Precedent May Be Set by Santa Monica Case

Aviation International News » December 2013
If the city of Santa Monica gets its way, SMO tenants will need to find a new place to alight by mid-2015.
If the city of Santa Monica gets its way, SMO tenants will need to find a new place to alight by mid-2015.
December 1, 2013, 2:05 AM

The city of Santa Monica, Calif., has filed a complaint against the FAA that might finally decide the issue of who has control of its beleaguered airport and also set precedents in legal disputes about airport ownership and control throughout the U.S.

The city filed the complaint on October 31 in the U.S. District Court for the Central District of California. The complaint seeks “to establish the city’s right to control future use of the Santa Monica Airport property,” according to a city statement. “The lawsuit…asks the court to declare that the city holds clear title to the land. It also challenges as unconstitutional the FAA’s claim that the city must continue to operate the airport indefinitely, even after contracts establishing the city’s airport obligations expire.”

The statement adds, “The city has owned and operated the airport since the 1920s. During World War II the city leased it to the federal government for a nominal amount in support of the war effort. During the war, the city and the federal government worked together to expand and improve the airport; and, after the war, when the federal leases expired, the airport was returned to the city through an instrument of transfer. The federal government claims that the instrument of transfer obligates the city to operate the airport ‘in perpetuity’ (forever) or forfeit its ownership interest to the federal government. The city disputes this claim based, in part, on the city’s near 100-year ownership of the airport land, the fact that the airport was merely leased (not sold), and constitutional guarantees that prohibit commandeering property without compensation and forcing local governments to perform the federal government’s work.”

Essentially, the city now believes that it did not relinquish title to the airport when it leased the property to the U.S. government during World War II, when Douglas Aircraft produced thousands of airplanes for the war effort. During its leasehold, the government substantially improved the airport, building the single runway, the control tower and other infrastructure. When it relinquished the leasehold on Aug. 10, 1948, the agreement with the city stipulated not only that the property remain an airport, but also that if the city violates any part of that agreement, the property reverts to the federal government.

Because the city accepted federal grant money for airport improvements, it was obligated to keep the airport open for 20 years after taking the money. However, the city is disputing the way the grant agreements are written and claims that its obligations to the airport end on July 1, 2015. The last time that the airport accepted and used money for improvements was 2003, and therefore airport proponents believe that this means the airport must stay open until at least 2023. In keeping with its desire to close the airport in 2015, the city has refused to renew any airport property leases beyond July 1, 2015.

All of these efforts, but especially the lawsuit, are designed to help the city “explore any and all possibilities for a voluntary agreement with the federal government that might modify airport operations so as to significantly curtail adverse impacts on the community.” The adverse effects include claims of excess noise and pollution, but possibly of more importance may be interest by local developers in converting the airport into far more profitable use. This is something the city does not acknowledge.

The recent complaint is formally a quiet title action, a tool commonly used for boundary disputes between property owners, said aviation law professor and pilot Lon Sobel. “The judge resolves who really is the owner based on underlying documents,” he explained. “The claim is a proper claim because the FAA is claiming it has rights to the airport property and to manage and use the property, and the city claims no. Where two people claim to be the owner, the true owner has to be resolved.”

Precedent-setting Potential

The reason that this issue specifically is of importance, Sobel said, is that the FAA realizes that this argument isn’t just about Santa Monica but could affect many other airports that were taken over by the government during the war then released back to local municipalities. “This is not about whether Harrison Ford [who bases his airplanes at Santa Monica] or NetJets gets to continue to fly into Santa Monica,” he said, “but what would happen if general aviation was suddenly shut out of dozens if not hundreds of airports around the country.”

Sobel explained that the lawsuit focuses on three agreements that the city entered into regarding its airport. The first is the 1948 post-war agreement, and because there is a dispute over who controls the land, it could hinge on the FAA’s view that while the government relinquished its lease, it retained the right to possession and specifically the right to possess all of the improvements that it made to the airport. The second is the 1984 settlement, which was in response to lawsuits that had been filed in the early 1980s. This agreement allowed the airport to develop some land for non-aviation uses and obligated the city to keep the airport operating until at least 2015 and applied some new noise-abatement procedures.

