Sunday, December 18, 2016

City Could Evict Airport Tenants and Close Operations, In Spite of the Federal Government: New Jet Service Doesn't Change The Fact That Santa Monica Airport is a Billionaire's Club

Row of biplanes 'Air Service USA World Flight' for the 'Round the World Flight" at Cloverfield airport, 1924. The Santa Monica airport has served its purpose, and today serves only the rich.

By Jonathan Stein, Attorney

For the second time since Santa Monica Airport was set to close in July 2015, a brand new jet service is setting up new scheduled services.

Jet flight operations are up 15% since July 2015, when all jet tenants agreed explicitly in writing to leave – the "surrender clauses" in their leases. 15 jets owned by a billionaire and others have paid no rent for one year and have not been asked to leave.

The City Council and City staff are on the side of residents and have taken two actions that are "symbolic", but do little to change the steeply increasing number of jet flight operations. We are thankful they are on our side, but how bumbling of them. 18 months have passed, they have done almost nothing in the face of ruthless and aggressive actions by jet flight operators. Residents get symbolism, but billionaires with jets get what they want. The City Councilpersons are not stupid, they know what they are doing.

First, the August 23, 2016 adoption of a closure resolution seeks to close the Airport by December 31, 2018. Unfortunately, this symbolic act has not been followed by any concrete action. The Aug 23 resolution also sets up a City "fixed base operation" to replace Atlantic. But this goes slowly and residents pleas to "surge" staff are ignored. I personally authored most of the language in the Closure resolution and the City FBO policy, so I support it. But again, it is only symbolic without follow-up.

And second, slated to go out next week, is City's "Notice of Abandonment", that would take the Western Parcel out of airport use, to dedicate to a park. Ben Wang, head of , was the main author and we applaud him, and the City Council for authorizing it. This would shorten the runway by 1800 feet, rendering impossible operation of most jets. But the FAA may approve or disapprove of runway changes, so again this is "symbolic". Again no concrete action

In the meanwhile, the FAA has issued a "cease and desist order", a meaningless legal hoax aimed to stop the City from evicting Atlantic Aviation, the originator of 90% of the jet operations at the City. The order covers only one City action – evicting Atlantic Aviation, and nothing else. So all of the steps below might proceed without violating the FAA order. But if the City violates the order, two things would happen.

First, the City would lose future Airport funding, this is for sure. The City should "acquiesce" in this loss of funding, who cares.

And second, the FAA might seek a federal injunction against eviction of Atlantic Aviation, this is a 50-50 chance (as most FAA senior officials are leaving before Trump's draconian 5-year ban on federal lobbying goes into effect). The Dept of Justice has to agree that an injunction is meritorious, which it is not.

Why would we win an injunction fight?? Four reasons, any one of which is over 75% likely to prevail. Atlantic Aviation agreed explicitly in writing leave. The FAA's only penalty is loss of AIP funding, to which the City "acquiesces". The grant assurances upon which the order depends ended in 2014. The City is setting up its own FBO. Any one of those arguments is a winner, we have four.

But without violating the FAA order, there are many things to do to decrease jet flight operations, increase Airport revenues in the long run, and prepare for transition of the Airport into a park with a limited number of Silicon Beach businesses embedded to fund park construction.

First, the City should close for environmental remediation and renovation Santa Monica Air Center and all City hangars (there are six large sets already under City control). Any tenant refusing to go should be evicted, aviation and non-aviation alike, and be sued for monetary damages. In the long run, these structures can be rented for far more money than they are bringing in now. The City has 100% right to close down buildings for environmental remediation and renovation.

Second, the City should lease now all Atlantic Aviation and American Flyers hangars and offices and tarmac to Snap, Inc. (other than a few necessary to provide City FBO services). Snap, Inc has indicate it will take them. There would be a clause in the lease requiring the City to evict Atlantic, and no damages would accrue to the City if this took some time. If Snap won't sign this lease, then who among you will join me in forming a company to do the same thing?? I'll seed it with some savings, and maybe some of you will too, not much is required. We will then assign the same lease to Snap after some legal actions, and make a little money.

Third, the City should immediately take out of airport use the Western Parcel except the runway. No FAA approval is required to do this. But all aviation and non-aviation tenants could be evicted (or approved) and at least one building should be demolished to provide more parkland. This one action would provide about 36 acres of park, triple the recent addition of 12 acres.

Fourth, the City should seek monetary damages from all aviation lessees which promised to leave, but did not. These are "surrender clauses" in expired lease agreements that may be enforced now, with attorney's fees clauses to provide punch. Given the City's $3 million legal bill since July 2015, this is a powerful hammer to force out aviation tenants who explicitly agreed to leave 18 months ago!! If the City loses to the FAA in other legal actions, it would simply dismiss these lawsuits – no big deal.

And fifth, the City should limit the number of aircraft resident at the Airport to 100, on a first come, first serve basis. A "wait list" would form for the other 153 aircraft currently resident at the Airport. The City is 100% within its rights to leave the runway open, but limit resident aircraft as well as areas where they can park.

Jonathan Stein
Attorney, Century City



Anonymous said...

Jonathan Stein's article made me vomit a little in my mouth. This guy has it all wrong. I'll bet he owns real estate near the airport. Hey Mr. Stein, happy Hanukkah you creep.

Anonymous said...

A quick search reveals that J. Stein is also a Casino and real estate developer. Looks like he lobbies the local city council on behalf of anti-airport groups. This is a land grab plain and simple.