Santa Monica Airport analysis shows rosy economics

Tuesday’s presentation represents the culmination of the first phase in a three-part process that the City Council launched in late February with the purpose of taking a hard look at airport operations in order to make educated decisions about the fate of the space in 2015, when officials believe they will have more control over what occurs on aviation land at the airport.

The City Council gave the green light for three companies — HR&A Advisors, Inc., the RAND Corporation and Point C Partners — to move ahead with work looking at the economic impact of the airport in terms of job and revenue generation, land use and the opinions of community members regarding the future of SMO.

The charge comes against the backdrop of decades of controversy revolving around the airport, its neighbors, and ultimately a struggle between the Federal Aviation Administration and City Hall for control of the property.

City officials hope to use the information as part of a visioning process for the property, which will determine how the uses of non-aviation property will evolve and, potentially, how activities of the airport itself can be changed.

At present, City Hall has total authority over 40 acres of non-aviation land, which houses restaurants, an antique market and a large concentration of art galleries and work spaces.

The remaining 187 acres has nearly 400 aircraft and aviation service providers, and is largely under the control of the FAA per the terms of an operations agreement signed by city officials in 1984.

That agreement, and the leases to aviation-related businesses on airport property, expires in 2015, which opens up a three distinct possibilities, said Martin Pastucha, director of Public Works, the department that recently took over responsibility for airport operations.

“Then the question is what happens after that,” he said. “If you continue on the road that the 1984 agreement laid out, or operate with no restrictions. “

A third option would be the closure of the airport itself.

According to HR&A, the airport campus has 177 aviation and non-aviation businesses spread across 42 different industry sectors that support 1,487 full- and part-time jobs. For every direct job, an additional 1.66 jobs are created within the economy in terms of support services, according to the analysis.

The annual operation of the airport generates a total economic output of $275.2 million in the local economy, including $187.5 million in annual tenant sales, government expenditures and visitor spending at city businesses.

“Stated another way, the sale of direct economic activity at the airport [$187.5 million] is equivalent to the direct economic output generated by 1,855 average-price hotel rooms, or 1.2 million square feet of general retail or 350,000 square feet of commercial office space,” the report reads.

In the 2010-11 fiscal year, the airport managed that with no general fund subsidy, said Susan Cline, assistant director of Public Works.

The RAND Corporation looked forward from what is present to what could be at the campus, focusing primarily on non-aviation land.

Its recommendations looked at modernizing facilities, improving road access, increasing the number of “neighbor-friendly” uses like restaurants and making the airport campus the home of sustainability measures and business development.

Only one of the suggestions reflects on the airport itself — hosting an Emergency Communications and Control Center that would act as a regional hub for emergency services in West Los Angeles.

The analysis didn’t satisfy Cathy Larson, the co-chair of the Friends of Sunset Park Airport Committee.

Resident objections to the airport are based largely on health and safety concerns, which got a boost from an August accident where a student pilot crashed into a home in the Sunset Park neighborhood.

“We were hoping that they would have come up with alternatives to address the main concerns of the community regarding the airport, meaning the noise impacts, emissions impacts and safety impacts,” she said. “When you look at the points under the RAND study, none of them address that.”

The report also doesn’t look at airport closure in any detailed way, instead focusing on the difficult legal battle that would inevitably await if City Hall decided to curtail or cease aviation-related activities on the site.

According to the staff report, the FAA holds that City Hall has an obligation to operate the airport in perpetuity, or at least until 2023.

That date marks 20 years from the last time City Hall accepted money from the federal government for the airport, FAA officials hold. Under federal law, airports must stay open for 20 years after the last time a municipality accepts money from the federal government for airport improvements.

City Hall, on the other hand, maintains that the 2023 date refers to a payment received for projects begun in 1994, and that the drop-dead date should reference when the projects got underway.

The power struggle between City Hall and the FAA has led to clashes over the decades, most recently an unsuccessful eight-year court battle over a jet ban which cost over $1.5 million in attorneys’ fees alone.

“It is crystal clear that, if the city attempts to close the airport, the FAA will not hesitate to aggressively fight against the closure in the courts,” reads the staff report. “Such a fight would go on for years; and, at best for the city, the outcome would be highly uncertain.”

With that laid out, it appeared to some community members that the remainder of the report, and even how some of the research was conducted, was slanted in favor of keeping the airport open and even convincing people that SMO was an asset rather than a liability, Larson said.

Point C Partners conducted approximately 130 interviews either in person or over the phone with community members and stakeholders, but closure of the airport wasn’t on the table. Several residents have reported that they felt that the questions were biased.

“That’s the most disappointing thing that I see in the staff report at this time,” Larson said. “They’re just trying to spin the airport as great for the community, and I don’t see it that way.”

At Tuesday’s meeting, the City Council will have the opportunity to review the information and either approve staff to move forward with the second phase of the process — extensive focus groups with community stakeholders — or go back to the drawing board to get additional information.

Larson hopes it’s the latter.

“There’s a high probability that at the end of the discussion period, the council will address staff either to go on to the next phase or realize that there’s something lacking in this study phase,” Larson said. “They might ask staff to do additional work to look at options and do some of the things that were not addressed in the preliminary phase.”