Airport Commission Delays Action on Project

By On February 9, 2015

(Photo by Ross A. Benson)

(Photo by Ross A. Benson)

After firing a warning shot to the Burbank City Council on Friday in a form of a letter that Mayor David Gordon called both inflammatory and controversial, the Burbank, Glendale Airport Commission delayed their action regarding the offer sheet proposed to Burbank.

While the letter has still not been made public as of Monday at noon as was promised at the Sunday City Council meeting, the letter from Executive Director Dan Feger implied that the Authority would basically unhook the new terminal and the B-6 property and immediately put it on the open market unless the city takes immediate action in the negotiations.

Burbank called a special meeting of the City Council on Sunday night (the first one in about 20 years) and unanimously voted for the airport to delay their action on Monday until all three Burbank commissioners could be present (Bill Wiggens is on a family trip) and the city would not accept all of the condition of a term letter sent in November.

(Photo by Ross A. Benson)

Authority President Steve Madison (Photo by Ross A. Benson)

Commission President Steve Madison begun the Monday morning meeting by stating that the Authority values the membership of all three cities and that the action by the City Council was heard loud and clear. After only three speakers addressed the commission in the room before a closed session was called that lasted for about an hour.

Burbank Commissioner Don Brown welcomes newly appointed commissioner Ray Adams to his first meeting (Photo by Ross A. Benson)

Burbank Commissioner Don Brown welcomes newly appointed commissioner Ray Adams to his first meeting (Photo by Ross A. Benson)

After returning, Madison announced that Resolution 462 would be delayed in respect to the vote by the City Council. Both Burbank Commissioners, Don Brown and newly appointed Ray Adams were in attendance.

No word was given when the item would be brought back but the agreement with the City expires on March 15.

Here is the content of Resolution Number 462 as presented on the Authority’s agenda for the Monday meeting that the authority wanted the council to immediately act upon:

WITHDRAWAL OF TRUST PROPERTY (OPPORTUNITY SITE) APPLICATIONS;
COMMENCEMENT OF TRUST PROPERTY SALE PROCESS;
ADOPTION OF RESOLUTION NO. 462 MEMORIALIZING COMMITMENTS
TO THE CITY OF BURBANK FOR THE FUTURE OF THE AIRPORT

SUMMARY

Staff seeks Commission approval of the following: (i) authorization for the Executive Director to withdraw the Authority’s entitlement applications for the approximately 59-acre former Lockheed Plant B-6 Trust Property (“Trust Property”) (sometimes referred to as the “Opportunity Site”); (ii) authorization for the Executive Director to put the entire Trust Property on the market with an option to subtract three acres if a deal is reached with the City of Burbank (“Burbank”) for a replacement terminal on the Lockheed Plant B-6 Adjacent Property (“Adjacent Property”); and (iii) adoption of the attached Resolution No. 462, a Resolution of the Burbank-Glendale-Pasadena Airport Authority Commission Memorializing Commitments to the City of Burbank Regarding the Burbank Bob Hope Airport.

These actions are the next step towards the Authority’s objective of reaching a consensus with Burbank, its voters, the City of Glendale (“Glendale”), the City of Pasadena (“Pasadena”), the airlines, and the Federal Aviation Administration (“FAA”) on an Adjacent Property replacement terminal. To this end, Resolution No. 462 (“Resolution”) addresses three commitments.

First, the Resolution memorializes the Commission’s willingness and commitment to indefinitely and unilaterally provide protections to Burbank (i.e., protections not incorporated into a Joint Powers Agreement (“JPA”) amendment) until such time as Burbank takes a hostile action against the Authority. These protections provide quality of life benefits for the surrounding community and continue to fulfill the Authority mission statement to “be a good neighbor.”

Second, the Resolution memorializes the Commission’s commitment to build a replacement passenger terminal building with no increase in the number of aircraft gates or public automobile parking spaces, consistent with the discussions of the Airport Land Use Working Group and the public presentations made to Burbank, Glendale, and Pasadena.

Finally, the Resolution memorializes the Commission’s commitment to give Burbank seven more weeks to accept the Authority’s November 21, 2014, term sheet proposal for permanent protections for the Burbank community and vested entitlements for the Authority to construct a replacement 14-gate passenger terminal building on the Adjacent Property.

