LOS ANGELES WORLD AIRPORTS RESPONDS TO PROP O CRITICISM; THERE’S ALWAYS TWO SIDES TO A STORY

LOS ANGELES WORLD AIRPORTS RESPONDS TO PROP O CRITICISM; THERE’S ALWAYS TWO SIDES TO A STORY

LOS ANGELES WORLD AIRPORTS RESPONDS TO PROP O CRITICISM;

THERE’S ALWAYS TWO SIDES TO A STORY

(Los Angeles, CA – May 29, 2014)  For the past seven years, Los Angeles World Airports (LAWA) has actively leaned in to find a way to partner with the City of Los Angeles Bureau of Sanitation (LABOS) to develop the Proposition O Stormwater Treatment Facility on Los Angeles International Airport (LAX) property.

First, some background information.  Federal revenue diversion laws prohibit free use and transfer of airport property for non-airport purposes.  That means, the land on which the Proposition O facility would be built, is subject to the jurisdiction of the Federal Aviation Administration (FAA) and subject to federal restrictions, including revenue diversion laws and regulations.  The consequences of violating diversion laws are significant, and may include substantial fines and penalties the City of Los Angeles would have to pay out of the General Fund.    

When originally designed, LABOS assumed there would be no land costs associated with using a portion of the LAX Northside property for the Treatment Facility.  However, LAX can’t give land away for free; again it would be a violation of federal law.  Nonetheless, LAWA sees tremendous value in developing a facility on LAWA property that would treat City of Los Angeles stormwater runoff.

Working with LABOS, the City Attorney’s office, and other parties, LAWA crafted a Memorandum of Agreement to transfer approximately 24.6 acres of LAWA property to the Los Angeles Bureau of Sanitation.  The Proposition O Facility would be redesigned to capture both City of Los Angeles stormwater runoff in Westchester/Playa Del Rey and LAWA’s stormwater runoff from the north and south east portion of airport property.  It’s a win-win situation for all, enhancing the treatment value of the facility and creating an airport link to the project for FAA purposes.  In return for transferring the property to LABOS, and in lieu of constructing independent below-ground facilities at LAX, LAWA would achieve compliance credits for City Standard Urban Stormwater Mitigation Plan (SUSMP) and/or Low Impact Development (LID) for future development projects at LAX.

In February 2013, LAWA submitted the proposal and request to FAA to release the land to LABOS.  LAWA secured appraisals for the property, agreed to contribute approximately $9 million to upgrade and redesign the Prop O Project to accommodate LAWA stormwater flows, and included it as an allowable land use and facility as part of the LAX Northside Plan Update.  What’s more, LAWA included additional air quality analysis and grading activities associated with the ultimate construction of the Proposition O Facility in LAWA’s environmental impact report for the LAX Northside Plan Update.

Despite a strong argument to justify approval of the transfer, the FAA denied the proposal.  In its rejection, FAA stated that “any proposed land transfer to another City of Los Angeles Department (such as LABOS) in exchange for the present value of future, avoided costs to LAWA without financial or in-kind compensation by LABOS to LAWA would be problematic.”  However, FAA did offer other options for the LA Bureau of Sanitation to consider. 

In subsequent meetings with Bureau representatives, LAWA proposed several additional options to address FAA revenue diversion issues.  But LABOS never formally responded.  LAWA later learned the Prop O Oversight Committee was informed LABOS had elected to pursue the project on other property. 

LAWA continues to support completion of the Proposition O Project on LAWA property at LAX.  While the facility must comply with federal requirements, we believe the benefit to treating City stormwater runoff far outweighs the complexity of resolving the federal regulatory issues.  We do not believe LABOS should be discouraged by the federal requirements, and LAWA continues to be available to work with our sister city agency to find a workable solution.