Liset Márquez, Staff Writer
Created: 10/08/2010 08:15:38 PM PDT

ONTARIO – The Los Angeles World Airports’ alleged lack of commitment to increasing traffic at L.A./Ontario International Airport has a cargo facility developer seeking up to $5million in damages.

Aero Ontario, an affiliate of Aeroterm, a Maryland-based developer and property owner, has filed a lawsuit against the city of Los Angeles and the Board of Airport Commissioners.

The company was expected to build a long- awaited air cargo facility at LA./ONT.

Aero Ontario’s lawsuit is the latest complaint over LAWA’s management of L.A./ONT. Ontario officials have complained that LAWA has not done enough to boost air passenger traffic. Instead, local officials claim, LAWA has diverted traffic to Los Angeles International Airport.

“It is now apparent to Aero Ontario that the city has not materially assisted and will not materially assist Aero Ontario in its efforts to place suitable cargo tenants at the Project,” lawsuit says.

Aero Ontario claims “the city has undermined and circumvented Aero Ontario’s efforts to place cargo tenants at ONT by itself, placing tenants at LAX or other LAWA-controlled airport properties without making any attempt to market the project.”

The lawsuit was filed in July in Los Angeles County Superior Court.

Between 2003 and 2008, Aero Ontario claims it spent $5 million trying to attract tenants and conducting a report to see if the project would create any environmental impacts.

Aeroterm is known for building and managing international airport facilities throughout the nation.

Originally scheduled to be completed between fall 2009 and spring 2010, the Pacific Gateway Cargo Center, a cargo operations area, was slated to boast up to 1million square feet of space, 400 truck docks, 16 aircraft parking places and possibly generate up to 850 jobs.

The gargantuan project rivaled the company’s developments at O’Hare International Airport in Chicago and John F. Kennedy International Airport in New York.

Aero Ontario officials said it paid Los Angeles $1.5 million when the lease was signed and it continued to pay several thousands of dollars a month in rent.

For years, LAWA officials publicly supported efforts to build the air cargo facility at L.A./ONT, even producing marketing materials for an Ontario State of the City event.

Aero Ontario claims that LAWA, because of its commitment to regionalization, had determined to emphasize and encourage the use of L.A/ONT for air cargo.

Los Angeles also promised to assist in relocating air cargo carriers and cargo movement to Ontario, the lawsuit claims.

The support from LAWA officials prompted Aero Ontario to proceed with an environmental report, and the company also attempted several pre-leasing meetings with potential cargo tenants.

By last September, the two agencies were discussing a possible restructuring of the lease.

At the same time, Aero Ontario claims LAWA officials were telling the Board of Commissioners that the discussion of diverting air traffic away from LAX to other airports was in their best interest and in keeping with the concept of redistributing air traffic.

Negotiations between the agencies took a turn in the opposite direction after a commissioners’ meeting in January, at which the the commission made it clear it did not completely support the lease with Aero Ontario.

In April, Aero Ontario filed a claim with the city of Los Angeles, attempting to seek the same monetary compensation stated in the lawsuit. The claim was denied.

Under the terms of the 40-year lease, the multi-tenant project was expected to be built in phases over the next decade, the first expected to have been completed within two years of the contract being approved.

LAWA stood to make $81million on the deal.

While the deal was inked in late 2007, terms of the lease had been under negotiation since June 2003.

Environmental studies for the project took longer than anticipated because of soil contamination at the old Lockheed Martin facility that previously occupied the property.

In the past, Aero Ontario officials cited the economic slowdown as affecting the roll-out of the cargo operations area. The facility would sit on 94 acres and provide a consolidated location for many cargo-related businesses.

Ontario Councilman Alan Wapner, the city’s liaison to the airport, said he was not surprised by Aero Ontario’s findings.

“It is consistent with what what we found, which is LAWA directs passenger traffic and air cargo to LAX,” he said. “Passenger traffic and air cargo have declined and the Inland Empire can’t afford it any longer.”

For the past two years, passenger traffic at L.A./ONT has dropped more than 47.5percent.

The airport in 2009 served 4.88million travelers, down from a peak of 7.2million in 2007, according to Los Angeles World Airports, which operates the Ontario airport.

Wapner, who only recently learned about Aero Ontario’s lawsuit, said the city will not get involved in it.

But if the city is successful in gaining control of the airport, Wapner said he would be interested in talking to Aero Ontario officials to see if they would be interested in restarting the project.

In September, the Southern California Association of Governments voiced its support for returning control of the Ontario airport to the city.

SCAG is the regional organization representing six counties and 189 cities. It undertakes planning and policy projects toward improving the quality of life in Southern California.

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