City Council Report
City Council Meeting:
Agenda Item: 4-A
To: Mayor and City Council
From: Rod Gould, City Manager
Subject: Proposed Phase II Public Process Regarding the Santa Monica Airport Campus
Staff recommends that the City Council review and comment on the Santa Monica Airport Campus Phase I Public Process findings and direct staff to proceed with the proposed Phase II Public Process concept.
The City has embarked on a rigorous three-phase public process regarding the 227-acre Santa Monica Airport Campus (Attachment A), which includes 187 acres of “Aviation Land” that must be used for aeronautical activities and 40 acres of “Non-aviation Land” that is open to other uses. All land and building leases throughout the Airport Campus as well as the current operating agreement with the Federal Aviation Administration (FAA) expire in 2015. Given the 2015 timeframe, on December 14, 2010, Council authorized the City Manager to negotiate and execute professional services agreements with The RAND Corporation (RAND) for a study of best practices and conceptual uses that could be compatibly located at the Airport Campus land and Point C Partners (Point C) to formulate and manage a preliminary community interview process regarding the range of possibilities for the future of the Airport Campus.
On February 22, 2011, Council authorized staff to proceed with Phase I of a proposed comprehensive three-phased process that included a professional services agreement with HR&A Advisors Inc. (HR&A) to analyze the general economic and fiscal impacts of the current operation and activity at the Airport Campus. This Phase I process has resulted in findings regarding best practices at general aviation facilities in relation to local communities by RAND, results of interviews and surveys of the public by Point C, and the Airport’s economic impact on the local and regional economies by HR&A. Phase I also included the development of the format for the Phase II public process of focus groups, which is proposed in the body of this report. In Phase III, the studies from Phase I and the results of the public dialogue from Phase II will be analyzed in depth within their thematic outcomes and presented to Council for consideration of potential policies and actions in early 2013.
Phase II, as proposed, includes a comprehensive, transparent, and open public dialogue through facilitated focus groups. The purpose of the focus groups is to gather and record community comments and ideas with the ultimate goal of formulating, discussing, and prioritizing potential policies and actions in advance of Phase III. Phase III will involve strategic analysis of the themes articulated in Phases I and II in regards to the Airport Campus and its facilities.
The Santa Monica Airport is one of the oldest airports in the United States, and the oldest, continuously operating airport in Los Angeles County. It is also one of the most historically significant given its vital role in the development of the modern air transportation system. The Airport was first established in 1917 and the original 170 acres of the Airport were acquired by the City in 1926. From the late 1920s through the early 1970s, the Airport was home to the largest employer in the City, the Douglas Aircraft Company.
In 1924, Douglas Aircraft and the Airport first gained fame when the Douglas World Cruiser biplanes were the first aircraft to circumnavigate the globe. By 1929, Douglas Aircraft had enlarged its Santa Monica Airport operations and began to ramp-up production and testing of its early airliners, the DC-3 and DC-4, which launched commercial aviation. During the years immediately preceding U.S. entry into World War II, Douglas Aircraft became a major defense contractor, employing up to 44,000 workers who worked three around-the-clock daily shifts, seven days a week. It transformed the city as thousands of new homes were built for the Douglas Aircraft workers, fostering the growth of communities such as Sunset Park and other neighborhoods around the Airport.
1941, the federal government leased most of the Airport from the City to
provide protection for Douglas Aircraft and participated in expanding the
publicly-owned facility to its current
With the end of World War II, the federal government wanted to relinquish its leasehold. The City and federal government executed an Instrument of Transfer on August 10, 1948, and the City resumed operation of the Airport and constructed Airport Avenue in 1950 in order to provide access for general aviation facilities on the south side of the runway. In 1959, Douglas Aircraft developed the DC-8 commercial jet to compete with Boeing’s 707. Over the next few years, Douglas Aircraft developed plans and proposed that the City lengthen the runway to accommodate this new jet aircraft and acquire additional acreage to build new corporate offices and other facilities so Douglas Aircraft could establish a regional aerospace and electronics hub. The City declined, and Douglas Aircraft shifted its jet manufacturing to the Long Beach Airport. Research and development of missile production and sub-assembly work continued at the Santa Monica Airport plant until the early 1970s when Douglas Aircraft closed its Santa Monica operation and left the Airport. The relationship of the Airport’s immediate neighborhoods and the city changed with the departure of the then-largest employer and the move away from a significant manufacturing base at the Airport.
Private general aviation activity began again at the Airport after the end of World War II. In the 1960s, the first general aviation jets arrived at the Airport. They were "pure jets," which were louder than present-day fan jets. The noise impacts upon neighborhoods adjacent to the Airport were very significant and lacked any connection to the national defense and employment significance associated with the former operation of Douglas Aircraft. The advent of these jet aircraft, the high volume of general aviation activity, and attendant increased impacts upon residents living in close proximity to the Airport brought controversy, resulting in litigation regarding the City's ability to limit Airport usage and a dispute between the City and the FAA.
