million. In April, Ontario rejected that offer.
In his letter to Villaraigosa, Leon emphasized that Ontario believed Los Angeles was overpricing the facility, saying that “Ontario would be very interested in sitting down with the current administration to discuss a potential resolution” but only if the Los Angeles “administration is willing to consider terms materially less dramatic to Ontario than its prior demand of a $475 million payment for the return of Ontario International Airport.”

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