By Mark Gutglueck
In December 2015, what had been more than a four-year running battle between the City of Ontario and the City of Los Angeles over the ownership and management of Ontario International drew to a close, with Los Angeles capitulating and agreeing in writing to surrender both the title and operational responsibility for the aerodrome.
Ontario City Councilman Alan Wapner was hailed as not only the prime mover of that victory by which Ontario restored to itself status as the master over its own fate and possessor of what is thought of as its own and the region’s primary economic engine but as the architect of that coup and as someone who had done the heavy lifting by convincing the sophisticated political leadership of one of the world’s major cities that it could not afford a scorched earth war with the much smaller city 37 miles to its east in an adjoining county.
At that point, Wapner had been a member of the city council for more than two decades and was the dean of that panel, having been in office for four more years than the member with the next greatest number of years of seniority, Mayor Paul Leon, who had been appointed to the council four years after Wapner was first elected. Despite Leon’s title and official position wielding the mayor’s gavel and officiating over council meetings, many close to Ontario government perceive Wapner as Ontario’s true leader and the backbone of the community.
Indeed, the airport is Ontario’s proudest and arguably its most valuable asset. In 2012, when the Ontario International Airport Authority was formed in anticipation of Ontario ultimately wresting ownership and control of the airport from the City of Los Angeles and its corporate entity, Los Angeles World Airports, Wapner was chosen to serve as the president of the authority’s board of directors. He has remained in that position ever since.Despite what at the time in the popular conception seemed, particularly to the local citizenry, to be a crucial coup in Ontario coming out from underneath the shadow of the megalopolis to its west, there were questions at the time as to whether what Wapner was bringing about was truly, in all respects, in the best interest of Ontario, its residents, businesses and the Inland Empire of which it is a part or whether Wapner was essentially militating in his own interest and that of those who had come to surround him as part of his political network.
That question still stands.
In 1967, Ontario Airport yet had a sand-flea-infested gravel parking lot and fewer than 200,000 passengers passing through its gates annually. Concerned that the airport was being squandered and that as a municipality which for decades had been vacillating between being a backwater urban setting and a rural and primarily agriculturally-based community, the city council recognized that in order to expand and modernize the airport it would need to obtain leverage with the major airlines that were ignoring the facility, as they had cataloged it as a small regional airport. After opening up a dialogue with Los Angeles city officials, the Ontario City Council in December 1967 ratified a joint operating agreement with the City of Los Angeles to permit the larger city to use its stronger negotiating position with the airlines serving Southern California to induce them to utilize the Ontario facility.
Contained in the agreement was the goal of expanding Ontario Airport into a true international facility, one that would have such a robust upturn in ridership among the airlines landing and departing therefrom that it would become a de facto Los Angeles International Airport East, at which time Los Angeles would inherit the facility and manage it as a benign senior municipal partner with Ontario. In keeping with that intention, Los Angeles used its prestige and advantage to persuade a whole host of airlines to begin flying into and out of Ontario.
By 1969, flights out of Ontario dramatically increased. In short order, Continental Airlines, PSA, United, American Airlines, Hughes Air West, and Delta established routes from Ontario. In the early 1970s, Ontario was in competition with John Wayne Airport in Orange County, which at that time was expanding dramatically. Though a benchmark of 10 million passengers at the airport by 1975 was not achieved, Los Angeles World Airports, the corporate entity running the Los Angeles Municipal Department of Airports, still assiduously promoted Ontario International.
In 1981, a modern, second east-to-west runway was built, necessitating the removal of the old northeast-to-southwest runway.
By the early 1980s Los Angeles had met all the criteria laid out in the 1967 joint powers agreement. The City of Ontario was at that time led by Mayor Robert Ellingwood, who was resistant to the concept of Ontario complying with the terms of the joint powers authority agreement and turning ownership of the airport over to Los Angeles. In 1985, during one of Ellingwood’s brief absences from the city, four members of the Ontario City Council as it was then composed voted to deed Ontario Airport to the City of Los Angeles for no consideration. That transaction was considered a public benefit transfer. With a few notable exceptions, such as Ellingwood, most Ontario officials at that time believed granting Los Angeles possession of the airport to be beneficial, as it would guarantee continued increases in ridership and the expansion/modernization of the facility.
Undeniably, over the four decades from 1967 until 2007, when the number of passengers through the airport’s gates reached 7.2 million, an increase of 3,600 percent, the relationship between Ontario and Los Angeles vis-à-vis the airport could not have been more positive or cordial.
