L.A. transfers ownership of airport to Ontario
After five years of litigation and strenuous negotiations, the City of Los Angeles transferred on Aug. 6 ownership of the Ontario International Airport to the city of Ontario during an official ceremony held at the airport’s Terminal 4.
Under the watch of dozens of local legislative leaders, entrepreneurs and activists, Los Angeles Mayor Eric Garcetti transferred the property to a local agency as part of a $250 million agreement.
Invoking a William Mulholland speech during the inauguration of the Los Angeles Aqueduct in 1913, where he said, “There it is (the water), take it,” Garcetti said, “Well Inland Empire, here it is, take it,” referring to the airport.
The terms will be finalized during the next two months, but eventually the City of Ontario will pay $40 million of its reserves, take over the debts totaling $60 million and pay $150 million during a 10-year span from the date of the transfer.
“That number is fair and represents the investment Los Angeles has made into this airport, passenger fees from LAX that have paid for things here. The deal will ensure Ontario has the tools and the cash flow it needs to successfully operate this airport,” said Garcetti. “We were not interested in a deal that said 'Here is the airport.' We want and needed it to succeed."
Alan Wapner, a member of the Ontario City Council and member of the negotiation team, said the new agency (to be comprised of local businessmen from various counties, including San Bernardino, Riverside and Orange) is responsible for approving improvements at the facilities for the comfort of millions of passengers.
Wapner said the transfer was a historic event and a long-awaited day. In fact, local authorities began fighting the transfer since Los Angeles took over the airport back in 1967. Wapner stressed that very little money will come from the city’s budget and that instead the airport will pay itself.
In order to succeed, the agency would have to promote the airport to domestic and international airlines alike, he said.
Under the agreement, the current employees at the airport will not have to worry, said Garcetti, who showed some support for the transfer since early in his administration. At first, Garcetti agreed to transfer the airport back to local control with the condition to receive back $276 million that was invested in the construction of two terminals that opened in 1998.
In December of 2010, the City Council of Ontario passed a resolution directing the administration to do whatever necessary to take back control of the airport. Two years later, Ontario offered a bid of $250 million to Los Angeles; however, L.A. refused and instead asked for $474 million. A lawsuit was eventually filed in 2013, with the two sides scheduled to meet in court on Aug. 17.
“Instead of suing each other in court, we are here celebrating. Instead of fighting with one another, we are planning our future,” said Garcetti, who praised Sen. Dianne Feinstein for keeping both parties focused and on the same page.
Garcetti added that the seven million residents who live in the three counties of San Bernardino, Riverside and Orange should not have to travel to Los Angeles to catch a flight. The mayor said that when Ontario is successful, the whole region is successful because it decreases traffic on Los Angeles freeways and highways, thereby reducing the number of vehicle accidents.
Denny Schneider, president of the Alliance for a Regional Solution to Airport Congestion, applauded the transfer and added it would be a tremendous regional economic boom.
“People living close to the Ontario airport will use it, reducing traffic congestion and taking pressure off expanding LAX. We look forward to working with all parties to make the transfer a success,” said Schneider.
The news was also welcomed by Michael Krouse, president and CEO of Greater Ontario Convention and Visitors Bureau. Krouse said that the transfer would drastically benefit the local tourism sector, benefiting hotels and restaurants alike.
“The anticipated improvements to efficiently market and increase traffic to Ontario International Airport under the new leadership will be extremely important to our hospitality and tourism industry. This is an important part of the puzzle, and as we prepare to open the California Welcome Center at Ontario Mills in the spring of 2016, we will have all the pieces to build a dynamic marketing piece to continue our efforts to bring national and international visitors to our destination,” said Krouse.
Travel and tourism is one of America’s largest industries, generating $2.1 trillion in economic output in 2014, with $927.9 billion spent directly by domestic and international travelers, said Krouse.
Locally, tourism created one of every five jobs in 2013. Last year, in Ontario and Rancho Cucamonga there were 1,251 new jobs, or 17.6 percent of all new jobs, attributed to growth in the hotel industry.
Rep. Norma Torres, who represents the 35th District, welcomed the transfer and urged leaders to start negotiating with airlines to benefit passengers. Torres, who often travels to Washington, D.C. roundtrip from Ontario, despite the time lost between flights, hopes to soon fly at a cheaper price.
The difference between prices at the two airports could reach $200 or more per ticket when traveling from Ontario, depending on the airline. That, said Torres, motivates many to fly from LAX.
“When I talked to Garcetti early into his administration, he told me that it was a matter of time. It was a big struggle but that does not end today; today begins a great effort the whole community needs to support,” said Torres.
She said that one of the issues airlines face is that travelers are not buying first-class seats due to high prices, something she hopes would change.
Assemblymember Cheryl Brown said the transfer means more jobs becoming available for area resident.
Assemblymember Freddie Rodriguez said the new management should promote the airport to international airlines, including those from Mexico.
“There is tremendous potential, but we need the community’s support,” he said.
The San Bernardino County Board of Supervisors, which for years supported the idea of transferring control to local authorities, also applauded the decision.
Janice Rutherford, the 2nd District supervisor, said the challenge now is to make the airport thrive to benefit the local economy.
"The airline industry has changed dramatically since the Great Recession and we now have to find and market ONT's competitive advantage in this new market," said Rutherford.
Source: Alejandro Cano, Fontana Herald News