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Santa Monica City Council Approves New Airport Leasing Policy
Santa Monica Real Estate Company, Roque and Mark
Roque & Mark Real Estate
2802 Santa Monica Boulevard
Santa Monica, CA 90404
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Pacific Park, Santa Monica Pier

Harding Larmore Kutcher & Kozal, LLP  law firm
Harding, Larmore
Kutcher & Kozal, LLP

Convention and Visitors Bureau Santa Monica

By Niki Cervantes
Staff Writer

March 23, 2016 -- Struggling to regain ground in its long, uphill battle to close the municipal airport, the Santa Monica City Council Tuesday approved a new leasing policy that will make it harder for aviation to continue operating there.

Passed unanimously and with no discussion by the Council, the new leasing rules force the airport’s 626 tenants and sub-tenants -- nearly 200 of whom are in aviation or related uses – to maintain “harmonious relations” with neighbors by protecting their health, safety and environment.

Rents are increased to market rates under the standardized policy - part of a concerted effort by the Council to wean the airport from relying on City coffers and to eventually erase the $13.1 million the airport already owes the City.

Moreover, the policy promotes leases for the arts and education, specifically including the City’s Artist Space Program.

Lease negotiations are handed off to City Manager Rick Cole and any agreement lasting longer than 2018 needs City Council approval, under the policy.

At this point, nearly all tenants at SMO are operating under short-term or month-to-month agreements, although VW Audi has a lease until June 30 of 2018 and the City is in talks with two restaurants, Ruskin Theater and the Museum of Flying for agreements of the same time length.

Tuesday’s 6-to-0 vote by the Council marked the newest of many attempts to control the 227-acre airport site as City leaders battle stiff resistance from the federal government and aviation interests to eventually close the century-old airstrip.

A representative of the aviation industry criticized the new policy as ignoring the City’s legal responsibility to keep SMO as an airport.

“This policy incorporates misconceptions about the (City’s) legal obligations,” said Stacy Howard of the National Business Aviation Association, which has 10,000 members and includes aviators associated with SMO.

Howard also contended the policy discriminates against aviation and gives “unbridled” power to Cole to force out aviators.

The policy also failed to win a voice of support from the City Airport Commission, with some members complaining that their questions about the new rules had gone unanswered.

But most of the nearly 20 speakers who appeared before the Council were on board, as were the considerable number of emails the Council received before the vote.

“Please evict them,” one neighbor who went before the Council said of aviators. “Let’s clear up this mess and get this done.”

Andrew Hoyer, president of Santa Monica Mid-City Neighbors, also said it was time to make progress on shuttering the airport for good, dismissing the facility as no more than “a privilege of the rich.”

And Robert Rigdon, who said he lives under the SMO flight path, said the City needs to take such actions as approving the new policy to clearly spell out its intentions for the airport.

“We need a clear policy that is coherent,” he said, adding that anything short would be “disastrous.”

Some of the emails and other communications to the Council before the vote included talk of the political impact of not imposing the stricter new leasing rules; some even tried to pressure the Council into divulging in advance how they were going to vote.

Up for re-election in November are Mayor Tony Vazquez, Mayor Pro Tem Ted Winterer and fellow Council Members Terry O‘Day and Gleam Davis.

Santa Monica’s airport has been one of the city’s biggest issues for several decades, with neighbors complaining that it operates too close to homes to be safe, generates pollution and greatly reduces the quality of life for neighbors.

The aviation industry considers SMO one of the most vital smaller airports for the region’s increasingly busy skies. During the last five years, SMO has averaged about 100,000 aircraft operations yearly, of which 15,000 are jet aircraft, officials said.

In all, 187 acres are used for aviation and 40 acres for non-aviation purposes, according to City officials.

The City directly leases to 306 tenants at the Airport, including six who are “master” tenants to about 323 subtenants, a staff report to the Council said.

All but one of the master tenants are in aviation-related businesses, including Gunnell Properties, which pulled out of the airport February 29 after failed lease talks with the City. Gunnell’s 78 subtenants must now negotiate directly with the City over their fates.

The rest of the master tenants will be phased out in an effort to give the City greater control over tenants and leases, the report said.

Santa Monica officials have been dealt some harsh blows in the decades they’ve fought to close SMO. It is now arguing before the 9th Circuit Court of Appeals in Pasadena against a 2014 lower-court ruling that dismissed the City’s claim it has control of the airport through the Quiet Title Act ("Fate of City Claim Over Santa Monica Airport in Hands of Appeals Court," March 21, 2016).

Late last year, the FAA also ruled the City must continue operating SMO as an airport until 2023, rejecting the City’s argument that the expiration date to do so has already passed ("FAA Rules Santa Monica Airport Must Stay Open," December 7, 2015).

A group of aviators also sued the City recently for allegedly financially squeezing aviation operators out of the airport ("Santa Monica Sued Over Airport Landing Fees," December 10,2015).

Its best piece of news was the approval of a ballot measure in November 2014 that earmarked development of the airport, if or when it closed, for public parks, recreational facilities or open space. Any other type of development would require voter approval under Measure LC.

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