Leon Denies Ontario Bit Off More Than It Can Chew With Airport Acquisition

Ontario Mayor Paul Leon this week downplayed suggestions that his city had bitten off more than it can chew and had acted too aggressively in its effort to wrest ownership and management of Ontario Airport back from Los Angeles. He said the city’s tardiness in taking control of the airport was due to bureaucratic snafus that were beyond the city’s control.
Ontario Airport had fewer than 200,000 passengers pass through its gates in 1967, at which time it entered into a joint operating agreement with Los Angeles. Under Los Angeles’ stewardship of the aerodrome, it grew exponentially, as the megalopolis was able to use its control over gate positions at Los Angeles International Airport to induce more and more airlines to fly into and out of Ontario.
All told, Los Angeles instituted some $550 million worth of improvements to the airport, including paving its gravel parking lot, laying down a second and entirely new east-to-west runway over its obsolete northeast-to-southwest landing strip, and modernizing its existing east-to-west runway, including the widening of taxiways and the addition of storm drains. Ontario Airport’s landing and take-off paths were converted into the longest such civilian facilities in Southern California, and Los Angeles erected a state-of-the-art control tower, and constructed two ultra-modern terminals at a cost of $270 million, augmented with a world class concourse.
In 1985, after all criteria in the joint operating agreement were met, Ontario deeded the airport to Los Angeles for no consideration. The airport continued to prosper under the guidance of Los Angeles World Airports, the airport-managing corporate arm of Los Angeles, which manages and operates Los Angeles International, Ontario and Van Nuys airports. In 2007, 7.2 million passengers flew into and out of Ontario. The downturn of the economy that ensued, however, prompted a drop off in the number of passengers and some airlines cease operating there. This triggered what turned into an acrimonious tussle between Ontario officials, led by councilman Alan Wapner, and Los Angeles officials over the management and ownership of the aerodrome. Ontario charged Los Angeles with purposefully mismanaging the airport to increase ridership at Los Angeles International Airport. Ultimately, in June 2013, Ontario filed suit against Los Angeles, seeking the return of the airport.
Last year, in a deal tentatively arrived at in August and ratified in December, Ontario agreed to pay Los Angeles $150 million for the airport, provide another $60 million to purchase assets technically belonging to Los Angeles World Airports that are in place at Ontario Airport and which are 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 as of next week, July 1, 2016.
It does not now appear that Ontario will meet that target date for the airport takeover.
In January, Congressman Ken Calvert introduced Bill 4369, intended to make future passenger fees at Ontario Airport available to partially defray the cost of building its two terminals, a major part of the investment Los Angeles made at the airport. Last week Bill 4369 was passed unanimously by the House of Representatives, clearing the way for up to $70 million in passenger facility charges being used to by Ontario to make good on its payments to Los Angeles.
The passage of Calvert’s bill is not sufficient to allow the airport to change hands. Another similar bill, one sponsored by Senator Dianne Feinstein, D-California, is to be considered by the Senate soon. If and after it passes, any discrepancies between the two bills will need to be hashed out and approved.
Leon said the delay in the projected transfer of the airport to local control was part of the normal bureaucratic waiting process and did not reflect on Ontario’s ability to take on responsibility at the airport. “The July 1 date was in line with the projections given to us last year,” Leon said. “To do the takeover, we needed to commit passenger fees in the future to service our debt. We have done everything we needed to do on our side. We are all in agreement that we would like it to happen as soon as possible. Federal laws have to be passed. Congress has taken action. Now the Senate has to vote on the same thing. As soon as that happens, we’ll be able to take the keys. That is the last thing we are waiting for.”
Asked if he truly believed Ontario was up to the task of running an international airport and if he regretted the vitriolic tone of Ontario’s campaign in demonizing Los Angeles during its effort to take the airport back and whether such criticisms of Los Angeles with its world class airport facilities were actually warranted, Leon said, “They weren’t running a world class operation at Ontario. That is the point. We have nowhere to go but up from the way things were. I don’t think anybody would disagree that when we started down this road we did what we had to do to get the community and region united about what we were claiming was going on here. We were dealing with Los Angeles airport management and a mayor of that city at that time [Anthony Villaraigosa] who were not paying enough attention to our pleas and claims. We had to rattle our sabers louder and louder until someone took notice.
“Fortunately, Mayor [Eric] Garcetti won,” Leon said with regard to Villaraigosa’s successor. “He has been wonderful. Our prayers were met. He has been outstanding. I can’t say enough or give him sufficient accolades. He genuinely understood and was quite clear it wasn’t a matter of if but when we would make the transition. When we started talking about this 15 years ago no one was listening. No one thought we could accomplish this. We took the correct course in retrospect. I don’t have any regrets.”
Leon continued, “As far as being able to operate a successful airport, I am very confident we can. Kelly Fredericks [who was lured away from managing Rhode Island’s largest airport to manage Ontario Airport] is our new ace in the hole. This guy is the real deal. All we have to do, basically, is get out of his way. He knows what he is doing. I am convinced he has the ability to turn this airport into what we all want it to be.”
Asked about the delay in the takeover and when Ontario would actually take title and control of the airport, Leon said, “It is impossible to say. The day is nearer than is has ever been. With this recent vote by Congress we are just waiting for the next vote by the Senate. That’s in the federal government’s hands. This will come sooner rather than latter but I cannot give you a strict time frame or time line. If I make a mistake predicting something it would look to everyone like we are being overly optimistic and we are exaggerating toward the positive. I will say it is coming soon, if it is not imminent.”
Leon bypassed suggestions that the city’s rhetoric during the battle with Los Angeles for the airport entailed making claims about Ontario’s ability to take on the Herculean task of running an airport that it cannot yet live up to. He countered with a suggestion of his own that it was others who had unrealistic expectations.
“Some think the airport will become ours and overnight there will be a sudden falling cost for flights or tickets, and that is not the reality,” Leon said. “We have work to do in order to basically make it so the airlines can come in here at a lower rate so they can increase their profits. It is going to be a little while before we right the ship that has been listing for years. This is going to require changes in the way things are done. When you look at those changes and challenges, we have to use what money we have to debt service the past bonds, pay the Los Angeles staff that is there for two more years, carry out deferred maintenance we have to do, and we have to upgrade the entire perception of the airport to get it to where it should be from an underperforming airport. We want to change things as soon as possible but this isn’t going to be quick, boom, everything is done.”
That would seem to require that the city use taxpayer money to subsidize airport operations until such time as it meets its performance goals. But Leon said the city could not legally do that.
“We’re still bound by federal aviation law,” Leon said. “The airport has to be self sustaining. It is not something we can somehow prop up. It has to pay for itself. That means we are going to have to be creative in attracting a new kind of customer base. Ticket prices may not come down immediately but we will find a way to make people understand it is much more efficient and convenient to fly from Ontario, and the savings in time and distance traveled on the freeway and the convenience far outweigh the cost savings they might get in flying from another airport. We have to find a way to promote it in a way it has not been promoted before, that Ontario is the place to fly out of.”

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