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SR-13-B (2) . . /3.B ~ JAN 2 7 1981 DATE: TO: FROM: January 19, 1981 Mayor and Counc11 Members William H. Jenn1ngs SUBJECT: Council Agenda Item for January 27, 1981 (Future of Alrport) Questlons concernlng the future of the Santa Monlca A1rport have been pending w1thout resolution for decades. Although these questlons have been extensively debated by the public, the press, attorneys, and 1ndlvidual members of this and prior Councl1s, there seems to have been a great reluctance on the part of the Council to take any stand on the issue. I do not believe that there 1S any benefit from ambiguity concernlng the airport. It 1S time for the Council to face this issue, pub11Cly and on the record. As presently operated, the alrport generates net revenue to the City of about $ltOOO per acre. Accordlng to the Wlll1ams-Kuebelbeck report, maXlmum development of the alrport property could generate up to $23,000 per acre But, if the airport were closed, the same report shows that the property could generate up to 5150,000 per acre at maximum lntensity, or easl1y $75,000 per acre lf developed in a responslb1e manner. The City has virtually no available space for addit10nal houslng and \rJith potent1al ellmlnatlon of Federal and State funds (e.g., "bail out" subventions, Community Development Block Grants, revenue sharlng, etc.) 138 JAN 2 7 1r81 . . To: Mayor and City Council -2- January 19, 1981 and w1th the crisis 1n funding for such fundamental Clty serV1ces as police and street repair, it 15 imperatlve that we move decislvely to resolve the future of the airport, preferably by moving toward closure. For these reasons, I request the Council to cons1der the follow1ng actions: 1. Instruct the City Attorney to file declaratory relief actions against the United States Government and any other long-term lessees to ask the Court to decide whether the City lS precluded by the alrport grants and leases from clos1ng the alrport. 2. Instruct the City Manager and Clty Attorney to serve approprlate notices upon the month-to-month tenants at the alrport informing them that they must vacate by one year, or some other reasonable period, after the notice. 3. Request the Planning Commlssion, Airport Commission, Hous1ng Commission, and Commission on Older Amerlcans to hold appropr1ate hearings to SOllClt views from the public concern1ng the types and m1X of uses to be developed on the property followlng closure of the alrport and to make recommendations to the Council based upon such hearings. WHJ:cls . t2A;~~~!z g ~. ,/'Tif/ . v ~__~ 5-K: USES IN M-L INDUSTRICT DIS<<TRICT: Presented for consideration was an adoption prohibiting dental uses 9, l194(CCS) ~UNICIPAL CODE RELATINI HEIGHT IN 5-J: HEIGHT LI~IT IN 6-2 NEIGEBORHOOD COMMERCIAL DISTRICT: Presented ~ for consideration was an ordinance for adoption reducingAheight limit to two stories (30 feet) in the Ci2> };eighborhood ComMerc ial District ~ introduced December 9, 1980. Crn Reed ~oved to adopt Ordinance No. l194(CCS) entitled: ItAN ORDINANCE OF rrHE CITY COUNCIL OF THE CITY OF SANTA ~ONICA AMENDING CHAPTEfi 1 OF ARTICLE IX 8806B~ OF THE SANT~ ~ONICA (reduc ing the height '.imi t to two stories d[30 feet l) \ MUNICIPAL CODE RELA~ING TO BUILDING HEIGHT(IN TEE C2 NEiGHBOR~OOD :- -:..:::-.......:... .lr_ ~:"'__ ~..~ ':";~4~ ~ ':'..r 1.~-~-v ~ jr\lU II :5 v OJ-.l ~ ~ --{.J~'.; ~c:- L COMMERCIAL DISTRICTllI~ reading by title only and waiving further readln~ thereof. Second by ~PT YG. ~PT YG entered into the record ~~~f Dr. lHchael E. Glass~ r.:'.o lO~~6"~-"".- ,U",'V" ~ -~ t-ee t-,., ("0'_'",""i!!'"'.9~~':.~8 l~~pport of the two-story hei~ht limit. The motion was approved by the following vote: CV: Aff: YG Jer. Reed Rhoden Banbrick Neg:: Scott 13-8.13-J,2l:nQfXX --=-:- -. ----- - 1 - -'-"' l3-K' SAN~A VONICA AIPPORT USES A~D LEASES. " I Presented at this time were the requests of Councilr.ernber JEnnin~s for dis( discussion of actions rev,arding closing Santa Monica Airport, notices upon \it 12 ti . . notices upon tenants and hearin~s to solicit public views concernin~ airport uses; and the request of Councilrnember Scott for discussion airport leases. of Wings West and Cloverleaf Aviation (Duke) leases at S~MKa Councilmember Scott introduced discussion - apparently we have been s<<x threatened and apparently been sued about the Business of whether or not Mr. Duke is entitled to transfer more than a 40% owner ship interest in that leasehold to some party who h uL ..vL a-. was not a shareholder at the time the lease was ~~aX executed. . ..the lease document prohibits such transfer but more importantly Section 105 of the contract No. 1689 l!