In the fall of 2007, however, there was a massive financial lull when not just Ontario and Los Angeles but all of Southern California, California and the entire nation was first gripped by what would turn out to be a six-year-running economic downturn and lingering recession. Airlines, in an effort to shield themselves from the continuing economic decline, began cutting back on flights, particularly to locations outside heavy population centers. Beginning in 2008 and until early 2014, passenger traffic at Ontario International declined steadily. In 2011, Ontario officials, led by Wapner, initiated a campaign aimed at wresting control and ownership of Ontario International Airport back from Los Angeles. Los Angeles officials, including most prominently then-Los Angeles World Airports Executive Director Gina Marie Lindsey, at first ignored and then began to resist that effort, which grew increasingly strident and uncivil.
Cooler heads, meanwhile, were seeking to restrain Wapner, asserting that he was needlessly antagonizing Los Angeles officials, who in any event did not have the antipathy toward Ontario he was alleging, reminding him that Los Angeles was in a much better position to negotiate with airlines domestically and worldwide than was Ontario. Moreover, it was pointed out, Ontario Mayor Paul Leon and then-Los Angeles Mayor Antonio Villaraigosa had grown up in the same neighborhood and were childhood friends. Leon’s connection to Villaraigosa could be used with far greater effect to negotiate an outcome favorable to Ontario, it was suggested, than Wapner’s more antagonistic approach. Wapner, however, was having none of that. Ontario stepped up its rhetoric, with Wapner in the lead, openly charging that Lindsey had evinced hostility toward the City of Ontario and its airport and was deliberately mismanaging Ontario International operations to raise costs and minimize both revenues and ridership there as part of a plot to increase revenue and gate numbers at Los Angeles International Airport. Lindsey and her staff denied those accusations, pointing out that the airlines were being pushed by their own economic imperatives in the face of the economic slowdown, which had come to be referred to as “the Great Recession.”
In 2013, in the waning days of Anthony Villaraigosa’s tenure as Los Angeles mayor, the City of Ontario, through the Washington, D.C.-based law firm of Sheppard Mullin Richter & Hampton, sued Los Angeles in the neutral forum of Riverside Superior Court, charging Los Angeles and Los Angeles World Airports with willful mismanagement of Ontario Airport, and seeking the return of the aerodrome to the city in which it is located.
Having already raised the campaign of attack against Los Angeles to a fever pitch, Wapner personalized it even further after the lawsuit was underway. The Wapner-directed attacks occurred against a backdrop of jockeying between the two cities over the “value” of the airport, i.e., the amount of money that was to change hands if the airport title were to be handed back to Ontario. Wapner insisted that the airport was a “public benefit asset” and had no “value” as such. He called for Los Angeles to simply deed the airport back at no consideration. Los Angeles, on the other hand, pointed out that over $500 million dollars had been expended on improvements at the facility and that major portions of the funds for those improvements originated from revenue generated at Los Angeles International Airport or at Ontario International Airport while it was in the possession of Los Angeles, as well as from federal grants Los Angeles secured or from bonds issued under the authority of Los Angeles as a public agency.
Despite Wapner’s continuing insistence that the airport had no value, Ontario privately 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 officials, stung by Wapner’s repeated and unrelenting attacks upon them, scoffed at that offer, giving indication they would accept no less than $450 million for the airport and the property on which it sits, which in any case they considered to be a generously charitable counterproposal reflecting a roughly $100 million discount of the cost of the improvements made to the airport during Los Angeles’s 47-year managerial run there.
In August 2015, just as the matter was headed to trial before Riverside Superior Court Judge Gloria Connor Trask, Ontario and Los Angeles forged a tentative settlement, announcing that ownership and management of Ontario International Airport would be returned to the city whose name the aerodrome bears. Mayors Eric Garcetti and Paul Leon disclosed that Ontario was to lay out $150 million for the airport and provide another $60 million to purchase assets technically belonging to Los Angeles World Airports that were in place at Ontario Airport, and which were crucial or indispensable to its operations. In addition, Ontario had agreed to assume the financial responsibility on roughly $60 million in bonded indebtedness Los Angeles had taken on over the years to make improvements at the facility.
In December 2015, Los Angeles and Ontario signed an agreement finalizing the transfer as of November 1, 2016, with Ontario paying Los Angeles $60 million out of its various operating funds and another $30 million taken out of its reserves, and committing to make payments of $50 million over five years and $70 million in the final five years of the ten-year ownership transition. In addition, Ontario absorbed $60 million of the airport’s bond debt. All in all, the deal was represented as a sale of the airport back to Ontario at a price of $270 million.
