Los Angeles World Airports' governing board has approved a resolution establishing the guidelines for the potential sale of LA/Ontario International Airport to the city of Ontario.
The Board of Airport Commissioners agreed Monday to negotiate a letter of intent between the agency and the Ontario International Airport Authority establishing terms that would result in LAWA divesting of Ontario Airport . The commission is asking that the deadline for the letter be no later than April 1.
The resolution includes ensuring that LAWA would not be financially responsible, it remains a commercial service airport, and reducing any impact the sale could have on city employees. It also requests that the commissioners receive monthly updates on the process.
"The guiding concepts and principles are an initial road map for the terms of divesting ONT," said Gina Marie Lindsey, LAWA's executive director. "It's a solid place to start."
And if the city of Los Angeles can agree on terms, it could the first of its kind to seek approval from the Federal Aviation Administration, said Steven Martin, the chief operating officer for LAWA.
"We developed information based on transactions done largely outside of the U.S.," he said.
Martin also cautioned the commission that it is setting up these guidelines so that if the airport is sold, it does not result in "falling into less than ideal financial condition." The goal is that the airport be operated so that it is self-sustaining and that LAWA is not "called on to bail it out."
He was referring to the original transaction between the two cities, when Ontario could no longer afford to maintain the runways and opted to bring in Los Angeles to operate the facility.
If a sale were to occur, Martin told the commissioners that it would mostly likely be a lengthy process starting first with the letter of intent, which would also need the approval of the Los Angeles City Council. From there, all the documents would have to be approved by the Federal Aviation Administration. Martin warned it could be the hardest hurdle and lengthiest part of the process.
The remaining steps would be to ensure the Ontario International Airport Authority can fulfill its financial obligations and then close the sale, Martin said.
LAWA's governing body, to date, has not endorsed any sale of Ontario Airport. Rather, it is following the recommendations of the city administrative officer and City Council, which commissioner Fernando Torres-Gil made known.
"This wasn't anything we initialized or wanted. Circumstances put us in this situation," he said.
Michael Lawson, president of the commission, reinforced that Ontario Airport is an asset of Los Angeles and that it was imperative the governing body negotiate in the best interest of the citizens.
In late September, Miguel Santana, Los Angeles' City Administrative Officer, urged L.A. and Ontario officials to begin negotiations.
Since Santana's recommendation, LAWA has been forthcoming about discussing negotiations with Ontario officials.
Ontario officials have been attempting to regain control of the facility from LAWA for four years, saying the agency has not done enough to stop declining passenger traffic .
On Monday afternoon, Ontario City Councilman Alan Wapner said he agreed with what was outlined, adding it is exactly what Santana recommended in his report earlier this year.
But Wapner, who is also president of the authority, said Ontario has been operating as a self-sustaining airport and nothing would change under their ownership.
"It certainly can't be managed any worse than it's been managed in the past," he said referring to declining traffic ridership, the levels of which have not been seen in two decades.
In addition, the authority, which is backed by the city of Ontario and San Bernardino County, has the fiduciary means of handling the airport, Wapner said. He notes it's not Ontario that has a $250 million deficit, water mains breaking on a daily basis or allow city assets to fall into disrepair, he said.
But Wapner does question the April 1 deadline set for the letter of intent, which would be considered the first step in the potential sale. By then, a new mayor and council members will be elected, and there could possibly be new commissioners as well.
"You're saying you're going to start all over again," Wapner said. "Who knows by saying April 1, they might as well be saying 2014."
While negotiations are ongoing, Wapner said they are not moving as quickly as he would like. He hopes in the new year the two sides will meet more frequently because the goal was to complete a deal before the calendar year, and the latest before the elections in March.
"If we don't meet the March deadline, I'm going to run out of patience I can't wait four years to get here again," he said.
Ontario Airport sale conditions
The letter of intent from Los Angeles World Airports will aim to address the following issues:
Obligations for continuing use of property as a commercial service airport.
Prohibitions on operating restrictions after sale.
Minimum requirements for purchaser as responsible owner and operator of Ontario International Airport.
Down payment and closing compensation to LAWA upon closing of sale.
Opportunities and protections for city employees at Ontario.
Funding for city employee transition costs borne by LAWA and the city.
Reimbursement of LAWA costs incurred to facilitate a potential sale process.
Process for airline and other aviation stakeholder consultation.
Role of LAWA, if any, in providing transitional management service to the Ontario International Airport Authority after closing.
Inventory of required approvals (including FAA approval) and a schedule for gaining such approvals; and closing conditions to be met to complete sale after gaining required approvals.