~ (7)the nen speculation provision says "developer acknowledges that the qualifications and identify ty of developer are of particular concern to city and dev. further recognizes that it is because of such Qualifications and identity that the city is ent~rin~ into this a~reement with the deve. Tl We made the agreement because of r-.!r. Duke and his experience and have no obligtation to acceed to any such transfer - arm-waivin~ is baloney. The other claim that keeps gettin~ made is that the city has some requirement to complete a particular master plan at the airport and failure'to do so we tave breached the lease. Nonsensical. The si~ple fact Is that the onlv airport improvements that arc rcoruied to be cOMoletd bv that contract are the i~provements reauired of~r. Duke. The only contractual bo obligation is on hi~. We did res€rve a right~ which is ~ot an obllgtation~ to develop that airport as the city sees fit. That's seems pretty clear. 13 . . References to the Pier? and Luckman plan are simply ir. the contract - as a matter of fact, I remember the ne~otiations since I negotiated the contract - h is nothing more than the recittation of lc~al facts that are a matter of public record and post absolutelv no obligtation on the City. What it boils down to is that I think we have long since been derelict in failing to pursue Mr. Duke for breach of the lease and we should correct that oversight iIT~ediately. The final claim is that the contractspecifically permits Mr. Duke to enga~e in a scheduled passenger airline service. That is also nonsense. Contract states "rent airplanes to others with or without pilots, charter airplanes, and ca!'ry passengers friehg freight carp;o and mailll . I can testify that there was absolutely no discussion of carrying passengers a except on charter flights. Whateverthe argu~ent, another portion of that same section says "subject however to all appropriate laws and ordinancesll. We had an ordinance then and now that nrohibits scheduled airline service in the absence of a specific agree~ent and permit issued by the City Council and I have not heard that we had even considered or had a request for approval of such service. One obligation M~XXI~~~XX is imcosed on the City is to maintain a general aviation airport for the terN of the lease and that obligtation extends through most of 1996. Comoliar.c8 wit~ this provision means only that we maintain that which le~ally qualifies as a general aviation airport. Duke has been in default and breach of this lase following about 90 da~!s after its execution. We have, if I a~ to believe the staff, been muzzled witr- threats of suit, threats to llj . . institute scheduled cOIT~uter airliene service from SM airport tlear across the US. It seeMS high ti~e to resolve and I Cm Scott moved that the City Attornev be instructed to notiry Duke, Contract No. l689~-CCC) the leaseholder ( that the city is pursu3n~ the breach of contract and that he has the contract time nrovided to cure and that failure to do so will result and the City Attorney is instructed to pursue termination of the lease as provided in the lease. Second by em Reed. Jennings asked and Shane said we notified Cloverleaf that they were in default, notice was not pursued, at that time Cloverleafe had filed but not served a lawsuit against us alleging some ei~ht different counts and dama~es, served today, so we do have an existing notice and not sure ~:e \':ould have to file a new one or not. The lease provides a 30 day cure period. McClain said in addition we did serve them with a three day payor quite notice because of failure to pay back rent, that was naid and they are not in default in that regard at this time. Jennings said as lawsuit pending an has been served ask Council to li~it corr.ments - this is nor~anlly discuSSEd in Closed Session - pleasE dire deal directly with contract. Scott discussed the waI7~MX that the int€nt of the motion is that we now assert all of the breaches thet can be d identified and give the ~~~Q~XaKX operator the opportunity to cure as provided 15 . . under the contract and that failure to cure will result in termination. Rhoden asked for two answers - one, our position relevant to our ability to refusE transfer and our exposure thereby for refusin~ to do that, and if in fact the case of Richard~on applies to that, because we are dealin~ with a corporation rather than individiuals who are related to the ~or~er ~ayor; ar-d whetter or not in fact the City has any obliFtations