"Rialto Airport pact inching along"

["Stephen Irwin" <stepheni@xxxxxxxxxxxxxxxxxxxxxx>]

Tuesday, April 3, 2007

Airport pact inching along
City expecting $26 million profit from Renaissance Rialto
By Jason Pesick
The San Bernardino (CA) Sun


RIALTO - To make way for Renaissance Rialto, the city and the project
developer must pay $49.5 million to San Bernardino International Airport,
under a proposed agreement. 

Rialto officials had expected to pay closer to $30 million and some said
they were not thrilled with the new price tag. 

The amount was a result of the negotiating parties' agreement that the
airport is worth $120 million, not an appraised price. That's nearly twice
the $66 million the city will receive for the property. 

But in the complicated exchange, Rialto is guaranteed a profit of $26
million, but officials had hoped for more. 

"It bothers me, but we've also got to make this work for SBIA," Councilman
Ed Scott said of the difference. 

The agreement between SBIA, Rialto and Lewis-Hillwood Rialto Company LLC -
the project developer - was to be voted on tonight, but City Council members
asked to postpone the matter. 

Scott said he was still waiting to review a final version of the agreement
before voting. 

The goal of the project is a 1,500-acre master-planned area of housing,
retail, schools and mixed use. 

Lewis-Hillwood, a joint venture of the Lewis Group of Companies and the
Texas-based developer Hillwood, and the city want to close the Rialto
airport to make way for Renaissance Rialto, a massive mixed-use development.


The project will be located along the soon-to-be-completed Interstate 210
extension. Renaissance is an aggressive stab at boosting the city's economy
and improving its image. 

In 2005, Congress passed legislation allowing Rialto to close the airport.
For years, Rialto had attempted to close the airport but could not obtain
permission from the Federal Aviation Administration. 

The legislation allowed for the airport to close as long as SBIA was paid 45
percent of the fair market value of the airport property. The negotiated
value of the property was $120 million, but $10 million of that will be
deducted to pay for preparing the site for development. 

That means the city and Lewis-Hillwood will have to pay $49.5 million. 

Even though the parties agreed on the $120 million number, Rialto and
Lewis-Hillwood previously agreed that the value of the airport property was
about $66 million. The value on which Rialto now is basing its payment to
SBIA is almost twice as high as the amount Lewis-Hillwood will have to pay
the city for the property. 

The difference is because the city estimated the property's value as of
March 2005, Scott said. 

The $120 million number was the result of negotiations between the parties,
said Redevelopment Manager Greg Lantz. 

In order to complete the Renaissance project, Lewis-Hillwood must buy
Rialto's airport from the city. After all the money changes hands in the
complex deal, Rialto is guaranteed to make $26 million. 

Plans for the project should come before the council late this year. 

SBIA will spend $4 million to improve its infrastructure and $10 million to
accommodate tenants from Rialto's airport. 

The relocation of the tenants from Rialto's airport should begin later this
year, said Robb Steel, the city's economic development director. 

Businesses at the Rialto Municipal Airport pay rents below market value, he
said, because the city froze rents. 

In order to help them cope with increased rents in their new locations,
Rialto will give them assistance paying the increased rents for two years. 

A relocation plan released by the city last month spells out the assistance
the airport tenants will receive, including moving costs and the cost of
setting up shop at the new location. 

In addition to the influx of money, SBIA stands to gain more tenants when
the Rialto airport closes. 

"This will help us significantly," said Mike Burrows, SBIA's assistant
director. SBIA's commission is likely to vote on the agreement at its next
meeting on April 11, he said. 

In addition to considering the closure agreement, the council was scheduled
to consider other changes to the deal with Lewis-Hillwood. 

One would be that the city's redevelopment agency would provide the
financing for much of the cost of the sale of a 53-acre property next to the
airport. Lewis-Hillwood would repay that price, estimated at $16 million,
with interest. 

Other revisions to the contract between Rialto and Lewis-Hillwood would
result in the city receiving $5.6 to $6.5 million less from the developer. 

Councilman Joe Baca Jr. said Monday he had some questions about what the
council was scheduled to vote on. He said he wants to find out exactly why
the city's estimated value of the airport is so much lower than $120
million. 

But, he said, his main concern is what Renaissance Rialto eventually has to
offer. 

"I'm excited about it, but I'm still concerned about the content."

   Post your opinion on this story in the CAA General Aviation Forum
http://www.californiaaviation.org/dcfp/dcboard.php

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