Riordan Beats the Airlines at City’s Long-term Expense : Budget: Viewing LAX as simply a source of money for short-term political needs will hurt L.A.’s competitive position in the 21st Century.

Mayor Richard Riordan seems, at first glance, to have won his high-stakes game of chicken with the nation’s airlines. Seventy-five airlines, accounting for more than 90% of the traffic at Los Angeles International Airport, will pay the tripled landing fees imposed by the Airport Commission. So determined was the mayor to get his way that he threatened, in effect, to shut down the airport. The Department of Transportation took him seriously, sponsoring the talks that broke the stalemate.

The settlement is widely hailed as a major victory for Riordan. The mayor is certainly right in insisting that the city may impose reasonable landing fees to pay for legitimate airport budgetary needs. And his image as a populist and hard-headed businessman focused on the municipal bottom line has been strengthened. Riordan crusaded as David to the airline industry’s Goliath, attacking its addiction to “steep public subsidies” while demanding fair-share payments for airport services.

Still, the mayor’s handling of the LAX dispute raises serious questions about his judgment and leadership. The episode reveals a decision-maker prone to taking dangerous risks while avoiding hard political choices.

Riordan’s threat to lock out the non-paying airlines has been praised as a brilliant negotiating gambit. The financially stressed airline industry could ill afford the closure. An anxious federal government became a crucial ally. Yet, the low probability of the talks failing has to be weighed against the high costs of their potential failure. What would have happened if the negotiations had stalled and the airlines hadn’t blinked?

A virtual shutdown of one of the region’s chief economic engines during the worst downturn since the Great Depression would have been a disaster of the first magnitude. Directly and indirectly, LAX generates $37 billion a year in economic activity in Southern California--representing 10% of the region’s entire economy.

More than $90 million in daily business activity--three times the yearly value of the landing-fee increase--would have been lost. Shutting down 90% of LAX’s air traffic would have stranded 1,800 flights, 100,000 passengers, 3,500 tons of air cargo and 600,000 pounds of mail--each day. These costs would have been borne by Southern California’s recession-weary businesses and consumers. The region’s nightmare before Christmas might have arrived.

Yet, Riordan’s willingness to play Russian roulette with the region’s economy is only part of the reason to take a closer look at his performance. His attack on the airlines for making sweetheart deals raises questions about his own policy priorities and intentions at the airport. Raising landing fees is the Spruce Goose of airport reform. It may fly once, but it won’t go far. Under the increase, landing fees will now account for 27% of total airport revenue--up by roughly $28 million this fiscal year--compared with 18% under the old payment structure.

The much more difficult policy choices at the airport will involve long-term planning, infrastructure investment and development, and environmental mitigation. To date, Riordan has offered no significant leadership on such crucial issues as accommodating burgeoning passenger and air-cargo loads; moving along a bogged-down master planning process; raising the $2 billion to expand airport infrastructure, and mitigating the adverse effects of the expansion. If the mayor really wants to assure the region’s long-term economic health, he needs to be a far better spokesperson for airport development and investment.

Toward this end, Riordan would be well served to study the records of his predecessors in City Hall. They could teach him valuable lessons about how to lead Los Angeles.

George E. Cryer, who was mayor from 1921-29 and built City Hall, was a forceful advocate for public water, power and harbor projects. Fletcher Bowron, who reigned from 1938-53, pioneered the city’s airport and freeway systems. Tom Bradley had a global vision and preached airport and harbor expansion.

L.A.’s greatest mayors did not sell out the city’s long-term economic future for short-term budgetary benefit. They valued the city’s crown jewels--it’s proprietary airports, harbor and water and power departments--as investment catalysts generating regional growth. Each resisted pressures to turn these public engines of L.A.’s 20th-Century development into “revenue centers,” as Riordan now sees them, whose funds could be diverted, if the laws are changed, to balance the municipal budget or pay for more police.

Not since the Great Depression have so many hard decisions needed to be made concerning the region’s future. In the 1930s, Los Angeles moved forward, not backward. Resisting pressures to dismantle the Department of Water and Power and the Harbor Department, which would have drained them of their revenues, the city’s leaders underwrote a new generation of public investments, like the airport, that fueled the next 50 years of economic growth.

Los Angeles is at a similar crossroads and requires similar visionary leadership. For the city to move forward, a new generation of large-scale public investments--the airport, the port’s 2020 program, the Alameda Corridor project--must be undertaken to ensure the city an economic role in a global economy. Seattle and San Francisco--L.A.’s rivals to lead the new Pacific Rim economic order--are pressing for airport and harbor expansion to capture a greater share of the Asia-Pacific trade. With a pro-public-development mayor, Seattle is mounting a serious challenge to Los Angeles’ leadership. Archrival San Francisco also has plans to be a leading gateway to the Pacific. The Bay Area recently approved a $2.4-billion airport bond issue while keeping its landing fees at half the rate of LAX’s.

Playing a high-stakes game of chicken with the airlines, for a measly $28 million a year, when billion-dollar public development projects--such as LAX expansion--are on hold, is no way to lead Los Angeles into the 21st Century.