Seven days after the Federal Aviation Administration issued a finding that the construction of the massive-scale Eastgate Air Cargo Facility on the northeast portion of what was formerly Norton Air Force Base will have no significant impact on the environment that can not in some fashion be mitigated, the San Bernardino International Airport Authority on Monday December 30 approved a 35-year ground lease with master developer Hillwood Enterprises for roughly 100 acres of land at the aerodrome to move that project toward reality.
Some hailed the securing of Hillwood’s commitment to proceed with the Eastgate project as the most significant stride the Inland Community has made toward a practical adaptation of the long dormant property at the base, the closure of which a quarter of a century ago represented a financial blow to the region which sent the City of San Bernardino and its environs into an economic tailspin from which it has yet to recover. Others, however, see the project as one that is fraught with potential and real environmental havoc, while offering in the long term only marginal employment for local residents in the logistics and warehouse industry.
The Eastgate project was brought forth by Hillwood Enterprises, LP, of which Ross Perot, Jr. is the chairman. Hillwood in January 2017 obtained from the San Bernardino International Airport Authority’s board of directors an exclusive right to negotiate for a ground lease on a 2 million square foot expanse located on the airport property for the creation a cargo logistics center. The keystone to the project is the 35-year ground-lease agreement with the San Bernardino International Airport Authority which was achieved this week. Based upon Hillwood’s representations, the center is to be subleased to an as-yet unnamed eventual tenant/operator.
The undertaking entails the creation of a new hub at San Bernardino International Airport which will mean a substantial increase in cargo flights out of the facility.
The San Bernardino International Airport Authority Board vote ratifying the lease and its terms followed by four months a public vetting and hearing process culminating in August which involved an extended environmental review of the project’s implication. That review entailed standards embodied in the California Environmental Quality Act and the National Environmental Protection Act, along with the input of local jurisdictions, the Federal Aviation Administration, the South Coast Air Quality Management District, other governmental entities and consulting environmental specialists.
According to the environmental impact report on the project, “San Bernardino International Airport Authority proposes to develop the Eastgate Air Cargo Facility to accommodate the demand for air cargo logistics operations” and the project will involve “construction of taxilanes and an aircraft parking apron to accommodate up to 14 aircraft, a 658,500-square-foot distribution center with connecting aircraft ramps, two 25,000-square-foot maintenance buildings, and automobile parking with approximately 2,000 parking stalls.” The upshot of the environmental impact report, which was paid for by Hillwood, was that the environmental review of the project was comprehensive, and measures built into the conditions of approval for the project will ensure mitigation of air and noise pollution and increased truck traffic.
Project opponents contend the environmental review was less than exhaustive and that the impacts from the project will have a deleterious affect on the environment and quality of life of those in close proximity to the project. Opponents of the project said the impact on the air quality over San Bernardino, Highland, Loma Linda, Redlands, Grand Terrace, Colton and as far away as Yucaipa and Mentone would prove onerous, and efforts to mitigate or offset that impact had not been adequate. Environmentalists said the project would wreak untold havoc on critical habitat for the spotted owl, a near-threatened species.
The decision-making body overseeing operations at the airport is the San Bernardino International Airport Authority. Currently, the San Bernardino International Airport Authority’s board consists of San Bernardino Mayor John Valdivia, San Bernardino Councilman Theodore Sanchez, Loma Linda Councilman Ovidiu Popescu, Highland Councilwoman Penny Lilburn, Colton Mayor Frank Navarro and Third District San Bernardino County Supervisor Dawn Rowe.  As a panel, the board functions under the specter of past boards, which for more than two decades tolerated a circumstance in which the authority signed off on the expenditure of hundreds of millions of tax dollars redirected from the participating jurisdictional entities to run the airport and make improvements there while very little was accomplished in terms of making the air facility and its accompanying structures and facilities viable operations.
Before the base closure, in accordance with federal requests, the governmental entities surrounding Norton formed two separate joint powers authorities intended to facilitate the civilian use conversion of the property. One of those was the Inland Valley Development Authority, known by the acronym IVDA, which was chartered to deal with zoning, land use and planning prerogatives to include the creation of light and heavy industrial, office/professional, commercial and residential development on approximately 600 acres on the former base property and roughly 14,000 acres surrounding it. The San Bernardino International Airport Authority was formed to convert the airbase and its airfield and runways into an international airport.