BACKGROUND

In October 2011 the Authority and Burbank amended the Development Agreement to extend the term until March 15, 2015, and to permit the parties to publicly discuss a vision for the future of the Airport. The vision includes:

\STAFF REPORTS \AUTHORITY12-9-2015 WITHDRAWAL OF TRUST PROPERTY (OPPORTUNITY SITE) APPLICATIONS; COMMENCEMENT OF TRUST PROPERTY SALE PROCESS; ADOPTION OF RESOLUTION MEMORIALIZING COMMITMENTS TO CITY OF BURBANK FOR FUTURE OF THE AIRPORT

  • Development of the Trust Property;
  • Entitlement for construction of a replacement 14-gate terminal building on the Adjacent Property; and
  • Amending the JPA that created and governs the Authority to give each city the power to veto certain Commission actions that could change how the Airport impacts the quality of life for the surrounding community in the future.

Authority and Burbank staff, in conjunction with the Airport Land Use Working Group, subsequently met numerous times to negotiate a term sheet that would form the basis for a new Development Agreement and entitlements for a replacement terminal on the Adjacent Property. Additionally, the Authority and Burbank conducted multiple public presentations regarding the Authority’s desire to sell the Trust Property in an entitled condition, which would allow a future developer to build on the site without further discretionary review by Burbank. As part of that process, the Authority engaged consultants to prepare various conceptual plans and those plans were reviewed by Burbank staff and the Airport Land Use Working Group over many months prior to the Authority’s preparation and submission of formal applications.

On November 14, 2013, at a joint meeting, the Commission and the Burbank City Council approved the basic characteristics of an Adjacent Property replacement terminal and a Trust Property development for purposes of further study and the preparation of an Environmental Impact Report (“FIR”). The Trust Property portion was to study development of up to approximately three million square feet of mixed uses (Office, Flex/Industrial, Retail and Hotel) based on economic analysis predicated on estimated demand for such facilities over a 15-year time period.

Due to community concern about the three-million-square-foot proposed development on the Trust Property, including comments from some Burbank Councilmembers, the Authority decided to reduce the proposed density. In December 2013 the Authority submitted to Burbank entitlement applications for an Adjacent Property replacement terminal and for Trust Property development. The Trust Property applications proposed a reduced project of approximately 2.3 million square feet of mixed uses that would be developed and absorbed into the market over a ten-year time period.

The attached Exhibit 1 shows the configuration of the Trust Property, which is comprised of three blocks of land. Two of the blocks are zoned M-2 and total approximately 42 acres; the third block is zoned Airport and is approximately 18 acres. The conceptual layout for the Trust Property development contemplated that approximately three acres of the site would be transferred to the Authority to accommodate a special placement for parking structures that would serve the Adjacent Property replacement terminal. That special placement was a response to Burbank staff’s desire for a “view corridor” allowing the replacement terminal to be seen from Hollywood Way. It is possible to configure the parking structures in a manner that does not require land from the Trust Property, but those alternative configurations likely would not preserve the view corridor feature.

On February 3, 2014, Authority staff gave the Commission a public presentation regarding the proposed terminal alternatives for environmental analysis. A copy of that presentation is attached as Exhibit 2. Page 3 of that presentation identified Alternative 1, which states that the development of a terminal on the Southwest Quadrant of the Airport would not include a

\STAFF REPORTS \AUTHORITY\2-9-2015 WITHDRAWAL OF TRUST PROPERTY (OPPORTUNITY SITE) APPLICATIONS; COMMENCEMENT OF TRUST PROPERTY SALE PROCESS; ADOPTION OF RESOLUTION MEMORIALIZING COMMITMENTS TO CITY OF BURBANK FOR FUTURE OF THE AIRPORT

change in governance and that the Opportunity Site would be sold with its current zoning. This presentation was also made to the city councils of Glendale and Pasadena. Burbank staff declined Authority staff’s offer to make that presentation to the Burbank City Council.

