Commission OKs 2 Building Projects on Van Nuys Airport Land

The Los Angeles Board of Airport Commissioners Wednesday approved two more multimillion-dollar construction projects on Van Nuys Airport land despite a city analyst’s objection that the city will not get sufficient lease income from them.

The commissioners said it was worth accepting the lease terms to get out of a lawsuit that could have tied up the land for about five years, costing more in the long run.

The board unanimously approved a 40-year lease with First City Pacific Inc., an Encino industrial development company that plans to build a $2-million light industrial complex on a seven-acre site now occupied by tennis courts and a go-cart track at Roscoe Boulevard and Balboa Place.

The board also approved a 40-year lease with Pay-Fone Systems Inc., which plans to build a $2-million corporate headquarters and computer center on 1.4 acres on the northwest corner of the airfield.

Both projects are part of a continuing drive by the commission and the Department of Airports to make the money-losing Van Nuys field profitable by leasing the land ringing the airstrip to commercial developers.

The lease agreements must get City Council approval, which usually is granted routinely after a decision by the commission.

Benjamin A. Waitman, principal administrative analyst for the city administrative officer, told the commission his office would not recommend approval of the leases because the annual rent for first five years, $15,500 an acre, is too low.

His office calculated the value of the land to be $25,000 an acre annually, he said.

The commissioners said, however, that the property is now occupied by a tennis club that is behind in its lease payments, and noted that the land is involved in lawsuits against the city and the commission by a former manager of the tennis club, who has claimed a right to part of the lease.

First City Pacific, in order to obtain the lease, agreed with the Airport Department to make payments to settle the lawsuits and to be responsible for claims by the tennis club, the commissioners said.

S. Dell Scott, attorney for First City Pacific, said after the meeting that the San Fernando Valley Tennis Club paid the former manager $40,000 to settle the suits, and that the developers are negotiating to make payments to the club. He said the developers have agreed to take responsibility for any claims by the club against the city, and to pay the club’s back rent owed to the city.

Commission Chairman Johnnie Cochran said the company had acted in good faith to carry out a promise to get the city out of the suit, and that “ethically, we have a responsibility to go forward” with the agreement.

“We were facing four or five years of litigation on this,” Commissioner Sam Greenberg said, during which time little income would have been received on the land. As in most such leases, the rate will be renegotiated after five years anyway, he noted.