Initially, the County of San Bernardino and the cities of San Bernardino, Colton, Grand Terrace, Loma Linda and Redlands participated in both the agency and the authority, with the county and the City of San Bernardino most heavily involved and invested in the two joint powers authorities.
An infusion of substantial amounts of money into the authority and agency to fund their operations was made by the rerouting of property tax away from the county and the cities, primarily Highland and San Bernardino, and to a lesser extent Redlands and Loma Linda. Despite that, the former air base and its surrounding property languished in a holding pattern, essentially for the next two decades. A series of individuals were brought in to act as the authority’s and the agency’s executive directors, several of whom were political appointments and/or former elected officials provided with six figure salaries. Token efforts toward transforming the base into an airport were made, but no real progress in that direction was achieved.
Specifically, the authority board conferred executive directorships, which existed as sinecures paying in excess of $200,000 per year in total compensation, on a series of their various political associates, without any accountability with regard to performance. Moreover, a past board in 2007, without any competitive bidding, brought in Scot Spencer to serve as the contract developer and manager of the airport. Spencer had served a four-year prison term from 1995 until 1999 as a result of his fraud conviction relating to his having, in conjunction with financier Jeffrey Chodorow, absconded with $14 million of company and investor funds by hiding payments to a shell company they created after they swooped in to create Dallas-based Braniff International Airlines, Inc. after Braniff Airways, which had been in operation since 1928, had faltered and fell into bankruptcy in 1982.
Spencer used his position as airport manager at San Bernardino International to provide businesses he owned favorable leasing arrangements while obstructing other aviation-related companies from operating. As the contract developer of the airport, Spencer was paid to oversee what was supposed to be a $38 million renovation of the airport’s passenger terminal and a $7 million development of its concourse. Spencer undertook that assignment amid confident predictions that upon completion of those projects, the airport would attract at least one and perhaps as many as a half dozen commercial passenger carriers.  In carrying out that project, Spencer used two corporations he owned, Norton Development Company, LLC and SBD Properties, LLC. The cost of the passenger terminal and the concourse escalated to $142 million. While that effort did deliver a first class terminal, that facility has for nearly a decade sat fallow and virtually unused, as the airport has yet to host any commercial airlines, although corporate jets and other private pilots did land at the Million Air corporate aviation facility, for which Spencer was the franchisee, from 2010 until 2012.  Another $210 million was invested in airport facilities, which have gone largely unused over the last decade.
In March 2013, Spencer was arrested by the FBI and charged with engaging in a conspiracy to steal $1.75 million in public funds, a gambit which ultimately netted him $1.03 million, according to the U.S. Attorney’s Office. Attending the arrest were suggestions that Spencer had kicked back payments to various San Bernardino International Airport Authority officials. No arrests of any local officials were made, however, and no charges were filed against them. In March 2018, Spencer pleaded guilty to a tax evasion charge, and the remainder of the case against him was dismissed.
Some minor progress at the airport over the years has been achieved. Beginning in 2016, UPS began operating four weekly flights at the airport during the run-up to Christmas and in the years since that UPS Airlines has expanded its operation at the aerodrome. In July 2018 San Bernardino International Airport Authority and FedEx Express have agreed to begin regularly-scheduled air cargo flights into San Bernardino International Airport
Given the airport’s poor track record, San Bernardino International Airport Authority officials, including the board and current Executive Director Mike Burrows, are anxious to achieve milestones in converting the airport into a regional economic engine.
Hillwood’s Eastgate project, variously referred to as the Eastgate Logistics Center and the Eastgate Air Cargo Facility, which is to occupy 101 acres west of Victoria Avenue and south of Third Street, represents that first major milestone, airport officials insist.
Those with an interest in the project coming to fruition have banded together under a consortium dubbed AllianceCalifornia. According to the consortium, “AllianceCalifornia is committed to finding a tenant for Eastgate that offers [its employees] robust benefits, including medical, dental, vision, paid leave, and other financial assistance.”
