When it comes to Santa Monica Airport, it’s hurry up and wait

Since becoming involved in Santa Monica politics 20 years ago I always heard, most cheerfully from the late Ken Genser, that the City would close Santa Monica Airport (SMO) in 2015. That’s because the City signed an agreement with the Federal Aviation Administration (FAA) in 1984 that says that the City could do so on July 1, 2015. Unfortunately, that is not going to happen. The City and its rights to its airport land are mired in litigation, litigation that affects what the City Council can do Tuesday night when it will consider the future of the airport land.

While there are various lawsuits swirling around the airport, there are two that crucially prevent the City from closing SMO or even drastically reducing airport operations on July 1. Both suits arise from or are complicated by mistakes the City made in the past 15 years; I say that to explain the predicament, not to cast blame, because it would have been hard at the time the mistakes were made to foresee the consequences.

The first case is the one that the City filed in federal court against the FAA in 2013 seeking “declaratory relief,” meaning that the City asked the court to declare what the City’s rights are to the airport land. Until the City knows what its rights are, specifically under a 1948 agreement with the federal government, it’s hard for the City to make decisions about SMO. The City wants these rights adjudicated in federal court rather than in an FAA administrative proceeding, and that’s why Santa Monica brought the action for declaratory relief.

Although the City has a strong case on the merits, it would be rash to act on the rights it believes it has (i.e., to close SMO) before proving those rights in court. Why? Because the FAA could then turn around and in effect become the plaintiff, bringing an action to enforce its alleged rights under the 1948 agreement in an administrative proceeding, i.e., in its home court. The FAA would undoubtedly be able to obtain an injunction stopping the City from doing anything with respect to SMO until the entire administrative process was resolved.

The City’s mistake with the lawsuit was not to take into account the potential impact of procedural delays. The FAA was able to have the case dismissed on procedural grounds; while that is now under appeal in the Ninth Circuit, that court is so backed up that a decision won’t be handed down until sometime in 2016. Who knows where it will go from there. With the benefit of hindsight, the City should have begun this action four or five years ago.

The second case is based on something that happened in 2003. In that year the City used $250,000 from a 1994 grant from the FAA to improve SMO. As Ken Genser always told me, the City was careful not to accept any money from the FAA after 1994 because the money came with strings—the City had to give “assurances” that it would not close the airport for 20 years, and the City didn’t want to do anything that would affect the 2015 date.

While the City believed that spending 1994 money in 2003 did not extend the 20-year term of the 1994 grant assurances, the FAA disagrees, and has initiated an administrative proceeding saying that the City is obligated to keep the airport open at least until 2023. This action will drag on through the FAA process for several years. While many believe the City’s only penalty would be to pay back the money, again there’s nothing stopping the FAA from seeking an injunction.

The upshot of all of this is that Santa Monica can’t close SMO until these actions are resolved. If the City tried to do so the FAA would probably get an injunction, because it can argue in court that closing the airport is a drastic measure that would cause irreparable harm (to aviation). No judge is going to allow an airport to close while the merits are still being litigated.

So where does this leave us Tuesday night? The staff report for the meeting has some good ideas, notably recommending that City Council instruct staff to initiate a process to turn land on the south side of the airport, which has been used for airplane tie-downs, into parks (beginning to fulfill the promise of Measure LC!), and at least one certifiably bad idea, having an election in 2016 about future uses on the airport land. Mostly, however, the staff report navigates the litigation logjam in a canoe of creative equivocation.

Among those residents who most closely follow the airport issue, the most controversial recommendations involve what to do with the leases of city-owned property at the airport. While there is general agreement, including from staff, that rents must be raised to market rates and that the City must receive rent from subtenants who currently pay their rent to the City’s leaseholders, there are many who believe that all leases at the airport should become month-to-month, hoping that this will hasten closure.

For the reasons discussed above, I don’t believe that making all leases month-to-month will lead to closing the airport any faster. It seems to me that the City can achieve more of its objectives, including increasing rents, by a flexible approach that allows for longer-term leases with appropriate conditions. What those conditions are is something that City Council members will likely grapple with Tuesday night, and which will continue to be an issue as leases are negotiated.

Thanks for reading.

15 thoughts on “When it comes to Santa Monica Airport, it’s hurry up and wait

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  8. Hello Frank – I am not aware of anyone proposing the City close the airport at the current time. Yes, you are correct, to do so now would draw litigation. But again, I haven’t heard that proposed by any knowledgeable and responsible party. So I don’t understand why you are making that counter argument.