because nyunderstanding was the opposite of which Scott has stated as far as our resDoDsibility to comply with improvements outlined in Perrraro report. I would like to understand if under terms of this lea~e we have any obli~tations to perform that and if by takir.g this action to impose that condition on a lessee are exposin~ ourselves to the likelihood of beinF forced to comply as well. Jennings C~ Jennin~s moved to that this natter be tabled for discussion durin~ Closed Session. The motion failed for lack of a second. Jennings said we shouldn't give away our theories. It's been discussed in execce utive session before. Scott said no objection to closed session to discuss, however objection to continuin~ the ~atter. Stark willir.~ to read the relevant lease orovisions and su~~est that any interpretation or possibility of them bein~ uD~eld be discussed in Closes Session. The provision as to the Per~aro Luckman plan is contained in a recital to the lease section 1.01 reads as follows" II 16 " . . The lease does not contain further reference nor covenants to the P/Luckman plan. The second question as to prohibition on development. The relevant clause was correctly paraph~rased by Clause. Rhoden said the question was on applicability of Richardson decision re corporate transfer of stock. Shane said the Richardson decision is debatable and best be discussed in Closed Session and does not directly concern the lease. MPT YG called the question to Scott's motion and indicate to the public that further discussion of the OOMX issues will take place in Closed Session. Second by em Jennings. and vote or. the MPT yr. moved to clOSE debate i~MX~KXI the question to the ~alnXX Cm Scott's motion. Second by em Jennin~s. The motion was approved by the follO'r'Jing vote: CV: Aff, YO, Jen, Reed, Scott, Bambrick Negative: Rhoden N.6:gXXXX1BfK:KiIHX MR'XXX~X~0:~2H4 Cm Scott's ~otion was approved by the following vote: CV: Aff: YO Jen Reed Scott Bambrick Abstain: Rhoden CfnX C~ Scott an asertion has been ~ade that if the City doesn1t take so~e actions - ttat I think are not in best interests of the City - that conmuter SErvice is ~oin~ to be instituted - which I suspect all of us would agree 1s kind of bad. What bothers r.e 1s Wings West is on that airport and conductin~ a scheduled passen~er ooeration that is not authorized. they are on a month to month lease. why put up with this no~se. 17 . . Rights extend only for 30 days. em Scott moved that Wings West (Contract No. ) be cure or served a notice to/quit 30 days from the date of their next rent payment if the scheduled commuter passenger service is continued. Second by Cm Reed Rhoden - I understandin~ the prior city attorney had IdX issued temporary operating permit to WW. if true3 does it limit our ability ob servX~e a notice to quit. Scott said attorney has no authority to issue a pernit and even if he did it is only for 30 days Shane - formther City Attorney did not issue a perMit. He descirted was is required for scheduled service to co~mence......ending in must be approved by City Council. They were notified.... there was an a~7eement between forbher City ATtorney and their attorney that in essence we would not press claim for default if they would apply for permit and pursue the application. That has since been suspeotled. The motion was approved by the following vote" CV' AfC: YG Jen Reed Rhoden Scott N€~. BaMbrick Cm 0ennir.~s moved to ir.X~~~~ that Council instruct the City Attorr.Ev to file a declaratorv relief action a~ainst the United States GoverDrent and anv other lonF t€r~ lessees at the Airoort to ask the court to 18 . . decide whether the City isprecluded by theairport ~rants and leases from closin~ the airport. the motion failed for lack of a second. Cm Jennin~s moved that Council instruct the City Manager and City Attorney to serve appropriate notices upon the month to month tenants at the airport lnformin~ them that they must vacate by one year after such notice. Second by MPT YG. Jennin~s said Airport Commission has already voted three to one and one pro-airport r.ot there, to support this motion and asked City Council to give this notice that they must vacate within one year. The one year peiod has been arbitrarily chosen; should not be punitive, need reasonable period of tine ~o relocate. anything shorter would b probably be unreasonable. Shane requested clarification, at Airport Commfn they were reauested to ir.dicate whether it applied to those peopel whos leases expired during the aile year period and wonder whether motin applies to that. Cm Reed moved J Cm Reed