[Scroll down for further]

Consultant Jacobs Engineering summarized its findings in salient part as follows:

• [Jacobs "feasibility study" text] Market Demand -- Based on LGB’s competitive position in Southern California, as well as observed historic demand and econometric indicators, it is reasonable to assume continued international growth of the Southern California market, and a FIS Facility at LGB would provide opportunity for a share of the markets offered within the constraints of the Noise Ordinance. The Study concludes it is not predicted that having a FIS Facility will reduce domestic flight activity. The Market Analysis forecasted that demand for international flights, under the Airport’s existing slot regime, would result in approximately 379,281 annual FIS arriving passengers in Year Four following a three year ramp up period. International service would account for 12% or 6 of 50 flights in the first year and increasing to 16% or 8 of 50 flights by Year Four. These passengers would be new activity for LGB.

• Environmental Compliance Assessment -- The purpose of the assessment is to provide the City with an understanding of the types of technical studies and environmental compliance documents that may be required should the City decide to move forward with development of the FIS Facility. The assessment concluded that the FIS Facility could be accommodated within the impact envelope contemplated in the 2006 Terminal Area Improvement Project Final Environmental Impact Report No. 37-03 (State Clearinghouse No. 2003091112).

• Economic Impact of Long Beach Airport -- The Economic Impact Analysis used results from a 2016 tenant survey, business list analysis, interviews, LGB expenditures and forecast data within the IMPLAN database. The analysis identified the economic impacts of LGB and the potential contribution of a FIS Facility. The annual economic contribution of LGB and their tenants is approximately 45,000 jobs and $10.3 billion in output.

  The potential annual economic contribution of a FIS Facility is approximately 350 jobs and $36.4 million of additional output. The potential additional economic expenditures from international travelers is estimated to range between $57 million to $104 million during the five year establishment period following initiation of international service. The international business and tourist travel impacts are estimated to generate approximately 1,400 jobs and $185.6 million annually following the establishment period. Construction of the FIS facility would generate financial output valued between $31 million and $38 million depending on the selected option generating between 203 and 253 jobs

• Facility Concepts -- A FIS Facility is a single processing complex that evolved from the consolidation and integration of US customs, immigration, and agriculture operations, offices, and support functions. The FIS Facility unifies both passenger processing and baggage/cargo processing for safe and efficient flow of passengers and goods into and out of the United States. A FIS Facility includes a CBP security area to accommodate international air commerce designated for processing passengers, crew, baggage and effects arriving from, or departing to, foreign countries, as well as aircraft deplaning, ramp areas, and other restricted areas.

• Airport Scope and Capability -- Critical components of airside and landside infrastructure at LGB have been identified to support potential international flights. The runway and taxiway systems can support the probable fleet mix to fly to international destinations determined in the Market Analysis. LGB may have to construct new aircraft parking positions should LGB proceed with FIS Facility Option 1. In terms of landside infrastructure, removal of the island curb and reconfiguration of the lanes in front of the terminal for pickup and drop off will reduce congestion and allow for better vehicular flow.

• Financial Feasibility -- By reviewing LGB’s funding capacity and the projected demand for the potential FIS Facility, a financing plan was developed that included $3 million of Airport Passenger Facility Charge funding with the balance of the capital costs funded directly by JetBlue Airways as the primary user of the facility. The resulting FIS Facility charge required to cover the amortization of the net capital investment would be approximately $13 per FIS arriving passenger in 2020 (reflecting start-up costs) and then approximately $6 per FIS arriving passenger for the next ten years. The potential FIS Facility would be financially feasible as this fee level is in the range of FIS charges at comparable California airports.

• Security Risk Assessment -- The addition of international flights and construction of a FIS Facility does not negatively impact the risks to LGB and the Long Beach community compared with current risks from other Ports of Entry in the area. The complete elimination of risk is seldom possible, and LGB currently commits significant resources to provide a reasonable level of protection for the public. Regardless of the addition of international service, the risks to LGB should continue to be managed with a robust security operation.

Also among salient matters is text below from the City Attorney memo:

[City Attorney memo text]...[T]he development of an FIS facility would not increase aircraft operations from the Airport's current levels, modify the current allocation procedures at the Airport, increase the number of flights beyond the parameters defined in the Noise Ordinance, or affect aircraft safety. As proposed, any FIS facility would be designed to accommodate the operation of general aviation and commercial passenger air service to international destinations at LGB under the currently permitted number of flights. Any FIS facility project would not be intended to induce future growth or future demand; however, such a facility could serve international destinations that are not currently offered at the Airport. Further, any air carrier, commuter carrier, or general aviation operator would continue to be required to abide by all existing Airport regulations, including all provisions of the Noise Ordinance.