Issues that are raised with the lawsuit, Sobel said, include: “A., whether the 1984 agreement completely terminated the 1948 agreement’s perpetual-airport-use requirement and replaced it with a requirement that the airport remain an airport only until 2015. Or B., whether, when the 1984 agreement expires in 2015, the 1948 agreement becomes the effective agreement once again, and the dispute between the city and the FAA over the 1948 agreement’s perpetual-airport-use requirement will thereby be resurrected. I believe the answer is B.”

Finally, there is the question of how grant money affects agreements between the government and airport-owning municipalities. “It turns out that this dispute has to do with proper interpretation of the grant,” Sobel said. The last grant agreement signed by the city was in 1994, and these run for 20 years. While the complaint does not mention when the city last received money under the 1994 agreement, he added, “my understanding is that the city continued to get money under the 1994 agreement until something like 2003.” If the grant assurances requirement means 20 years from the date the city last accepts the grant money, then Santa Monica would be obligated to operate the airport until at least 2023, not 2015. Sobel believes this is the case because it wouldn’t make sense to give a city money for an airport, say, during the 19th year of a 20-year agreement, then have the airport close a year later.

Evidence for this is that the city has refused to take any money that the FAA has offered to pay for an Esco engineered material arresting system (Emas) at the end of Santa Monica’s Runway 21. An Emas could help prevent a runway overrun, an event about which airport neighbors have expressed a great deal of concern. But according to Sobel, “the city attorney told the city council that [accepting money for the Emas will] push out our obligations another 20 years.”

The government’s side of this entire dispute may have merit, Sobel said, because in cases of eminent domain, “there is a statute of limitations on wrongful taking. If the government said, ‘We’re taking that property,’ the owner has to assert its claim of ownership promptly. People can’t wait 40 years and say, ‘They took my property and now I want to be paid.’”

However, if the judge in this case decides that the government retains the right to occupy the improvements that it made to the airport (the runway, control tower, utilities and so on) then the result may be an argument over how much the government has to pay the city for these rights. “The city will say the rights to occupy the runway are worth billions of dollars,” Sobel said. “Then the neighbors will see what they have pushed the city into doing.” In other words, forcing this issue into a legal dispute that will be decided in the courts could result in the establishment of a huge monetary value for the land. For those neighbors wishing to see Santa Monica airport developed into a serene park, that won’t happen, he said. “It’s got no value as a park.”

The government has up to 60 days to file a response to the Santa Monica complaint and had not done so by the time this issue went to press.

NBAA “pledged to oppose the most recent action taken by [the city].” According to NBAA president and CEO Ed Bolen, “For decades, NBAA has been deeply involved in the battle to keep Santa Monica Airport accessible to business aviation. The association has always supported the FAA’s position–that the city has certain obligations with regard to the airport–and we are optimistic that position will be upheld. Nevertheless, we are reviewing the specifics of the city’s claim, and determining how NBAA can best ensure that access to SMO will be preserved.”

The lawsuit, said AOPA, “lacks any merit in law and is another desperate bid by the city to close Santa Monica Municipal Airport.” AOPA general counsel Ken Mead said, “It is abundantly clear that the claims made in the city’s lawsuit have no basis in fact. The city’s argument is hardly a novel one, and it should be very clear by now to members of the Santa Monica City Council and opponents of the airport that the airport must remain in operation under its agreement with the federal government. That may be politically unpopular for a few council members, but it happens to be the law.”

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Marty
on December 2, 2013 - 3:29am

Matt Thurber does a good job describing the City of Santa Monica's intent with this lawsuit. However he veers off the mark when he writes, "The adverse effects include claims of excess noise and pollution, but possibly of more importance may be interest by local developers in converting the airport into far more profitable use. This is something the city does not acknowledge."  The use of the word "possibly" is not sufficient to remove the credibility of any fair reporting by Mr. Thurber.
Further more Mr. Thurber apparently thought better of getting comments from those of us who are interested in having SMO closed altogether, and hopefully turned into a park.

The quotes by Mr. Sobel, Ed Bolen, and Ken Mead can all be challenged with regard to fact, however what is much more important is the lack of discussion on the excessive noise, air pollution and safety concerns and their affect on the public health of SMO neighbors.

The AOPA and NBAA's blatant disregard and opposition to addressing these critical issues at SMO, the poster child for GA airports, may and should come back to haunt them in future court battles. If indeed SMO is deemed to be at the City of Santa Monica's mercy and it sets a precedent as written in this article, well so be it. I for one of several thousand will breathe a sigh of relief to be able to breathe air unpolluted by jet fumes. Care to come to Santa Monica for a fair public debate? I'll set it up and you all can have a seat at the table.

