Suspended Litigation Between LA And Ontario Over Airport To Resume

(February 5)  A two-month respite in the legal wrangling between Ontario and Los Angeles over Ontario International Airport has concluded without any resolution of the issues which divide the two cities.
On June 3, 2013 Ontario filed a lawsuit against Los Angeles claiming the larger city, which has held title to the airport since 1985, has been purposefully mismanaging the facility. 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 had 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 in November sought to work out a solution outside the legal forum.
On December 5, Riverside County Superior Court Judge Gloria Connor Trask consented to allowing both parties to put further legal action on hold at least until January 31 while they looked into crafting an accommodation. Los Angeles, represented by attorney Steven S. Rosenthal, and Ontario, represented by the law firm Sheppard Mullen Richter and Hampton, indicated their legal teams would take a hiatus while officials from both cities attempted to hammer out a solution.
No progress has been reported, and with the January 31 deadline elapsed, it appears both sides will be headed into court once again. Beyond the assertions contained in the original complaint, however, the suit is amorphous. Ontario maintains Los Angeles has favored Los Angeles International Airport over Ontario International in its management practices, but has yet to establish that the smaller city has any proprietary right to the aerodrome, despite the consideration that it exists within its city limits.
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 their 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 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. In 2012, 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 2013, Los Angeles offered to sell the airport to Ontario for $475 million. Three months later, Ontario rejected that offer.
Los Angeles World Airports last week released a report indicating that passenger traffic in 2013 dipped to the level near or below that the airport had when Los Angeles assumed ownership. 1985 had been the last time the airport had experienced ridership of less than 4 million annual passengers. According to LAWA, in 2013 a total of 3.9 million passengers landed or departed from Ontario, a drop of  8 percent from 2012.
Ontario officials will be able to use that figure to bolster their contention that Los Angeles is either irresponsibly neglecting operations in Ontario or maliciously acting to hurt Ontario’s operations to boost passenger traffic into and out of Los Angeles International. Indeed, Los Angeles World Airports imposes on the airlines flying out of Ontario Airport one of the highest per enplaned-passenger charges in the nation –  $12.68. This has driven down the profitability of the airlines and upped the cost passengers must pay for tickets in Ontario, driving them to utilize other venues, such as John Wayne Airport in Orange County or Los Angeles International.
In the nearly eight months that have elapsed since the filing of the lawsuit, Ontario has made no progress in turning a corner on the problem. Ontario officials took a calculated risk in filing the suit, believing that incoming Los Angeles Mayor Eric Garcetti would be far more amenable than previous Los Angeles Mayor Anthony Villaraigosa 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.

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