In the mid-1980s, the City and the federal government came to a settlement agreement with the adoption of the 1984 Agreement governing Airport operations. The 1984 Agreement facilitated the City’s enactment of one of the strictest Airport Code and Noise Ordinances in the nation. These operational restrictions limit, among other things, the maximum allowable noise level an aircraft can generate, the hours of operation of the Airport, and the types of aircraft operations. The restrictions also prohibit helicopter flight training. This Agreement expires in 2015.
The Airport Campus Today
Today the 227-acre Airport Campus is the largest facility owned and
operated by the City. The Airport Campus
is comprised of Aviation Land and Non-Aviation Land. Serving the primary function of the Airport
with facilities dedicated to aviation-related uses is the northern and central
area of the campus on
Aviation Land is home to over 400 based aircraft and numerous aviation service providers that offer a wide range of services to the flying public. The Airport also houses Angel Flight West, a non-profit volunteer organization that organizes free air transportation to deal with medical care needs for children and adults, and EVAC, an emergency disaster response program. The Airport plays a critical role in the city’s and the region’s emergency preparedness, serving as a major emergency response site and facility in case of natural disasters such as earthquakes or other urgent situations.
In addition to its core aviation services, on Non-Aviation Land the Airport serves the community with recreational opportunities at the 8.5-acre Airport Park that has play fields, picnic areas, and a dog park. There is also the sustainably-landscaped Airport Avenue Demonstration Gardens located at 3200 Airport Avenue. The Non-aviation area further provides a home for a thriving cultural and arts community that includes the highest concentration of artist studios in the city as well as galleries and live theater. Furthermore, it is the site of the twice-monthly Antique Mart and the annual Art Walk. Also located at the Airport is the Santa Monica College Arts Campus.
Within the Non-aviation Land there are major event sites including the Baker Hangar and the Santa Monica Arts Studios that offer programs such as the LA Art Show and PAL Halloween and events for non-profits like Heal the Bay and Children with AIDS. It also contains creative and professional office space as well as the Westside Small Business Development Center and the DC-3 monument. In addition, the Museum of Flying will be open to the public soon.
Community concerns with airport operations have continued with complaints frequently expressed about noise, safety, pollution, and pattern flying, particularly by Airport Campus neighbors both in Santa Monica and Los Angeles. Noise concerns have primarily been directed at jet, helicopter, and piston aircraft operations The community expressed concerns about pollution, raising concerns about jet aircraft emissions (particularly when holding on the runway), the smell of jet fuel, and the presence of lead in piston aircraft fuel. Safety is also an expressed concern with regard to pattern flying and flight training. Complaints regarding piston aircraft were heightened with the start of the FAA test of a proposed 250-degree turn for Instrument Flight Rules (IFR) piston aircraft with safety concerns about possible aircraft either overrunning the runway or landing short, particularly since there are no runway safety areas. The concern over safety elevated recently due to a non-fatal crash in August 2011. The City takes the issue of safety very seriously and will remain vigilant in operating the Airport as safely as possible. Any actions taken at the Airport Campus to address these concerns must be implemented within the context of a complex jurisdictional and legal environment.
The Legal Constraints Established by Federal Law
In identifying and considering the possibilities for the Airport Campus's future, it is absolutely essential to bear in mind federal legal constraints. The City owns and operates the Airport. But, federal law governs and strictly regulates the national air transportation and commerce systems; and, subject to limited exceptions, federal law preempts local regulation in this area.
Congress gave very broad responsibility and
authority to the FAA in order to ensure that the nation has a safe and
efficient air transportation system. This authority is multi-faceted. It
includes the power to regulate and control navigable airspace, air
traffic, and air navigation facilities. (49 U.S.C. § 40101 et seq). Also included
in the FAA's mandate is the power to regulate local noise controls. (49 U.S.C.
§ 47521-47533). And, among other things, the FAA is charged with the
responsibility for airport development. (49 USC § 47101).
Pursuant to the statutory authority granted by Congress, the FAA has adopted
regulations that effectuate its powers. These regulations, like their
federal statute counterparts, cover a very wide variety of aviation-related
fields. Thus, for example, the FAA has adopted regulations governing
aircraft certification and aircraft operations.
As an adjunct to its responsibility for
airport development, the FAA is authorized to award federal grants for
airport construction and improvement. (49 U.S.C. § 47101 et seq.) Congress has mandated that all such grants
must be conditioned upon written assurances that the grantee airport "will
be available for public use on reasonable conditions and without unjust
discrimination" (49 U.S.C. § 47107(a) (1)) and without providing any
"exclusive right" to use of the airport. (49 U.S.C. § 47101(a)(1) and
(4)). Similar conditions apply to conveyances of land from the
federal government for use as a public airport. The FAA has adopted
regulations related to these grants, and they include provisions
establishing an administrative process for enforcing the grant conditions.