    What staff has proposed with the 3-Year leases for only 5 tenants violates our agreements with the FAA and will also draw litigation. So you might want to speak out against that proposal which has actually been proposed. Or John Fairweather’s Mini 1984 Agreement where we give the FAA 3 year leases and the FAA releases to the City 12 acres. The problem with that proposal is that the 12 acres were released in 1984 by the real 1984 Agreement. We appreciate you speaking out on behalf of the community.

    Thank you. Regards, David Goddard, Commissioner, Santa Monica Airport Commission.

    • David — I didn’t say anyone was proposing to close the airport — that part of the column was to explain why no one could do that. But given that fact, I don’t consider the term-of-lease issue as crucial as you do, but nonetheless I believe you are misreading the staff report (which, let’s face it, is not transparent). That the staff talks about specifics of five leases out of hundreds (and those five are balanced b/n aviation and non-aviation) doesn’t mean that the city intends to discriminate against the remaining lessees. What I take from the report is that the city intends to treat each lease as a unique contract, and maintain appropriate flexibility. But I agree, this is an important point. Best, Frank

  9. Frank, I hope you are back from vacation by Tuesday!

    It feels like the idea of extending leases for “3 years with conditions” is a “bet” that adds some additional and unnecessary risks. This unnecessary bet, risks litigation based on the legality of the “conditions”, doesn’t reduce jet operations for another 3 years, doesn’t hold back the mighty AOPA-NBAA from their efforts, and requires the cooperation of the ever-elusive City Staff.

    Everyone else who I have communicated with likes the recommendations of the Airport Commission and the very similar Community Plan which suggests month-to-month leases because it provide maximum flexibility during times of uncertainty. Otherwise, I am glad we are all pretty much 95% on the same page.

    Some of the logic is spelled out here by SPAA (http://www.spaaresidents.org/march-24-council-meeting.html) and here by the Airport Commissioner David Goddard (http://bit.ly/smo-leasing-policy).

    I am interested in hearing your take on the points made by both.

    • Ben — I’ll be back by Tues. For my response, see my response to David G’s comment to my blog. But surely if any actions the city took at this time prevented jets from using the airport, the FAA would act as if that was closing the airport and seek an injunction. –F.

  10. Frank, I have a couple of polite questions for you…

    (1) You say, “For the reasons discussed above, I don’t believe that making all leases month-to-month will lead to closing the airport any faster.” If the objective function isn’t to “close the airport” but rather to “reduce or eliminate jet operations and perhaps more broadly aircraft operations,” do your thoughts change? In other words, would you also say, “For the reasons discussed above, I don’t believe that making all leases month-to-month will lead to ‘reduced operations’ any faster.”

    (2) How would any “appropriate conditions” impact the AOPA or NBAA, who I believe are ultimately the evil empire. The current aviation tenants like Atlantic Aviation are only pawns battling against the welfare of Santa Monica.

    • Ben — sorry it took a bit for your comment to appear, but since this was the first time you posted to the blog, I had to approve it, and I’ve been a way from the computer since about the time I posted the piece. I’m on a little vacation, so I can’t spend a lot of time answering you, but I believe the FBO’s the service the jets will be happy with month-to-month leases so long as they’re operating under the umbrella created by the litigation. As for appropriate conditions — I think we have to take a wait-and-see attitude — this is one area (not the only one) where the staff report is vague. But it does say, tantalizingly, that they believe that conditions can be used w/ respect to the western parcel. Thanks for writing.

      • Frank, I hope you are back from vacation by Tuesday!

        It feels like the idea of extending leases for “3 years with conditions” is a “bet” that adds some additional and unnecessary risks. This unnecessary bet, risks litigation based on the legality of the “conditions”, doesn’t reduce jet operations for another 3 years, doesn’t hold back the mighty AOPA-NBAA from their efforts, and requires the cooperation of the ever-elusive City Staff.

        Everyone else who I have communicated with likes the recommendations of the Airport Commission and the very similar Community Plan which suggests month-to-month leases because it provide maximum flexibility during times of uncertainty. Otherwise, I am glad we are all pretty much 95% on the same page.

        Some of the logic is spelled out here by SPAA (http://www.spaaresidents.org/march-24-council-meeting.html) and here by the Airport Commissioner David Goddard (http://bit.ly/smo-leasing-policy).

        I am interested in hearing your take on the points made by both.

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