Inland Empire officials on Thursday morning lodged a legal claim against Los Angeles in an attempt to force the city to hand them control of L.A./Ontario International Airport, which has been in serious decline.
The city of Ontario filed the claim -- the first step toward bringing a lawsuit -- a day after rejecting Los Angeles World Airports' offer to sell the once popular aviation hub for almost $475 million. Negotiations have been underway for several months.
In addition to the transfer of ownership, the action seeks to terminate a 1967 joint powers agreement in which the Los Angeles airport department became the operator of Ontario on the condition that it improve the facility. Los Angeles took ownership of the airport in 1985 at virtually no cost.
The 30-page claim alleges Los Angeles officials have violated the terms of the 1967 agreement, which calls on them to act in the best interests of Ontario International.
“Unfortunately, the current situation at Ontario is one of chronic neglect and mismanagement by its operator and the operator’s unwillingness to comply with its contractual and other legal obligations,” the claim states. “As a result, the financial and operational situation at Ontario is now dire and increasingly urgent.”
Passenger volumes have plummeted from 7.2 million in 2007 to 4.2 million last year, more than 40%. The latest projections indicate that the passenger level could fall below 4 million in 2013. Meanwhile, the number of travelers at other commercial airports in the region has been increasing.
Los Angeles officials assert the worst recession since World War II has prompted air carriers to reduce service and relocate flights to well-established markets at larger hubs, such as Los Angeles International Airport. Efforts to cut costs and lure airlines back to Ontario, they say, have been unsuccessful.
Ontario City Councilman Alan D. Wapner said the claim was filed out of legal necessity and does not preclude the two cities from working toward an agreement to transfer control to the recently established Ontario International Airport Authority.
Los Angeles estimates the airport’s market value is as high as $605 million. A study by Ontario’s consulting firm, Oliver Wyman, asserts the facility has a negative worth of $78 million to $104 million because of its uncertain future and severe decline in passengers and revenue.
“We remain hopeful of finding a mutually agreeable path to return Ontario to local control,” Wapner said. “At the same time, we are prepared, if necessary, to take additional measures to obtain control."