Santa Monica's Airport has been the subject of many legal disputes between the City and Airport users, Airport neighbors, or Airport businesses. However it is the legal disputes between the City and the FAA that have proven to be the most difficult. The most recent example is the eight year legal battle over the City's Aircraft Conformance Program and the corresponding ordinance banning Category C&D aircraft. This dispute cost the City well over $1,000,000 and the C & D ban was struck down.
Over the course of that dispute, the FAA explained its legal position relative to the City's obligations in its briefs filed with federal appellate courts. Thus, on the issue of Airport closure, the FAA has made it very clear that it does and will take the position that the City cannot close the Airport in 2015 because the Instrument of Transfer, executed after the conclusion of World War II in 1948, obligates the City to operate its Airport in perpetuity. Additionally, the FAA takes the position that the City accepted federal grant funds in 2003 and is thus required by federal law to operate the Airport for at least 20 years thereafter, or until 2023.
The City takes a different position on the closure issues, which is not surprising given the FAA's and the City's very different responsibilities. However, the FAA's position on closure must be understood and appropriately acknowledged because it bears heavily upon the City's options. The clearest and most extreme example is potential closure. It is crystal clear that, if the City attempts to close the Airport, the FAA will not hesitate to aggressively fight against closure in the courts. Such a fight would go on for years; and, at best for the City, the outcome would be highly uncertain. What is certain is this: the fight would be long and expensive and -- perhaps most important -- neither party would be able to control the result.
Likewise, in the process of conceiving possibilities for the Airport Campus's future other than attempted closure, it is crucial to understand and acknowledge the FAA's authority and the federal constraints at work here. Thus, for instance, it is important to bear in mind that most of the Airport Campus land must be utilized for aviation purposes. Some of the land has been released for non-aviation purposes, but that land is also subject to certain federal constraints. For example, Airport Park is built on non-aviation Airport land; and federal restrictions (mostly ensuring safety) applied to what the City could build on the site. Other non-aviation land at the Airport Campus is leased to Santa Monica College and to businesses. Federal law requires that these leases be at or above market rate and that the proceeds be used solely for the Airport Campus.
Because understanding the federal legal constraints and the FAA's role are essential to any discussion of the Airport Campus's future, legal staff anticipates continuing to participate actively in the process of identifying and discussing the possibilities.
The expiration of the 1984 Agreement and all of the land and building leases in 2015 presents a unique opportunity for the City to reengage with the FAA to discuss Airport Campus operations within the aforementioned parameters. The operations and facilities of the Airport Campus are serious and important matters to the City and the community. At the conclusion of the intensive phased outreach process, the City will be well informed by the findings and well positioned to discuss those findings with the FAA as the termination date of the 1984 Agreement and various leases approaches.
Phase I of the three-phased process began in March 2011. It engaged a broad group of community participants and industry experts informed by best practices, global trends, and state-of-the art thinking in compatible land use design and economic impact of the facility. In Phase II, an extensive public process is proposed featuring an open house at the Airport Campus to kick off the effort followed by a large number of focus groups comprised of members of the public to be held throughout the city beginning this winter and through spring 2012. With these essential inputs providing a full range of identified preferences given the constraints on Airport operations, the City can then undertake an analysis process grounded in a comprehensive understanding of what is possible and the associated costs and benefits as a part of Phase III for in-depth analysis.
The Phase II public process is intended to be a comprehensive process including preliminary analysis of relevant concepts and their local applicability that will elevate the discussion to a new level. Informed by possibilities and constraints, people throughout the community with different interests and perspectives would be able to engage in an in-depth dialogue about their concerns, priorities, and preferences for the future of the Airport Campus. The results of each focus group will be documented and presented to Council in May 2012.
Phase I Consultant Findings
The consultant teams have completed their Phase I efforts and their findings are summarized below.
Consultant Findings: Point C
Point C’s initial phase of work involved research and developing relationships with a broad spectrum of community groups and potential participants in a public process. These conversations with the community were intended to be distinct from previous endeavors by involving discussions amongst an expanded group of interested parties in an attempt to build a foundation for an informed and inclusive dialogue. Understanding the needs of current and potential users and communities was essential for framing the discussion. Point C’s activities included the following:
Consultant Findings: HR&A
HR&A Advisors, Inc. (HR&A) prepared estimates of the general economic impact that the current operation of Santa Monica Airport, including that of the Airport Campus, has on the city’s economy, and its net fiscal impacts on the City budget. HR&A has extensive experience preparing related analyses for a wide range of institutions, development projects, and planning initiatives throughout California and other parts of the U.S., including a number of related assignments for the City.
