Dear Editor,
While I have no comment on the various political opinions expressed in Devan Sipher’s October 2 piece “Keep the circus on the Pier”, I wish to address misleading statements regarding the Airport Conversion Project (SMACP) that Devan attributed to Council candidate Ericka Lesley.
In essence the point made was that the City would lose money if it went ahead with the project. This is false. Quite the contrary, the City stands to derive a steady and greatly increased revenue stream as a result of the project.
Prior to 2015 aviation businesses sub-leased (at full commercial rates) much of the space they occupied at sweetheart City lease rates, to non-aviation business tenants. This had been going on since the 1984 agreement with the FAA, and drove over three decades of huge profits for ‘aviation landlords’. Meanwhile Airport losses due to running without such revenues caused the gradual build-up of $13 million in debt to the City’s general fund. Before the leasing and fee changes, the entire computed economic benefit of the Airport (which is 5% of the city’s total area) was described by then city manager Rod Gould as “equivalent to a medium sized strip mall”.
In 2015 this ended and the City took over all leases directly, eliminating the ‘aviation landlords’. Each year thereafter, instead of making a loss, the City made a profit leasing these spaces, which is now annually around $20 million. However, prior to closure of the airport, under FAA rules that money is locked up in the Airport Fund and cannot be used for other purposes. After closure, accrued and future revenue streams would be more than enough to cover the costs of running the park and even debt service on revenue bonds to build the park.
The airport space has become a major “Silicon Beach” hub and houses large high technology companies like Snap. The adaptive re-use of the aviation buildings is permitted by Measure LC and the tech-hub trend at the site is expected to continue, contributing to the city’s economy in many ways. Consider that beyond direct revenue to the city from taxes and leases, Snap, at 1,667 employees, is now #4 on the City’s top employers list.
Many aviation businesses still remain, and are paying reduced ‘aviation’ rents on their spaces. Upon closure, those spaces too could switch over to commercial rate tenants. The airport today leases 40 acres to non-aviation tenants. According to the SMACP site, with the elimination of all aviation building uses, available commercial lease space could double. This would create significant additional on-site annual lease revenue to the City. At the same time actual airport running costs (est. $6.5m/yr) will drop to zero.
In addition, it is well documented that Great Parks create value in surrounding areas, which will lead to increased tax revenues for the city and our schools.
How we raise the funds to build the park in the first place is under study by the Conversion Project. There are many potential revenue sources, starting with the accumulated monies in the Airport Fund on closure. Most importantly the project plan is designed to be incremental, we build out the Great Park as and when we can afford it, from a shovel ready initial plan on Jan 1, 2029. In the unlikely event that funding cannot be lined up by closure, the initial plan might be as simple and inexpensive as that used for Germany’s Tempelhof Airport: simply close the airport and allow public access as the land gradually reverts to nature.
No comparable large parcel of land exists on the Westside, particularly not one fully protected from all development (LC is part of the City Charter). The most expensive aspect of the park was purchased in the 1920s with a park bond; the value of that land is now conservatively estimated to be $2 billion. Santa Monica is park-poor, and with a rapidly densifying population we owe it to future generations not to squander the unique quality-of-life opportunity that bringing back Santa Monica’s Great Park represents. The good news is the City will make money doing it.
John Fairweather, Chair, Measure LC, Board Member, Airport2Park