In March 2014 the Authority and Burbank executed a Memorandum of Understanding (“MOU”) to cooperate and coordinate their respective efforts regarding the EIR preparation.

In June 2014 Authority staff shared with Burbank staff comments regarding the Burbank’s draft staff report on alternatives for the EIR. Authority staffs comments clearly stated the position of the Commission, Glendale, and Pasadena that JPA amendments would only be granted for the entitlement of a replacement terminal on the Adjacent Property, and not for a replacement terminal on the Southwest Quadrant. Burbank staff did not incorporate Authority staff’s comments in the final version of the Burbank staff report.

In July 2014 the Authority put the EIR on hold pending reaching a resolution with Burbank regarding the project description and project alternatives. During the ensuing time period, Burbank staff and Authority staff continued to negotiate the language of a term sheet.

AUTHORITY TERM SHEET PROPOSAL

On November 18, 2014, President Madison and Vice President Quintero met with

Mayor Gordon and Vice Mayor Frutos on the term sheet. A recap letter summarizing that meeting was sent to Burbank on that same date and is attached as Exhibit 3. That recap letter restated the position of the Commission, Glendale, and Pasadena that amendments to the JPA to change governance of the Authority would only be approved if Burbank approves entitlements for a replacement terminal on the Adjacent Property and would terminate if the Authority was forced to build a replacement terminal on the Southwest Quadrant.

Authority Counsel subsequently sent the City Attorney a November 21, 2014, term sheet representing the Authority’s proposal for this “deal.” A copy of that term sheet is attached as Exhibit 4. Highlights of the Authority’s November 21, 2014, term sheet proposal include the following:

Consensus Voting

The JPA will be amended to require affirmative votes by two Commissioners appointed by each city in order for the Commission to take any of the following actions:

  • Increase the number of commercial airline passenger gates above 14;
  • Create or construct any remote parking positions for air carrier aircraft;
  • Approve any expansion of the existing terminal, any expansion of the replacement terminal beyond 355,000 square feet, or any relocation of airline passenger related airport functions from the replacement terminal;
  • Amend the Authority’s Noise Rules and the manner in which they have been enforced since 1994 except to implement the mandatory curfew sought in the Authority’s Part 161 Application;
  • Amend the Authority’s voluntary curfew or the manner in which it has been applied since the voluntary curfew was adopted (prior to the creation of the Authority) except to implement the mandatory curfew sought in the Authority’s Part 161 Application;
  • Abandon support for congressional authorization for the imposition of the mandatory curfew sought in the Authority’s Part 161 Application. This commitment would not preclude the Commission from opposing legislation that would authorize the imposition of noise and/or access restrictions that differ from the mandatory curfew sought in the Authority’s Part 161 Application or that would limit funding for the FAA to enforce federal law at the Airport;
  • Approve the acquisition of real property except for the following: (a) airspace easements, utility easements, and avigation easements; (b) an access easement, airport parking restriction, view corridor easement, and other interests in the Trust Property that facilitate the construction and operation of the replacement terminal; and (c) acquisitions approved by Burbank; and
  • Approve an airport management contract or lease with a maximum term in excess of 35 years.

Delegation

The JPA amendments will be binding on the Commission’s successors and assignees including the Authority’s management company.

Effective Date

The JPA amendments will become effective shortly after a positive Measure B vote if there is no litigation challenge.

Termination of JPA Amendments

The JPA amendments would all be automatically terminated if Burbank takes certain specified hostile actions against the Authority to stop or impede construction and operation of a replacement terminal. Additionally, any particular JPA amendment that is deemed invalid by the FAA or a court would automatically terminate. However, the Authority would be obligated to defend the validity of that particular JPA amendment until a final appellate court decision is rendered, and the other JPA amendments would remain in effect.

Transient Parking Tax

Burbank could not increase the transient parking tax, as applied to the Authority’s parking lots, beyond the current 12% rate.

Duration of Development Agreement

The new Development Agreement would have a ten-year term, with up to three five-year extensions in the Authority’s discretion.

Use and Sale of Trust Property

Burbank would allow temporary uses to continue on the Trust Property until the site is sold and would consider extending the sale deadline so that Burbank can complete a specific plan for the site and the Authority can continue generating rental revenue.

