Lawsuit Over Control Of Ontario Airport To Move Forward

Ontario is moving forward with its lawsuit seeking control of LA/Ontario International Airport after the city and Los Angeles were unable to reach an agreement


Feb. 05--RIVERSIDE -- Ontario is moving forward with its lawsuit seeking control of LA/Ontario International Airport after the city and Los Angeles were unable to reach an agreement.

The decision came during a hearing Wednesday in Riverside Superior Court.

In December, both sides agreed to put the lawsuit on hold while a deal was negotiated to turn over control to Ontario. The stay lapsed on Jan. 31.

"It looks like litigation is how this is going to be resolved," said Andre Cronthall, attorney for Ontario. "Ontario certainly wishes for a resolution that is prompt and hopes that the parties can engage in constructive discussions but we recognize the realities of these major stumbling blocks."

Both sides are still at odds over the value of the airport. Los Angeles is not budging on the asking price, Cronthall said.

Los Angeles World Airports set a sale price of $474 million for ONT, nearly double the $250 million Ontario offered in 2011.

"LAWA is willing to consider a transfer of ONT to a qualified entity representing the cities and counties in the service area of the airport," said LAWA Commission President, Sean Burton in a statement. "However, LAWA will only consider such a transfer in exchange for fair compensation for assets transferred and reasonable protections for airport workers, including City of Los Angeles employees."

Ontario filed a lawsuit in June against the city of Los Angeles and LAWA, which operates ONT, aiming to rescind or reform the terms of the 1967 agreement that gave control of the airport to L.A.

Before filing the lawsuit, Ontario had been engaged in negotiations with L.A. after several years of attempting to get control of the airport transferred. The two sides failed to agree on the value of the airport.

LAWA, which also operates Los Angeles International Airport and Van Nuys Airport, is a department of the city of Los Angeles.

In December 2012, LAWA adopted its guiding principles for the potential divestiture of the airport. In the document, it outlines that the agency has invested more than $560 million in the airport since 1967. The agency also wanted to ensure the new owner could "demonstrate creditworthiness and future financial self-sustainability prior to acquisition of ONT."

But Ontario officials argue the airport is a public agency, and they should not have to buy it. Cronthall questions how the city could effectively and efficiently operate the airport with such a financial liability.

"It is a difficult situation and the parties are far apart," he said.

Attorney Roy Goldberg, also representing Ontario, said the precedent has been that agency-to-agency transactions of a federal asset is not sold for market value. That was not the case in San Diego and Detroit; and Ontario officials maintain it should happen here, he said.

"You are not selling an asset, you are exchanging caretakers," Goldberg said. "No individual state or local government should be looking to sell it like a commercial land."

At the brief Wednesday morning meeting, Judge Gloria Trask said she was sorry to see "the extra time was not more fruitful."

The Ontario case was deemed complex, which means it will be handled slightly different than other cases, such as giving attorneys more leeway on certain deadlines for court proceedings. It also means the courts will take a more active role in managing the case, given the number of documents involved, said Cronthall.

In addition, Trask has been specially assigned to the suit --seeing the case through if it were to go to court.

Both sides agreed to set a time line for the case, depositions could begin within the next couple of months. Trask suggested that both sides consider looking into who could serve as a mediator in case, should it become necessary during the process.

Ontario claims LA has failed to bring in and retain service at ONT and properly market the airport, while abandoning plans to redistribute air traffic throughout the region.

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