There was considerable hoopla, self-congratulating and general backslapping among Ontario officials over Ontario’s reclaiming of the airport. Only vaguely acknowledged was that in the previous two years, even as Ontario was badmouthing Los Angeles and suing it, ridership at the airport, which at one point had dwindled to less than 4 million annually, was again beginning to inch up under Los Angeles World Airports’ direction as the economy was making a turnaround. Nor did Ontario officials dwell on how, in the immediate aftermath of the deal giving the city ownership and control of the airport, the number of passengers going through the airfield’s turnstiles actually declined. In January 2016 Ontario saw 934 fewer people pass through the airport’s gates – 312,413 – rather than the 313,347 who had embarked in January 2015.
Over the next four years, as the airport was operated more and more under the official administrative control of Ontario, the ridership numbers at the airport made a steady climb. That, Wapner and many Ontario officials maintained, vindicated them in the city’s effort to recapture control over the airport and the ruthless and outright mean tactics it used in doing so.
With the onset of the COVID-19 crisis that reached the United States in January 2020 and resulted in what was recognized as a pandemic in March 2020, however, everyone was given a demonstration of the degree to which external factors beyond the immediate control of Los Angeles or Ontario or Los Angeles World Airports or the Ontario International Airport Authority impacted ridership. In the face of a global air travel restriction that went into effect on February 2, 2000, public health quarantining and sequestering mandates and stay-at-home orders that were put in place among various states including California in the weeks and months thereafter along with the United States, Canada and Mexico mutually agreeing in March to close their borders to non-essential travel, air travel dropped precipitously.
Whereas Wapner during the latter half of the 2007-to-2013 economic downturn had steadfastly refused to acknowledge that external conditions were impacting the ridership at Ontario International Airport and he continued to assert that Los Angeles and Los Angeles World Airports were mismanaging the airport and its operations, he insisted that the severe drop-off of both flights and passengers into and out of Ontario that occurred during his watch as airport authority board president in 2020 and into 2021 had nothing to do with his oversight of the airport and airport authority. The obvious discrepancy in his stances, positioning and statements before and after Ontario’s reassumption of airport ownership and operational responsibility added further fuel to the general skepticism that had existed among many of those in the Ontario governmental and airport operational loops since shortly after the 2016 transition of airport ownership from Los Angeles to Ontario.
Indeed, serious questions have long existed over actions Wapner and the airport authority’s board members were taking, many of which were steeped in unnecessary secrecy.
That secrecy, both current and former airport officials and city government sources have told the Sentinel, hides highly questionable adjustments or attempted adjustments of policy, ones relating to in some cases tens of millions of public dollars and in other cases extending to hundreds of millions of public dollars that were or narrowly avoided being diverted into private hands, at least some of which were handled through graft-encrusted procedures. At the very least, those involved or once involved in airport operations say, it appears that Wapner and others were seeking to provide investment, land speculation, development or service-provision opportunities to deep-pocketed campaign donors which were not available to others and which in some cases were demonstrably counter to the public interest and the long-term operational needs of the airport itself. In some of those cases, those entities say, it is difficult to believe that Wapner was willing to compromise himself, the airport, airport operations, the airport authority and the city for the amounts of money those political donations entailed, and that it seemed much more likely that Wapner had been provided with money directly in far more substantial amounts from those who stood to gain from the airport authority’s votes and action.
The Sentinel has not been able to confirm that any such under-the-table payments have been made to Wapner.
What is perhaps the biggest anomaly with regard to Wapner’s stewardship of the airport materialized quite early in Ontario’s resumption of its ownership that facility. Roughly one month after the closure of the December 2015 deal between the cities of Los Angeles and Ontario which called for the return of Ontario International Airport to the control of Ontario, Ontario officials convinced Kelly Fredericks, the president and CEO of the Rhode Island Airport Corporation and the de facto executive director of the T.F. Green Airport in Providence, Rhode Island, to guide the city in its transition to ownership and operation of Ontario International and thereafter assume everyday guidance of the airport. Fredericks officially began as Ontario Airport CEO in March 2016, although the operations were initially yet in large measure under the guidance of Los Angeles World Airports [LAWA]. Jess Romo, who had been the executive director at Ontario Airport since 2006, stayed in that position as a functionary of Los Angeles World Airports until just after Fredericks arrived, after which Tim Ihle, a LAWA employee, came eastward to serve as the airport manager for the eight months following Romo’s departure. Ihle remained in that managerial role, as both Fredericks’ and his successor’s primary assistant, until April of 2018.