Retention of Portion of Trust Property

The Authority would obtain title to approximately three acres of the Trust Property for use in the Adjacent Property replacement terminal project. This additional increase in the acreage owned by the Authority would be offset by elimination of all uses, including parking uses, on the approximately 5.3 acre Parking Lot B.

ACTION ITEMS

Because the Development Agreement is set to expire on March 15, 2015, and despite discussions between Burbank and the Authority over the last two years that have not yet resulted in complete consensus between the parties, the Authority feels compelled to take public action prior to the pending expiration date so that its position and conduct cannot be misunderstood or misinterpreted. To show that the Authority is listening to, and is sensitive to the input of the community from its outreach efforts, the Authority has determined that it will withdraw its Trust Property entitlement applications.

The Authority will begin the process of selling the Trust Property in accordance with the requirements set forth in the Amended, Restated, Superseding, and Combined Escrow and Trust Agreement (“Trust Agreement”).

Further, the Authority remains committed to addressing the pressing need to replace its existing 85-year-old, outdated terminal building with a modern terminal that satisfies all current building safety design standards, but with the same number of aircraft gates and public parking spaces as the existing terminal.

The Authority seeks Burbank approval pursuant to Measure B of a replacement 14-gate terminal on the Adjacent Property consistent with the Authority’s November 21, 2014, term sheet proposal and consistent with terminal layout previously presented at the joint session of the Burbank City Council and the Commission on November 14, 2013.

The Authority will, by resolution, immediately implement the protections identified in that November 21, 2014, term sheet proposal so that these protections are in place prior to the expiration of the Development Agreement. It is the Authority’s intent that these protections will remain in effect indefinitely absent a hostile act by Burbank as more fully set forth in the draft Resolution.

TIME PERIOD FOR CONSIDERATION OF TERM SHEET

The Resolution provides for the automatic expiration of the Authority’s November 21, 2014, term sheet proposal upon the occurrence of certain events. Burbank’s failure to accept the proposal by March 31, 2015, in the manner described in the Resolution is one such event. If Burbank accepts the proposal but the parties do not complete drafting of the documents (a new Development Agreement, entitlements, and Measure B language) by May 31, 2015, then that too would cause expiration of the proposal. The proposal also would expire if the parties complete the drafting and Burbank does not hold a Measure B election on an Adjacent Property replacement terminal within one year of the Authority’s certification of the EIR. Upon any expiration of the proposal, the Resolution requires the Executive Director to notify Glendale and Pasadena in writing that the Commission no longer supports amending the JPA.

However, as long as Burbank does not take a hostile action against the Authority, the protections afforded by the resolution will remain in place, even if Burbank does not accept the term sheet proposal.

CALIFORNIA ENVIRONMENTAL QUALITY ACT

Authority staff has determined that it can be seen with certainty that there is no possibility that the adoption of the Resolution may have a significant effect on the environment. The Resolution does not approve a project or authorize construction and, in fact, preserves the status quo. The Resolution is therefore exempt from the environmental review requirements of the California Environmental Quality Act pursuant to Section 15061(b) (3) of Title 14 of the California Code of Regulations. The sale of the Trust Property is required by the Trust Agreement, which has been subject to prior environmental review.

FUNDING

If Burbank accepts the Authority’s November 21, 2014, term sheet proposal by March 31 as described above, there is sufficient funding in the current FY 2014/2015 budget under the Replacement Terminal line item to restart the EIR.

Authority staff will need to develop a revised budget for the balance of the current fiscal year and for FY 2015/2016 after consultation with the EIR consultant for the revised scope of work.

STAFF RECOMMENDATION

Authority staff recommends that the Commission approve the following: (i) authorization for the Executive Director to withdraw the Trust Property entitlement applications;

(ii) authorization for the Executive Director to put the entire Trust Property on the market with an option to subtract three acres if a deal is reached with Burbank for an Adjacent Property replacement terminal; and (iii) adoption of the attached Resolution No. 462, a Resolution of the Burbank-Glendale-Pasadena Airport Authority Commission Memorializing Commitments to the City of Burbank Regarding the Burbank Bob Hope Airport.