Bill By Local, LA Solons To Give Ontario Airport Bond Mechanism

(March 2) With the outcome of Ontario’s lawsuit brought against the city of Los Angeles for the return of ownership and control Ontario International Airport yet in doubt, two members of the assembly representing those warring parties have cosponsored legislation aimed at giving Ontario the financial means to purchase the aerodrome back.
In 1967, when the airport had fewer than 200,000 passengers pass through its gates, Los Angeles and Ontario entered into a joint powers agreement that gave Los Angeles managerial and administrative control of the airport. Los Angeles used its leverage with the airlines relating to gate positions at Los Angeles International Airport to induce more and more airlines to fly into and out of Ontario. As ridership steadily increased, Los Angeles through its Department of Airports and later the corporate entity it formed to run them, Los Angeles World Airports, made major improvements to the airport in Ontario, paving its parking lot, lengthening and improving its existing east west runway and constructing another, such that Ontario Airport became the home to the longest commercial runway in Southern California. In 1985, after all of the performance goals specified in the joint operating agreement were achieved, the Ontario City council in a 4-0 vote with then-mayor Robert Ellingwood absent, voted to deed the airport to Los Angeles for no consideration. Further improvements were made to the airport thereafter, including the construction of two modern terminals and a concourse in 1998. The airport continued to grow and in 2007, 7.2 million passengers passed though its gates.
Following the economic downturn that gripped the nation, state and region economy late that year, however, ridership at the airport began a six-year decline, slumping steadily to 4.03 million in the year ending in July 2014. In June 2013, Ontario initiated a lawsuit against Los Angeles, alleging it has purposefully mismanaged Ontario Airport to increase passenger traffic into Los Angeles International Airport. In the suit, Ontario is seeking to take back ownership and control of the airport.
Ontario officials, led by councilman Alan Wapner, have aggressively asserted that Los Angeles has given Ontario Airport short shrift, maliciously intending to damage the local economy. They have publicly insisted that as a public benefit asset, the airport has no value as real estate in the common sense, and that Los Angeles should simply deed the airport back at no consideration. Privately, however, the city of Ontario tendered a $250 million offer to Los Angeles World Airports for transfer of the airport’s title and operational control. That offer included Ontario assuming $75 million of the outstanding bond debt obligations for past improvements to the airport, $125 million in future passenger facility charges to be realized at the airport and $50 million cash.
Los Angeles maintains that more than $550 million in improvements have been made at the facility since 1967. At one point Los Angeles city officials indicated they would take $450 million for the airport.
In its lawsuit, Ontario sought to bull its way past the 1985 deed transfer and the terms of the 1967 joint powers agreement, maintaining, through its law firm, Washington, D.C.-based Sheppard Mullin Richter & Hampton, that the terms of those commitments are not binding. Riverside Superior Court Judge Gloria Connor Trask, however, last week confirmed two tentative rulings issued in January that the 1967 joint-powers agreement is enforceable and that Ontario’s opportunity to rescind the transfer of the airport once existed but elapsed in 1989 because of the statute of limitations.
Ontario has three other claims remaining intact in its suit pertaining to the contention that Los Angeles breached the terms contained in the joint powers agreement, but the smaller city’s prospects of forcing Los Angeles to forsake ownership of the airport without compensation appears dim, at best.
Last week, just as the ink on Judge Trask’s confirmation of her January was drying, assemblyman Freddie Rodriguez, D-Chino, and assemblyman Jimmy Gomez, D-Los Angeles, submitted legislation, since identified as Assembly Bill 1455 that will authorize Ontario to issue bonds to finance the airport’s purchase.
The effort by Rodriguez and Gomez with their legislation submitted February 27, follows by ten days a bill introduced by Melissa Melendez, R-Lake Elsinore, Assembly Bill 360, that imposes on Los Angeles a mandate that it transfer ownership of the airport to Ontario.
Pundits have not given Melendez’s bill high marks and it has little prospect of passing.

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