On November 2, 2016, Ontario took over the entirety of the airport’s operations through its sub-entity, the Ontario International Airport Authority. Though the ownership changed as did some elements and aspects of the airport’s administration, to the eye not much else did. Ontario had no airport division; more than 200 Los Angeles World Airports employees who had been in place in some cases for more than a decade simply stayed in place, and many ultimately accepted the option of applying to become employees of the Ontario International Airport Authority.
Fredericks was in some measure fixated upon transforming the airport into a truly international facility, and had made progress in expanding the number of flights to and from Mexico and establishing Ontario as a destination for Chinese commercial flights, having brokered a deal with a Chinese charter company to fly into the airport.
Almost immediately upon the airport becoming an asset of the City of Ontario, Wapner began pressuring Fredericks to free up the expanse of land bordering the airport, which is considered to be a part of the airport’s footprint by virtue of ownership rights and control. The lion’s share of that property was not being used for what is considered to be strictly-aviation related purposes but rather as a buffer.
Wapner’s colleagues on the board were his fellow Ontario City Councilman Jim Bowman, San Bernardino County Fourth District Supervisor Curt Hagman, former Riverside Mayor Ronald Loveridge and Lucy Dunn. In September of 2017, Julia Gouw would come to occupy the position formerly held by Dunn, and the board composition has remained static ever since. The elected officials on the board as well as their elected colleagues on the city council and board of supervisors, who were the recipients of largesse from developmental interests in terms of funding for their political campaigns, were repeatedly importuned by those individuals and corporations bankrolling their political careers to free up the airport property so they could profiteer by acquiring it and converting it to either commercial or industrial use.
In their effort to please their campaign donors, the Ontario International Airport Authority’s board members seized upon the representation that such development will represent economic growth.
Both Fredericks and Ihle, who were caught up in the crossfire of the requests being made of their political masters, were gripped with a sense of unreality at what they were experiencing. Ontario had barely taken possession of the airport, and immediately thereafter the members of the airport commission, led by Wapner, were militating to ghoul-like dismember the airport property and start selling it off piecemeal. Fredericks understood that the airport served as an economic generator in more ways than one and that peripheral uses to the airport, including ones involving manufacturing and logistics and the distribution of goods to be flown into and out of Ontario would provide revenue and profitability for companies ready to locate in the area of the airport and jobs for those to work in those foundries, factories, warehouses and distribution facilities. Nevertheless, he simultaneously understood that the first function and highest priority of an airport is its continuing aeronautic viability. Just as Los Angeles and Los Angeles World Airports in 1981, in order to fully transition the airport out of its role as a large municipal airport to a medium-sized regional airport had removed the airport’s original northeast-to-southwest runway in favor of its current modern runway, Fredericks knew that at some future date alterations to the airport might need to be made. He had a Bachelor of Science degree in civil engineering from Pennsylvania State University, so he understood the hard physical reality of construction and how important it was to have space not only upon which to construct new facilities but to have staging areas for equipment and material in undertaking those improvements. Giving up land in the near term for a short-term profit could be folly, he recognized. He considered the stampede to develop the property at the airport’s periphery to provide an immediate shot in the arm for Ontario economically a shortsighted stratagem that would ultimately prove detrimental with regard to any future aviation-related expansion at the airport or higher and better use of the property in question that would manifest in the years to come.
The differences between Fredericks and the members of the board he answered to were becoming increasingly evident as Fredericks dragged his feet in finalizing a master plan for the airport that would have included cataloging more than 200 acres in the immediate vicinity of the airport as surplus property to be actuated for sale in relatively short order.
Perceiving Fredericks as an obstructionist, the board as early as April 2017, barely a year after he had been in place as the airport authority’s executive director, began to send signals it was growing terminally disenchanted with his leadership, while simultaneously waiting for him to conform his leadership and management of the airport with the board’s vision. When he did not, an effort to move him out as CEO began. An issue in jettisoning Fredericks was that his contract, a five-year compact, guaranteed him a minimal annual salary of $398,500.
On June 17, 2017 Frederick’s death knell sounded when the authority held a special closed door Saturday session, an almost unheard-of event, in addition to its regularly scheduled meeting earlier that week at which the single, and signal, issue on the agenda to be addressed was Frederick’s performance evaluation.
On July 5, 2017 the board held yet another closed-door session. Emerging from that meeting, Wapner, as the president of the board, put out a prepared statement, announcing that Fredericks would no longer be overseeing the airport, effective immediately.
