Long Beach Airport Defects Spark Legal Battle

A $10-million city effort to rebuild a dilapidated 17-acre section of the Long Beach municipal airport is being hampered by construction defects that have triggered a legal battle between airport tenants and a prominent developer.

At the center of the dispute are new hangars built on city-owned land by WestLand Parcel J Partners, which entered into an exclusive agreement with Long Beach in 1997 to improve and lease the property.

Plans call for about 120,000 square feet of hangar space and aircraft tie-down areas as well as 30,000 to 40,000 square feet of commercial space. An office building and restaurant also have been proposed.

But airport tenants say the partnership’s work has been so shoddy that new concrete aprons and hangar floors will have to be replaced because they are already cracking under the weight of aircraft and fuel trucks.

Two of the airport’s longtime occupants, Aeroxec Services Inc. and the Long Beach Flying Club, took their allegations of poor workmanship to arbitration a few months ago and won an $819,000 judgment plus legal fees of at least $250,000.

“Everything the contractor did was a problem,” said William H. Kerry, the attorney for Aeroxec and the flying club. “He built what he wanted to build, not what he was supposed to build under the contract. Talk about a nightmare for two nice people.”

The Long Beach Flying Club, which has 600 members and 22 airplanes, is owned by Candace Robinson. The club has been at the airport for 25 years. Ray Guy and his family own Aeroxec, an aircraft maintenance company, which has been a tenant for 18 years.

In December 1998, Aeroxec and the flying club signed contracts with WestLand. Aeroxec agreed to pay almost $645,000 for the improvements and sign a 40-year lease, while the club agreed to pay about $464,000. Together they paid $110,000 to help WestLand secure financing for the improvements.

Experts called by the tenants during arbitration testified that builders did not properly compact the soil, and that the concrete used in the work lacks steel reinforcing bars, which means it is too weak to support planes and fuel trucks. WestLand had little or no experience in aviation-related construction when it was hired by the city.

A Los Angeles Superior Court judge certified the arbitration award last summer. But WestLand has yet to pay up and wants Aeroxec and the club off the property. The partnership is preparing to appeal the arbitrator’s judgment.

“We stand by all our products,” said David W. Neary, who manages WestLand. “We are going to complete a development that is a positive factor for the community and the airport in general. We are a substantial member of the community and intend to be for a long time.”

The 38-year-old contractor is a key player in the South Bay-Long Beach chapter of Habitat for Humanity, which builds homes for the poor. Neary also is active in the Long Beach Chamber of Commerce and is president of Leadership Long Beach, a civic organization that trains young professionals for community service.

Neary argues Robinson and Guy are squatters and should not be entitled to collect damages because they did not complete the execution of their leases in the three-day period required by the arbitration award. Consequently, his attorneys say, they have no property rights.

Kerry said closing escrow on the leases in three days was impossible. Extensive paperwork had to be prepared by lenders, he said, and an agreement between the city and his clients’ banks had to be obtained.

The arbitrator, Kerry said, later told both sides to close escrow as soon as possible. WestLand, he added, then canceled the contracts unilaterally to sabotage escrow and unsuccessfully tried to evict the flying club and Aeroxec.

To complicate matters, the WestLand partnership has resorted to federal bankruptcy court to force out Robinson and Guy. WestLand filed a Chapter 11 action, which gives financially strapped companies time to reorganize and pay their debts.

Robinson and Guy have sought dismissal of the action, contending that WestLand is misusing the bankruptcy process. Hearings are scheduled for December, but both sides are considering mediation.

If Neary prevails in evicting the two tenants, the owners of Aeroxec and the flying club fear they will suffer considerable financial losses or be put out of business without collecting a penny from WestLand.

“It’s really hard to live this way,” Robinson said. “It feels like at any moment I can be thrown out of here. It all seems so tenuous. . . . If we don’t win, there is something wrong with the system.”

As the project becomes mired in litigation, airport officials face the prospect of having substandard hangars on city property, which would make them difficult to lease unless tenants can live with the problems or repair them.

The city of Long Beach already has given WestLand $1.6 million in public funds, and continues to retain the partnership despite its bankruptcy filing and the arbitration award.

Kerry says four of the eleven hangars built so far have problems with their concrete aprons, floors and tie-down areas. City officials say they are not sure whether there are similar problems with the unleased facilities.

“I don’t know the quality of the unoccupied hangers,” said Vincent Coughlin, a project manager for the city’s Community Development Agency. “We need to make sure the hangars were built to what we had agreed to. Whether there has been an inspection is a good question.”