Martin Rubin
Director, Concerned Residents Against Airport Pollution

 

John Jerabek's picture
John Jerabek
on December 8, 2013 - 9:41pm

Hi Martin,

I have to disagree with your assessment of Mr. Thurber's credibility with regard to his mention of developement as a consequence. It is obvious to everyone I've spoken with to date, that should the airport close, perhaps especially if it were converted into green space, the immediate changes in regulation and zoning would be a gift to real estate developers all over the westside. And not just those with property directly adjacent to the airport, but if you're familiar with regulations pertaining to navigable airspace, properties thousands and thousands of feet in every direction.

Not to put too fine a point on it, but for me, the veracity of Airport2Park's stated mission and I'm sorry to say Martin, the credibility of its co-founders, especially Mr. Stein and Mr. Gruber who have appear to have first hand experience with real estate law and city planning, is at this stage at least, called into question for me. Let me put is this way: I don't know if you've noticed, but Central Park is surrounded by skyscrapers.

Perhaps I'm being too harsh and too hasty. We have spoken on the telephone once previously Martin, and I sincerely enjoyed the conversation even though we disagreed. If the occasion does arise, and should I be invited, I am happy to participate in as many conversations as it takes to ensure the best outcome. I would much rather have a vibrant aviation community driving innovation for cleaner, quieter, safer aircraft and launching it from our "aircraft carrier" in the middle of our city to the rest of the nation, than any other suggested outcome I've heard so. Maybe if we had everyone working together to do it right, it would be an idea and a purpose everyone could get behind.

 

Regards,

John Jerabek

Santa Monica Resident

 

 

 

No Avatar
David Goddard
on December 4, 2013 - 12:10pm

The article states:

 if the city violates any part of that agreement, the PROPERTY reverts to the federal government.

The 1948 Instrument of Transfer Agreement states:

 if the city violates any part of that agreement, the RIGHTS TRANSFERED BY THIS AGREEMENT revert to the federal government.

ANALYSIS: The rights transferred by the 1948 Agreement were ground lease rights that either expired in 1947 or 1953 depending on which Presidential Proclamation you rely upon for the Declaration of Cessation of Hostilities. Either way, there are no remaining RIGHTS to transfer back to the federal government because they have long since expired.

David Goddard

Chair, Santa Monica Airport Commission.

 

John Jerabek's picture
John Jerabek
on December 8, 2013 - 8:14pm

Hello Airport Commission Chair Goddard,

Thank you for commenting. I am going to take this opportunity to disagree with the portion of your comment entited ANALYSIS, the 1948 Instrument of Transfer* actually states, and I am quoting directly from Page 6, Item (1) that  "the title, right of possession and all other rights transferred" revert to the party of the first part. I'm not an attorney, and without arguing over the meaning of the comma after "title",  the phrase "right of possession" seems to be an all encompassing statement and specific to tenant/landlord agreements.

I will also add that Page 5 Item (2) states "That the United States Of America through any of its employees shall at all times have the right to make nonexclusive use of the landing area of the airport at which any of the property transferred by this instrument is located or used, without charge;" I don't know how this would be possible if the landing area were to be eliminated.

Further, Page 5 Item (3) states "That during any national emergency declared by the President of the United States of America** or the Congress thereof, the Government shall have the right to make exclusive or nonexclusive use and have nonexclusive control and possession, without charge, of the airport at which any of the property transferred by this instrument is located or used…" The United States have been in a continuous state of National Emergency since September 14th 2001 and although the President has not exercised this right to my knowledge, if the 1948 Instrument of Transfer is binding in any respect, it seems to me the Government  can claim the right to possession at any time if they wish to.

*1948 Instrument of Transfer http://www.smgov.net/uploadedFiles/1948%20SMO%20Instrument%20of%20Transf...

**Continuation of National Emergency http://www.whitehouse.gov/the-press-office/2013/09/10/letter-continuatio...

Regards,

John Jerabek

No Avatar
john
on December 22, 2013 - 11:55pm

Good show Mr. Rubin, turn your tax-revenue-generating asset into one that becomes a drain, instead. Meigs all over again.

 

Of course, should your idiot dreams be realized, whine about your city (like the rest of our fair state) being 'cash-strapped'.

 

 

 

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