“Today Kelly J. Fredericks stepped down as the chief executive officer of the Ontario International Authority,” the statement attributed to Wapner said. “Both the commissioners and Kelly acknowledge that their approaches to the direction and management of Ontario International Airport Authority differ and that it would be mutually beneficial to part ways as Ontario International Airport Authority moves to the next phase of the airport’s development.”
What was not publicly announced was the terms by which Fredericks was given his walking papers.
The board and the airport authority abided by the authority’s contract with Fredericks, meaning that the authority would confer upon Fredericks the balance of the amount of money he was due under the contract – the slightly more than 43 months of pay he was due after having been in place as executive director for 16.7 months, totaling $1,437,920.83. Part of Fredericks’ severance agreement was a confidentiality clause, one by which the airport authority, the board and all authority employees were prohibited from speaking ill of Fredericks and he was likewise constrained from making any disclosure of what he had come to learn about the board and the way the airport authority conducted business. All lips were sealed.
“On behalf of the OIAA, I commend Kelly for his leadership in successfully transitioning Ontario International Airport to local control,” Wapner said. “During more than 16 months at the helm, Kelly and his team made significant progress in furthering our mission to make Ontario International Airport one of the most competitive, efficient, innovative and customer-friendly passenger, cargo and business airports in the United States. The airport is a key economic engine for the Inland Empire and Southern California and plays a critical role in meeting the air transportation demands of one of the fastest-growing regions in the country. We thank Kelly for his service and wish him well in his future endeavors.”
Mark Thorpe, who had been the assistant executive director of the airport authority under Fredericks, was elevated to interim executive director. The board, led by Wapner, picked up with Thorpe where it had left off with Fredericks, directing him to finalize the survey of the airport property that could be designated as surplus in anticipation of its sale. At the same time, Wapner signaled to Thorpe that if he played his cards right, the qualifier “interim” would be dropped from his title.
Thorpe, having unexpectedly advanced to the pinnacle of the airport’s management echelon, was overwhelmed by the prospects before him, to say nothing of now finding himself intertwined with Wapner, one of the most aggressive political operators imaginable. He signaled to the board president that he was ready to play ball. He would need some time to come up to speed, fully fit himself into Fredericks’ shoes, he indicated. Once he got his sea legs under him and got caught up simply with the challenge of making sure that the airport was running smoothly on a day-today basis, Thorpe indicated, he would get around to the longer-range planning issues, including seeing what property the airport authority needed to keep and what it could do without.
On his end, Wapner had a good feeling about the 43-year-old well-educated and trained Thorpe, who was experienced enough to take on the job of running the airport but still hungry enough to want to advance, so that he would be willing to follow the board’s directives. Thorpe had jumped right in, and within two months of taking on the interim executive director’s post landed two new carriers, Frontier Airlines and China Airlines. After a mere three months in the interim capacity, Thorpe was promoted, at Wapner’s prompting, to the post of the airport’s executive director.
“Mark has been a valued member of the OIAA team for more than a year, having played an integral role in the transition of Ontario International Airport to local control,” Wapner said in making the announcement. “He understands the commission’s vision for the airport – one that is low-cost, business friendly and customer focused, not to mention innovative and collaborative in its approach with airport tenants and vendors.”
Wapner then readied the public for the anticipated next phase, the selloff of airport property as a means of rejuvenating the local economy.
“Most importantly, Mark is committed to transforming ONT [Ontario International Airport] into a magnet for economic development in the Inland Empire,” Mr. Wapner said.
But when he closely examined the course Wapner and the board wanted the airport to take, Thorpe, like his predecessor, had come to the same conclusion: Selling off the airport property would be a mistake. Once the land was developed and in the hands of private owners and companies, it would be virtually impossible to reclaim for airport use, based upon its value and the building that would take place on it.
For a time, he played along, indeed considered the possibility of having the authority sell off some of the acreage most distant from the airport grounds where actual aeronautical activity is ongoing. But those parcels were insufficient for the uses envisioned by the companies that were interested in making the acquisitions, in particular the ones that were providing so much money to Ontario’s politicians, primarily Wapner.
Thorpe began looking at the prospect of not selling the property, but rather leasing it. A 25-year lease would encumber the property and render it unusable for aviation purposes for a quarter century. That might preclude expansion of the airport, though not indefinitely. If such a lease could be effectuated and timed correctly, the airport and airport authority might have the best of both worlds, generating income off of the airport’s dormant property, yet preserving the possibility of utilizing the property for airport expansion at some designated point decades hence.