moved an amendment to the motion to instruct the City Manager and City attorney to serve appropriate notices upon the airport-related month-to-month tenants south of Airport Avenue .. .blah blah the rest of his motion further that staff be directed to aFendaize a discussion of an Request for Proposal at tr.c secor.d ~c€tin~ in Februarv for develop~ent of tr.e parcels south of Airocrt ~venue which Darcels are now occupied by airport related businesses so that the City Council ~av at said ~ ''1' . . disucussion indicate the tyee of non-airport tenancies that woudl would be acceptable , the length of said tenancies and any other development reauirewents s thou~ht necessary to go into the RFP Instead of a second, Jennings who asked are who are those. Reed said there are some in the main admin. buildin~ and a couple of others. W~XK~MNI<<XK~~HN Knickerbocker D. Dou~las Jr facility and museum I would exempt. Cm Jennings Following discussion, Cm Jennings included Councilmenber Reed1s motion as a friendly amendment, provided we can also get a report as to exactly who they are and then if we deicd decide, basedu upon that list of who they are that we ought to also include some of them. MPTYG said she would withdraw her second if they do that. ClearEr to do what they are doin~ based on financial. During discussion, MPT YG withdrew her second and em Reed seconded em Jennln~s motion. ~ Jennin~s talked about carvin~ ~~Reed said it would be intention to only serve the one year notice on the airport related tenants given Jenninvs argunents that they need 7cre ti~e to be noticed. It would not be MY intention to forever grandfather in the nonairport related tenants' no need to give year's nctice. I agree with Jennin~s that in discussion developr.er.t plans for :his strip south of Airrort Avenue we would of course consider tte wrole Darcel and how those other tenants fit in. S like Lear Sie~ler we couldnt throw out. '),r) L\.u ;U.. 4- ~) ~ . . My reasons for submitting this are several. It wh should be noted that prior to this time we have taken very slgnfiicant action against two tenants both of whome I believe on the are on the other side of Airport Ave and we may in fact by Scott's actions be terminatin~ those tenancies and it seems to me at least I for one do not believe Council can arbitrarily clsose airport given provisions in a couple of leases at lease unetll the 1990's and I think it's silly to talk about doing it. I believe that if we atteTpt rather to Maxlmuize our developmbnt opportunityies around periphery of the airport we can shrink down the airport related uses to somethlnv the community feels it can live with. Scott - I like the rr.otion in ori~inal forn best but prepared to support the alt~ernative. Jennings - confused - south of airport ave? as opposed ~KXs~<<K to south t of airnort runway Reed - yes, I said south of airport Ave - that strEet that runsa alor.g there anc airport related uses on obht botr sides of t~c ave and I aM leavin~ alcr:e those few uses that are adjacent to the runway and north of airrort av€ and I aw focussin~ on the land south of aircort Ave. Scott - I can't sup~ort that - I dicn't understand that bit. I don't think w€ have any choice if such action is taken but to includE each and every aircort use. ~o -{l ) . . Jennin~s suggested vote on motion now and have a substitute ~otion north of Airport Ave. There may be enough votes. Shane requested clarification - Reed's motion concerning non airport related uses, is it the intent of the motion to give such non airport r€lated uses, assumin~ on a ITonth to month basis, a year's notice. Reed - not intending to do anythin~ we with them at the present elm time but only to give the one year notice to the airport related uses and basically igr.orin~ the other uses. and Douglas museum. I consider them to be non aprirt related. MPT YG moved a substitute motion which was the ~I~ gist of Me. Jennings original motion - should start with that first. I am not prepared to indicate that some airport uses are ~oin~ to stay and others arent' . I want to follow the direction of the Airport Commission and notify al 1 holders of month to month leases. Scott would you move approval of airport cowm1ss1on recommendation. Scott said he would second if she did. Scott discussed le~al exposnce about discriminiatory or selective and if any intention in pursuing that we have no alternative but to include all uses. ~PT YG moved a substitute Motion to a~nrove th d t L'~ .e reccmmen a ion of the AirDort Con~iS5ion z,J ~ =- :..~--...- '=-- ---"'-------~---- - ~~----- ~ -- ~-"'"'""--""