Economic Impact Analysis
The general economic impacts of the Airport Campus were estimated using an IMPLAN input-output model and economic data specific to the geography of the City. IMPLAN is a widely accepted modeling system for measuring economic impacts including direct and “multiplier effect” impacts, which are typically expressed in terms of jobs and economic output. The economic impact estimates are based on detailed analysis of on-site Airport Campus employment at all aviation and non-aviation tenants (for-profit and non-profit), governmental agency expenditures (i.e., Airport Administration and Santa Monica College), and estimated visitor spending by arriving air passengers who stay in city hotels. The annual operation of the Airport Campus includes 177 different aviation and non-aviation businesses spread across 42 different industry sectors; $7.5 million in City and Santa Monica College annual expenditures; and $2.5 million in arriving air passenger annual expenditures in the city.
Fiscal Impact Analysis
The fiscal impact analysis (i.e., total City revenues minus total City operating and capital costs) was based on budget data for the Airport Fund and original research on General Fund revenues generated by Airport Campus annual operations. HR&A’s analysis concludes that the current operation of the Airport Campus had the following fiscal impacts in FY 2010-11:
· The Airport Campus produced about $5.0 million in total revenues, including $4.0 million recorded in the Airport Fund and $1.0 million recorded in the General Fund.
· Forty-six percent of the Airport Fund revenues were derived from land leases, with the remaining revenues derived from the combination of hangar rentals, building space rentals, landing fees, fuel sales, tie-down charges, and interest earnings.
· Forty-six percent of the General Fund revenues were derived from the City’s share of property tax paid by tenants, with the remaining revenues derived from business license tax, utility user’s tax, parking tax, sales tax, and transient occupancy tax paid by arriving air passengers who stay overnight in City hotels.
· These estimates do not include revenues derived from businesses and household expenditures elsewhere in the City that are indirectly supported by business and governmental operations at the Airport Campus.
For FY 2010-11, annual Airport Campus operating costs recorded in the Airport Fund and General Fund including salaries, supplies and other general expenses, capital costs, and the cost of services provided by other City departments were nearly equal to total revenues.
Consultant Findings: RAND
The RAND Corporation was charged with developing a set of conceptual proposals for activities that could take place at the Santa Monica Airport Campus over the coming years. RAND conducted a scan of trends in aviation and airport practices to determine how other airports were developing in relation to their nearby communities. RAND also assessed local economic, social, and cultural trends and planning documents specific to Santa Monica and its neighbors as background when developing its recommendations.
The recommended concepts are not specific as to place, time or cost; instead, they are “concepts” intended to inform and stimulate the community process. The individual concepts are consistent with the following overall goals:
Elements of the Future Nature of the Airport Campus:
In all cases, these concepts are preliminary, but they have been discussed with local and regional authorities, educational institutions, governmental departments, private sector organizations, and those who would play roles in implementing future activities of these sorts at the Airport Campus.
Proposed Phase II Public Process
The Phase II public process would provide an opportunity for all members of the public with an interest in the future of the Santa Monica Airport Campus to fully engage in an in-depth interactive discussion about its impacts, physical and policy relationship to the city and surrounding communities, and possible future opportunities through focus group meetings that would be held throughout the city. The focus groups would be comprised of approximately 8 to 12 participants each and are intended to be exhaustive in their breadth and frequency. Through these focus groups, staff anticipates a wide range of participants with a variety of viewpoints will be reached between January and March of 2012.
Any interested individual can participate in one focus group, which would be facilitated by a professional organizer of public meetings and community processes. The approach would emphasize inclusiveness and a high level of community interaction. Prior to the commencement of the focus group sessions, an open house would be conducted on the Airport Campus in December 2011. This would provide all interested members of the public an opportunity to tour the site, its facilities, and operations. This is similar to the Airport Park public process that featured self-guided tours and observation stations.
The focus groups allow direct dialogue between interested participants. The process would be augmented by a web site that provides a summary of each session as well as general resource information about the Airport Campus. This would facilitate transparency and allow any interested party to follow the process. The comments and suggestions of each of the focus groups would be recorded and a summary of the results of each group would be presented to Council in May 2012 along with the proposed Phase III analysis process.
If Council directs staff to proceed with the proposed Phase II Public Process concept, staff will work to further define the Phase II tasks and budget as well as identify consultants and/or facilitators who could support the process. Professional strategic consultants, working in concert with City staff, would develop materials for and facilitate the focus group meetings, conduct an open house, establish the Phase II website, and provide broad public notice of the Phase II process and focus groups. The Phase II input will be reported back to Council and the community in May 2012.
If Council directs staff to move forward with the proposed Phase II Public Process concept, staff will return to Council this fall with a recommendation to enter into an agreement with a consultant for Phase II tasks.