Thorpe managed to put Wapner and his board colleagues off longer than Fredericks had, for more than three years after he had succeeded Fredericks, which was more than twice as long as Fredericks had been able to remain as executive director.
Ultimately, however, Wapner had enough of his stalling. Private entities were interested in something approaching 200 acres mostly east of the airport, Wapner said, and it was high time one or more of them had a go at getting it.
Foremost among those was Sares-Regis Group and Lee and Associates. By that point, it was a given among some airport personnel that one or both would soon have the property at the periphery tied up. Momentum was building in their favor, as it was no secret that both companies had been kind to the airport authority’s board president. Beginning in the 1990s, both companies had made an investment in Wapner’s political career.
Documentation obtained by the Sentinel shows that beginning in April of 1998 and running up to the present, Sares-Regis, including principals John Hagestad and Peter Rooney as well as Larry Lukanish, Kenneth Coatsworth, Patrick Russell, Vincent Ciavarella and William Thormahlen, has provided Wapner with at least $123,444 in political donations. Similarly, since December of 1999, Joe McKay, Mike Wolfe and Carol Plowman of Lee & Associates have supplied Wapner with $95,596.07 in campaign funding.
By Spring 2020, Wapner and Thorpe were on a collision course. The tension between the two whenever they were in each other’s presence was palpable. Some airport and airport authority employees knew what the issue was. Others did not. What was clear was that Wapner, who was backed by Hagman and Bowman and to a somewhat lesser degree by Loveridge and Gouw, wasn’t getting what he wanted from Thorpe. More and more, Atif Elkadi, who had come to occupy the assistant executive director’s position that Thorpe had held under Fredericks, was designated, or simply by default came, to deal with Wapner.
On the table was a $101 million offer for the purchase of 198 acres Wapner was now insisting was “surplus” airport property, an offer which had reportedly originated with Sares-Regis/Lee & Associates. There were other overtures from other entities for property at the airport, but those had not come from entities who were as solidly politically wired in with Wapner, and Thorpe did not feel himself under the gun to respond to those as he did to the Sares-Regis/Lee & Associates proposal.
Thrown into the mix was a report that agents of the Chinese Government – communist Chinese capitalists – perceiving that obtaining a substantial piece of the action at Ontario International Airport was in the long-term strategic interest of their nation, were behind a move to purchase all, some or as much of the property in question as could be had. Thus, it was reported, the leadership of the airport authority – the commission and senior staff, were entertaining an offer, involving an undisclosed amount of cash, from a group of “Orange County” investors, with Orange County being a euphemism for Beijing.
By Spring 2020, Wapner and Thorpe were at total loggerheads. The tension between the two whenever they were in each other’s presence was excruciating, to both and anyone else in the room. Elkadi’s role grew. Thorpe receded. He remained in place as the airport authority’s executive director, functioning in the day-to-day role as the chief-executive at the airport, but he avoided, to the degree possible, coming into direct contact with Wapner.
Simultaneously, Thorpe was looking for some practical way to prevent the sale of the roughly 200 acres of airport property on the $101 million terms that Wapner was dictating, including cataloging leasing options.
In good conscience, Thorpe simply could not go along with the $101 million offer for the 198 acres. Remaining within the pressure cooker environment of the Ontario International Airport Authority was for him an increasingly untenable position. He began looking at the possibility of returning to Los Angeles World Airports, where he could perhaps fit in with the administration of Los Angeles International Airport or Van Nuys Airport or maybe overseeing the aviation-related property LAWA oversees in the Palmdale area. Such a move meant that he would need to take a cut – and perhaps a substantial cut – in the $435,388 in total annual compensation he was bringing in as the head staff honcho at Ontario International Airport, but he was convinced it would be worth it, given all considerations.
By Summer 2021, Thorpe was the Ontario International Airport’s chief executive in absentia. Beginning in July, he was no longer in attendance at the Ontario International Airport Authority board meetings, with his second-in-command, Elkadi, filling in for him. While the airport authority’s documents and construction, service provision and vendor contracts continued to be drafted with him being listed as the authority’s chief executive, Elkadi signed virtually all of those on his behalf during that time period.
Meanwhile, there were unmistakable signals that Wapner and the board were looking to pull the plug on him. On August 12, August 26, September 13 and October 28 of 2021, the airport authority board, in closed sessions that were outside the sight and earshot of the public, carried out reviews of Thorpe’s performance.