The statement referenced one of the controversial aspects of the project, which consists of Hillwood’s reluctance to identify the tenant, or tenants, that will occupy the cargo center. There has been significant speculation the tenant is Amazon, the on-line marketing giant, but there has been no confirmation of that. According to AllianceCalifornia, “The average wage of the jobs created at Eastgate is projected at $26 per hour and will include new aviation-specific occupations.”
At the December 30 special session of the San Bernardino International Airport Authority Board held at the Norton Regional Event Center to consider the approval of the final and binding draft of the ground lease agreement as the sole item on the board’s agenda that day, an overflow crowd was on hand. The vast majority of those in the audience seemed to be strongly in favor of the arrangement between the San Bernardino International Airport Authority and Hillwood Enterprises. In addition to Hillwood personnel, financiers and investors with a stake in the outcome and public officials, there were significant numbers of construction union members who stand to benefit from the short term employment opportunities the project will result in. The Highland Chamber of Commerce also had a contingent of its members present who were vocal in their support of the project.
Hillwood Senior Vice President John Magness said Eastgate will link San Bernardino with commerce centers across the globe.
“This facility will see freight and people and commerce coming from around the world,” Magness told commissioners. “It’s an exciting time to see that come to the region.”
Not everyone was as enthusiastic about the prospect of the project, and during the more than two-hour hearing/meeting many clamored to offer their perspectives. Because several of those present perceived that they were not going to be allowed to weigh in with regard to the project before the vote took place, several of those in the audience attempted to speak over the citizens who had signed up for public comment. Airport officials chided them for doing so, and threatened to clear the room if order was not maintained.
Members of the Center for Community Action and Environmental Justice expressed opposition to the project, stating the economic benefits of the project were slim at best, given the low wages in the warehouse and logistics industries, such that the financial trade-off in terms of financial gain vs. environmental damage was a decidedly negative one. There were others who conceded that the project did offer some progress forward in terms of jobs creation, but they suggested the authority was not being exacting enough in terms of forcing Hillwood and its eventual tenant(s) to incorporate more favorable elements into the project. Some called upon the authority to include a “community benefits agreement” into the project approval that would require Hillwood or its tenants to provide funding and support to educational and social programs in the community.
Tom Dolan, executive director of Inland Congregations United for Change, said the citizens he represents are not seeking to block the project and have reconciled themselves to the reality that large numbers of warehouses are being built in the Inland Empire. At the same time, he said, it was incumbent upon public officials such as those on the airport authority board to impose conditions on the development of that warehousing to offset its impacts. “As residents of San Bernardino, we’re seeing and feeling the impact on our health and on our families,  and every year it gets worse and worse,” Dolan said. “We have to fight, and demand our public leaders represent the community.”
Dolan characterized as “disgraceful” that the region’s elected leadership “won’t attempt to work for community benefits. They are walking away from their responsibilities as elected leaders when they sell out in the face of this.”
Mike Burrows, speaking as the San Bernardino International Airport Authority’s executive director, insisted that the authority was legally precluded from imposing a community benefits agreement on any entity engaging in development of the former Air Force base.
The meeting was not without its political import.
Dawn Rowe is on the airport authority board as a consequence of her role as Third District San Bernardino County supervisor. The airport lies within the county’s Third District. Rowe was not elected to the board, but rather appointed in 2018 after former Third District Supervisor James Ramos resigned the position with two years left on his term after being elected to the California Assembly. As a supporter of the project, Rowe drew the verbal fire of two of the candidates who are running against her in the upcoming March 3 election.
One of those, Karen Ickes, said she was opposed to the project. Another candidate in the Third District race,  Redlands City Councilman Eddie Tejeda, said information crucial to the public’s understanding of the deal that was cut with Hillwood was being withheld. “There is a lot of missing information” from the lease documents that were being voted upon, Tejada said.
The San Bernardino International Airport Authority Board, swayed by Hillwood Senior Vice President John Magness’s assertion that “Sustainability and job creation are at the core of Hillwood’s values,” and that the Eastgate project embodied “the economic potential for environmentally responsible air cargo facilities at AllianceCalifornia,” voted unanimously to approve the ground lease project.
-Mark Gutglueck