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Santa Monica Airport Agreement Clears Runway of Mounting Litigation Costs  

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Convention and Visitors Bureau Santa Monica

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Harding, Larmore
Kutcher & Kozal, LLP

By Niki Cervantes
Staff Writer

January 31, 2017 – The pact announced Saturday to close Santa Monica Airport by 2029 did more than cap decades of fighting with the federal government: It also halts litigation costs to the City that soared into multi-millions of dollars – with no end in sight, City officials said Monday.

Since October 31, 2013, the City has been fighting the Federal Aviation Administration (FAA) in court over title to the airport property and has been embroiled in lawsuits over its landing fees and tenant evictions. (see Santa Monica Airport Litigation)

City officials did not provide a specific breakdown of the litigation costs stemming from its decades-long effort to close SMO, but City Council members say it was already high and rising.

“All I know is that we have spent millions of dollars trying to close the airport and that it is very likely that, in the future, the legal and other expenses would be in the millions,” said Council Member Gleam Davis, one of four on the seven-member council to vote for the compromise with the FAA.

Nonetheless, Davis and other council members said cost was not a factor in deciding to agree to the pact ("City, FAA Agree to Close Santa Monica Airport in 2028," January 28, 2017).

Davis, who is a corporate lawyer, said “cost was not much of a factor in my vote.”

“I gladly would spend millions more if I were certain that the end result of litigation and conflict would be closure of the airport,” she said. “No knowledgeable person with whom I spoke could make that guarantee.”

Council Member Terry O’Day also said the price tag in the war over closing SMO thus far “runs into the millions,” but that money neither influenced his, nor any council member’s, vote on the agreement.

“As a council, we never shrank from our fight for control of the airport due to cost of litigation, “ O’Day said. “But it is certainly a benefit that we can now redirect the millions of dollars in litigation to other uses in our community, including planning parkland to replace the airport.”

Aside from the length of time involved in the battle to shut down the century old airport and the swarm of lawsuits that resulted, other factors were likely to increase the price tag.

For instance, compensation costs for the City Attorney’s Office in Santa Monica are among the highest in California. The City also hired outside counsel to assist.

In 2013, the City retained the law firm of Morrison and Foerster to help take on the FAA, paying a “blended” rate of $575 an hour. Billing rates for senior partners were then about $900 hourly.

In 2008, the City paid its then-largest legal bill in history -- $55 million -- to attorneys who assisted in a water contamination lawsuit.

The settlement resolved all outstanding and potential claims and disputes with a dozen attorneys who assisted in a case filed by the City in 2000 against major oil companies that contaminated the City’s wells with a gasoline additive ("Santa Monica Agrees to Pay Record $55 Million in Legal Fees," Mach 13, 2008).

Saturday’s landmark pact between the FAA and City closes the airport on December 31, 2028, and concludes the numerous court cases between them.

Jet traffic is expected to slow and commercial flights will be grounded immediately by reducing the length of the runway to 3,500 feet. The consent decree acknowledges the City’s right to take over Fixed Base Operation of such aviation-support services as selling aviation fuel.

Those services are now handled by two private companies at SMO – Atlantic Aviation and American Flyers – who went to court to stop the City from evicting them as part of the takeover.

Under the decree, however, the FAA also agrees to defend the settlement against any third-party challenges. Additionally, the FAA releases all airport property from deed restrictions.

Council Members O’Day, Davis, Pam O’Connor and Mayor Ted Winterer voted for the agreement. The remaining council members, Kevin McKeown, Sue Himmelrich and Tony Vazquez, opposed it.

SMO opened around 1917 as a grassy landing strip for biplanes in the first World War. It flourished in coming years as a testing site by Donald Douglas for military and other aircraft and was used in the World War II effort. But the City has long talked of using the 227-acre site for parkland.

The City Council voted in 1981 to close the airport, but agreed three years later to keep it operating in return for more local control of problems such as noise.

The fight was renewed after the agreement expired and the FAA said the City had broken the pact by accepting federal money for airport improvements. In August, the current council voted to shutter SMO by 2018, if legally possible ("Santa Monica Council Votes for 2018 Airport Closure," August 25, 2016).

Some critics of the council said the vote was big talk meant to sway voters in the November 8 election, when Winterer, O’Day, Vazquez and Davis faced re-election. They won easily.

The council wants to transform the acreage into a "Great Park," a Westside version of San Francisco's Golden Gate Park or New York City's Central Park ("Santa Monica Airport Park Expansion Moving Forward," September 27, 2016).

SMO, the oldest airport in Los Angeles County, is regarded by the aeronautics industry as a valuable air traffic reliever for busy Los Angeles International Airport.

Its staunchest opponents, most of whom live on the border of Santa Monica and West Los Angeles near the airport claim the sole airstrip is too close to homes, too loud and generates dangerous amounts of pollution.

The airport caters mostly to leisure pilots and chartered jets for those who afford extremely high prices for short jaunts, although that was about to change with the introduction of a low-cost charter service called JetSuiteX.

The company was due for its first flight out SMO next month, but after the City's agreement with the FAA likely won't get off the ground ("JetSuiteX CEO Says Company’s Commercial Flights at Santa Monica Airport Could Be Canceled," January 30, 2017).

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