Thorpe, who was walking on eggshells with Wapner and other members of the board already, got the message. When he learned that the Greater Orlando Aviation Authority Board was looking to fill the chief executive officer position at Orlando International Airport, he applied for the post.
A further subtle hint that Thorpe was on his way out manifested with his absence from the festivities that marked Ontario International Airport’s five years of independence from the City of Los Angeles held at the Ontario Convention Center on November 1, 2021. Several individuals who had shown up for the specific purpose of interacting with Thorpe were disappointed, as he was not present nor included in the program. While it was assumed he would be front-and-center at the event, he was nowhere to be seen. Instead, Assistant Executive Officer Elkadi hosted those who were in attendance, anchoring the commemoration and making the presentations of the featured guests. Awkwardly, no mention of Thorpe was made that evening.
The following month, there was a major breakthrough, one by which Thorpe’s dilemma over the surplus land sale was resolved in his rather than Wapner’s favor. On December 23, 2021, the Ontario International Airport Authority Commission, including Wapner, Bowman, Hagman, Loveridge and Gouw unanimously voted to authorize a development and entitlement agreement that cleared the way for the airport authority to lease for 55 years 198 acres of so-called surplus property at the airport to CanAm Ontario LLC, a venture formed by San Antonio, Texas-based USAA Real Estate Company and McDonald Property Group of Newport Beach, for $625 million.
Under the terms of the agreement, CanAm Ontario made a non-refundable $10 million deposit with the airport authority, after which CanAm Ontario was to be given time to obtain local jurisdictional entitlement and environmental approvals to construct buildings and improvements on the property. In the first five years, CanAm Ontario is to pay the airport authority $25 million per year and in the second five years, $30 million per year, such that at the end of the first ten years, the airport authority will have received $275 million. Over the remaining 35 years of the lease, CanAm will pay the authority an average of $10 million per year.
The fulfillment of the deal is contingent on the property, located east of Haven Avenue, north of Jurupa Avenue, south of Airport Drive and west of Carnegie Avenue, being converted for development consistent with CanAm’s plans for it, which is not anticipated to be a problem since the City of Ontario has land use authority on the property. One potential catch is the property is habitat for the burrowing owl, which is listed as “a species of special concern” by the California Department of Fish & Wildlife. Ontario officials stated that they were confident clearance for development of the property could be obtained by securing for preservation other land where the burrowing owl nests to provide an ecological offset to any harm that might come to the birds’ habitat.
The substantially greater revenue yield the airport authority is to see from the lease arrangement as opposed to the sale made it virtually impossible for Wapner or the board to reject the deal with CanAm Ontario. The $625 million to be collected by the authority over the 55-year life of the lease, not allowing for inflation factors over the next five-and-a-half decades, represents more than 600 percent of the purchase price that Sares-Regis and Lee & Associates were reported as prepared to pay. Further, the authority is to collect $100 million in the first four years, just shy of the $101 million purchase offer.
In publicly announcing the deal, Wapner hailed the lease as a good deal.
“We are pleased and proud to move forward with the first of several major real estate transactions to monetize vacant property since the airport was transferred to local control in November 2016,” Wapner said. “As envisioned in the Ontario International Airport Authority strategic business plan, the ongoing revenue stream will help Ontario Airport fund vital safety, security and infrastructure projects while keeping airport costs to airlines low. As a result, Ontario Airport will become even more attractive for airlines to inaugurate and increase flight schedules.”
For its part, CanAm Ontario put out that its acquisition of the property would allow it to convert it to what is to be primarily industrial and logistics use in compliance with the City of Ontario’s airport compatibility plan as is required under California law.
While the there was much glad-handing and self-congratulating among the region’s, Ontario’s and the airport authority’s officials and politicians over the deal, this belied the disappointment Wapner felt in not being able to deliver the 198 acres at a bargain basement price to his political backers.
Fredericks and Thorpe had proven instrumental, each in his own time and his own but similar way, in preventing Wapner from exercising to its ultimate conclusion his political and, by extension, his delegative administrative primacy over Ontario’s most strategically significant and financially valuable asset.
As it would turn out, Thorpe was among the final four of the 60 applicants for the Orlando Airport post, along with three other impressive candidates, including two of the brightest elements in the constellation of aircraft facility managers in the country – Seattle-Tacoma International Airport Chief Executive Officer Lance Lyttle and Austin Bergstrom International Airport Chief Executive Officer Jackie Yaft. Ultimately, Thorpe, Lyttle and Yaft were bested by Florida’s then-Secretary of Transportation, Kevin Thibault.
