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"OCEANSIDE: Company trying to buy back property near airport"

Friday, May 23, 2008

OCEANSIDE: Company trying to buy back property near airport
The San Diego (CA) North County Times

OCEANSIDE ---- A company that sold a large chunk of property to the city in
2003 for airport improvements is now trying to buy the land back, casting a
shadow of uncertainty over the city's long-term plan to expand the airfield.

The company, Santa Monica-based AELD, informed the city Tuesday that it was
exercising its option to repurchase 14.7 acres of vacant land north of
Oceanside Municipal Airport's runway, officials said.

The company identified itself in the letter as the successor to the Deutsch
Co., which sold that property to the city for $2.8 million.

In the original purchase agreement, Oceanside gave Deutsch the right to buy
back the land at the same price ---- $4.25 per square foot ---- if the city
failed to use it in an airport project within five years, said Gary Gurley,
the city's general services manager.

The window closed this month and the property is still vacant. That means
the city may have to sell.

"We're going to need to discuss the matter with the council," City Attorney
John Mullen said Thursday.

The city has already contacted an escrow company as required by the purchase
agreement with Deutsch, Mullen said.

Meanwhile, the Federal Aviation Administration, which chipped in a $2.5
million grant for the city's purchase of the property, has said it would
oppose any change in ownership.

The buy-back letter comes at an inopportune time for airport supporters.
After years of stasis, the city's long-term plan to develop the 50-acre
facility had recently appeared to be picking up speed.

Last week, the City Council voted 4-1 to negotiate with a long-term lease
with a private company, Airport Property Ventures of Los Angeles, to operate
and upgrade the airport.

The company promised to make $21 million on improvements. That would include
roughly 174,000 square feet of hangars on the property that AELD wants to
take back.

Robert Clifford, a principal with Airport Property Ventures, said Thursday
that he was unaware of the letter. But his company always knew it was a
possibility, he said.

"Our plans are to move forward," he said of his company's negotiations with
the city. "Whether the north side is part of it or not, it's still a viable
airport," he said.

For now, it's unclear what AELD would do with the property. Because the land
is adjacent to an airport, there are limitations on how it could be used.

Reached Thursday by phone, company representative Dan Dart said that he has
had "preliminary discussions with the city." But he declined to comment
further, saying that he was in a meeting.

Federal Aviation Administration's spokesman Ian Gregor said by e-mail
Thursday that a letter the agency sent to Mayor Jim Wood last year
criticizes the buy-back provision in the sale contract.

"That provision is inconsistent with the purpose and conditions for the
FAA's funding of the purchase of the land," the letter said. "We would not
release it for sale."

Generally, Gregor said, if the agency "agrees to allow an airport to sell
land that it bought with federal grant money, the airport would have to pay
back that grant money."

But there's an important caveat:

"The key phrase here is 'if the FAA agrees.' " Gregor said.

Ben Myers, president of the Oceanside Airport Association, said Thursday
that his group of pilots and airport supporters has eagerly awaited
build-out of the airport's north side.

"Hopefully, the city can find a way to resolve this amicably," he said. "If
not, we're probably looking at a long court case and that doesn't sound very
good to me."

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