CAA: GA News, "Rents could take off at Van Nuys Airport"

["Stephen Irwin" <stepheni@xxxxxxxxx>]

Thursday, January 25, 2001

Rents could take off at Van Nuys Airport
By Alexa Haussler
Los Angeles (CA) Daily News


VAN NUYS -- Los Angeles officials want to raise rents for businesses at the
Van Nuys Airport by more than 70 percent a year to make up for $4 million in
losses on its operation, the Daily News has learned.

Administrators with Los Angeles World Airports say they need to cover the
airport's costs by hiking rents from $14,500 per acre per year to $25,000.

The plan, to be discussed at a closed-door meeting today, has left tenants
and neighbors questioning whether airport number-crunchers are using fuzzy
math. They accuse the city of trying to drive small businesses out of the
airport with the rent hike.

"Believe me, (the airport) is not a losing venture," said Mark Sullivan,
owner of Sky Trails Aviation, a business he has operated at the airport for
15 years. "To me, it's highly unlikely that the Van Nuys Airport is losing
money on its own."

Jim Dunn, president of the Van Nuys Airport Association and chief executive
of the Airtel Plaza Hotel at the airport, confirmed that representatives of
the association and city will hold a private negotiating meeting today. He
declined to comment further.

"It's under negotiation and discussion, and it's a little too early to
comment," he said.

Administrators for Los Angeles World Airports, which is the city's airports
department, earlier this month told a commission studying the possible
breakup of the city that the Van Nuys Airport's $7.75 million in revenues
isn't enough to cover its expenses.

Karen Sisson, chief financial officer for the airports department, said the
primary source of revenue for Van Nuys Airport is rent from aviation-related
businesses, along with a small amount of income from concessions.

"The obvious answer is the revenues don't cover the expenses," she said.

Airport neighbors and Valley business leaders say the city's number
crunchers use distorted estimates in claiming the airport is losing money
rather than pumping it into the city's economy.

"There are a number of us over the years who have always felt that it is
very skewed, and it's not realistic," said Don Schultz, president of the Van
Nuys Homeowners Association and a member of the Van Nuys Airport Citizens
Advisory Council.

As proof, they point to the department's own Web site, which says that a
1998 economic study found that the airport contributes nearly $1.2 billion
annually to the Southern California economy and creates 10,027 jobs.

Still, airport officials are using the reported losses to justify a proposal
to increase rents.

"Essentially what it would do is probably drive the little guys off the
airport, and the only people that would be left are (those with) corporate
jets," Sullivan said.

At Santa Monica Airport, which also caters to private and commercial
airplanes, the rate varies from $15,681 to $43,560 per acre per year. The
favorite locations cost the most.

The future of Van Nuys Airport, which has been the constant target of noise
complaints from neighbors for years, is one of the major issues for those
considering the secession of the San Fernando Valley from the city of Los
Angeles.

Officials from the Local Area Formation Commission, the agency studying the
breakup, have said they are not sure whether consultants will recommend a
takeover of the airport by a new city. Another stumbling point could be the
federal government, which licenses the airport to the city of Los Angeles.

Valley Voters Organized Toward Empowerment, the group that pushed for the
secession study, has not taken a stand on the airport issue, said Richard
Close, president of the Sherman Oaks Homeowners Association and chairman of
Valley VOTE.

Close said he personally thinks a Valley city should operate Van Nuys
Airport to make sure that the area reaps the economic benefits and that
neighbors' feelings are considered by airport administrators.

"I'm suspicious as to the motive of the city (officials) when they say that
they are losing this money," Close said. "I think Los Angeles city may try
to keep the Van Nuys Airport so they can dump the noisy planes into the San
Fernando Valley and they can make sure the economic development occurs
around LAX, rather than around the Van Nuys Airport."

More than 100 businesses are located at Van Nuys Airport, including six
major fixed-base operators and several companies that provide aviation and
flight-related services, such as aircraft storage and parking, aviation
fuel, aircraft sales, flight instruction, aircraft charter and aircraft
maintenance.

Sullivan said he believes the city's bookkeepers have charged Van Nuys
Airports for costs at some of the city's other airports. For example, he
suspects that all costs of the Van Nuys Airport Flyaway program are
attributed to Van Nuys Airport, although it is a service that shuttles
passengers to and from Los Angeles International Airport.

Sisson, the airport department CFO, denied his claim, saying that LAX
revenues from landing fees help cover costs at Van Nuys.

Sullivan remains skeptical.

"The airport (administration) leaves us completely out of the loop about its
budget," Sullivan said. "We don't know where the expenses are going or where
they are derived from."

   Post your opinion on this story in the CAA General Aviation Forum
http://www.californiaaviation.org/cgi-bin/dcforum/dcboard.cgi?conf=DCConfID2

*****************************************