While Thorpe’s head had been on the chopping block and virtually everyone at the highest level among those on the inside at the Ontario International Airport Authority knew it, the public did not.
Earlier this year, on January 18, 2022, when Thorpe, Lyttle, Yaft and Thibault arrived in Orlando to be interviewed the following day by the Greater Orlando Aviation Authority Board, the cat was out of the bag. Three days later, on January 21, the Ontario International Airport Authority announced Thorpe’s departure as chief executive officer, couching it in language to suggest Thorpe was leaving of his own volition and was not being forced out.
“The Ontario International Airport Authority Board of Commissioners has received a letter of resignation from Chief Executive Officer Mark Thorpe, effective March 31,” the authority’s announcement read.
In the announcement, Wapner was quoted as saying, “On behalf of the Ontario International Airport Authority, I commend Mark for his leadership in the revival of Ontario International Airport as a premier aviation gateway since our return to local ownership.”
Wapner then echoed the remarks he had made four-and-a-half-years earlier when he and the board had given Fredericks the heave-ho.
“In his four-plus years as CEO, Mark and his team have helped establish Ontario International Airport as one of the most competitive and customer-friendly passenger and cargo airports in the United States and a major economic engine for the Inland Empire and Southern California. We thank Mark for his service and wish him well in his future endeavors.”
In sending Thorpe out the door and down the road, Wapner and the board conferred upon him a severance package that included, as had been the case with Fredericks, a confidentiality clause that enjoined all parties – Thorpe on one side and the airport authority and all of its officials and employees on the other – from denigrating one another or disclosing anything of any substance relating to Thorpe’s performance or the airport’s/airport authority’s operations.
Last month, the Sentinel inquired with Wapner about reports he had pressured Fredericks and Thorpe, beginning as early as 2016, to sell 198 acres at the airport deemed “surplus property” to Sares-Regis Group and/or Lee and Associates for $101 million. The Sentinel asked Wapner about reports he had ultimately forced Fredericks and Thorpe out of their CEO positions when they resisted him in this effort. Moreover, the Sentinel sought from Wapner a response to claims that he acted to shroud from the public any information relating to the sale overture to either Sares-Regis, Lee & Associates or both by conferring upon Fredericks and Thorpe severance arrangements which precluded them from disclosing anything related to their tenures/departures.
The Sentinel further inquired with Wapner about the largesse provided to him by Peter Rooney and John Hagestad along with other Sares-Regis corporate officers such as Larry Lukanish, Kenneth Coatsworth, Patrick Russell, Vincent Ciavarella and William Thormahlen along with the generosity Lee & Associates’ Joe McKay, Mike Wolfe and Carol Plowman had shown toward him in what some of those close to the administrative echelon of the airport authority say was an effort to get him primed to sell the property.
Referencing the 55-year, $625 million lease arrangement with CanAm Ontario LLC/USAA Real Estate Company/McDonald Property Group for the 198 acres of property at the airport, the Sentinel asked Wapner to comment on the difference between $101 million he was willing to have the airport authority sell the property for and the revenue the airport authority will realize as a consequence of that lease over the next 55 years. The Sentinel asked if the political donations provided to his electioneering fund over the years by Sares-Regis and Lee & Associates had influenced him in his effort to sell the property to either or both of those entities at a price far below what the property is to fetch as a consequence of the lease arrangement and why he had sought to have the airport authority sell the land for less than it is worth. The Sentinel requested from Wapner his response to recurrent reports that the money conveyed to him by Rooney, Hagestad, McKay and Wolfe went beyond the political contributions he had received from them.
The Sentinel inquired whether Wapner had indeed been willing to sell a crucial portion of one of the most important and strategic assets that is key to the inland region’s economic engine – the airport – to investors from a communist country.
The Sentinel asked Wapner to explain why Fredericks and Thorpe are no longer the managing executives at the airport and why it was necessary to buy Fredericks’ and Thorpe’s silence with a substantial severance built into their separation agreements.
The Sentinel sought from Wapner his response to those who say he has proven to be unduly influenced by money provided to him in the form of campaign donations and his reaction to insinuations that he has crossed the line to taking bribes in exchange for official action in his capacity as a member of the city council and as the president of the airport authority’s board of commissioners.
Wapner did not respond.
The Sentinel reached Thorpe who said, “I would like to respond to everything you are asking, but I am bound by the confidentiality clause in my severance agreement with the authority. I must honor that.”
By Mark Gutglueck