On March 31, 2015, JetBlue requested a written legal opinion from the FAA relating to whether the initiation of service to international markets at LGB and the establishment of an FIS facility would affect the Airport's continuing compliance with its federal obligations or impact the ANCA exempt and grandfathered status of the City's Noise Ordinance [cited exhibit attached, see link above]

As indicated previously, the FAA provided a written legal opinion that indicates the following: "[b]ecause there is no current or pl anned change to the City's noise ordinance, the facts presented do not justify any change in the FAA's conclusion that the City's noise ordinance is exempt from ANCA review because of the grandfathering provisions of ANCA." [cited letter attached, see link above]

As in past correspondence with the City, the FAA did not take a position on whether the City's Noise Ordinance meets Federal requirements for airport access and reserved the right to review that issue if challenged by an air carrier in the future. Although the existing regulatory provisions at the Airport are "grandfathered" under ANCA, any limitations placed on the origin or destination of flights at the Airport could arguably be determined by the FAA to be an amendment to the regulatory environment at the Airport that "reduces or limits aircraft operations" and, therefore, any such action or amendment would arguably not be exempt from ANCA and could jeopardize the grandfather status of the existing regulations. In addition, the City is required to "make its airport available as an airport for public use on reasonable terms, and without unjust discrimination, to all types, kinds, and classes of aeronautical uses." Grant Assurance 22(a); 49 U.S.C. 47107.

In summary, and as confirmed by the FAA in its recent letter to JetBlue, the FAA does not believe that the City's consideration or approval of an FIS facility at the Airport would jeopardize the Noise Ordinance's exempt and grandfathered status under ANCA...

Although Congress has made no attempt to alter the exempt status of the City's Ordinance, a Congressional modification or change to ANCA, or a Federal Court determination (which we believe to be unlikely) could potentially remove or modify some or part of the current regulatory restrictions governing operations at LGB. It should be noted that the above possibilities could occur whether or not an FIS facility is constructed.

Any argument that consideration of an FIS facility at LGB could result in the City losing regulatory authority, however, is speculating about some possible future loss of regulatory authority and cannot reasonably be linked or shown to be a possible effect in the context of the FIS facility consideration process.

We consider the threat of litigation and the potential invalidation of the Noise Ordinance because of the consideration or approval of an FIS facility at the Airport to be no greater than currently exists if an FIS facility was not located at the Airport. As has been frequently stated, there is no action that the City can reasonably take to prevent an air carrier or other interested party from filing a complaint in court or with the FAA at any time in an attempt to invalidate the Noise Ordinance. However, unlike the litigation that occurred in the late 1980's and early 1990's, the City now has an acknowledgement from the FAA that i ts exemption from ANCA continues to exist, and the City likewise would be able to rely on a Federal Court recognized settlement agreement and CEQA clearance directly relating to the enactment of the Noise Ordinance if the Ordinance is ever challenged in court or with the FAA. Some have postulated that by approving a FIS facility, economic competition by air carriers or other users of a customs facility could lead to litigation if all competing air carrier or general aviation interests could not be accommodated at such a facility. However, there are no facts to support this scenario, and it is just as likely tha t other economic factors, currently existing in theair carrier or general aviation industry could spawn litigation whether or not a customs facility is built and operated at LGB. That said, if there is a successful challenge to the Noise Ordinance, the City could re-institute a sound attenuation program to install sound insulation in homes and other noise sensitive uses located in high noise im pact areas. Under this type of program, the Airport would typically provide examples and demonstrations of replacement doors and windows, ventilation systems and other sound insulating construction. The City would then contract with the property owner to install the insulation in return for an avigation easement. The cost of these programs is often funded from the proceeds of the passenger facility charges (PFCs) upon approval of the FAA. Additional funding sources could include AIP Grant funds, LGB revenues and financing (LGB Bonds), or funds from the City's general fund.

CONCLUSION

It is our opinion that the City’s consideration of FIS facility improvements would not jeopardize the exempt and grandfathered ANCA status of the Noise Ordinance. However, if the Noise Ordinance is invalidated at some time in the future, the essential terms and existing regulatory conditions at the Airport would continue. Any relaxation of the current restrictions would, with certain limited exceptions, require action by the City, including full compliance with CEQA, and any planning or policy decisions by the City in the future would be required to take into account the unique history and unique operational characteristics at the Airport, as well as the residential and other sensitive land uses that are affected by Airport operations.

Advertisement

Advertisement

Reaction is pending from LBHUSH2 and Neighborhoods First, two grassroots groups that successfully argued several years ago to preserve LB Airport's boutique size (that travelers praise) when an Airport-hired consultant and some corporate interests recommended a conventional permanent terminal area facility roughly 30% larger than LB Airport has now.

City management has scheduled presentation of the report to the Council's Airport Advisory Commission (AAC) on Oct. 20, 2016 (Gas & Oil Auditorium, 2400 E. Spring St., 6:30 p.m.) and the Council's Economic Development Commission (EDC) on Tuesday October 25, 2016 (City Council Chambers, 333 W. Ocean Blvd., meeting begins 4:00 p.m., study session on report scheduled to begin at 6:00 p.m.)

The City Council is tentatively scheduled to receive the presentation and public input from the two commission meetings on November 15, 2016.

Although the customs facility was publicly requested by JetBlue (the airport's largest commercial carrier/tenant) in February 2015, internal Airport documents obtained under the CA Public Records Act by LBREPORT.com show that JetBlue representatives worked with now-former LB Airport management without Council publicly voted authority and in virtual public secrecy in much of 2013 to pursue the possibility of a customs facility. Twice during this period (August and November 2013), then-Airport management quietly sent then-Councilmembers memos summarizing what was taking place, but no then-incumbent disclosed the actions to the public entering the 2014 election cycle (when it would have likely become a major issue.)

Advertisement

Advertisement

After a new Council majority and new Mayor took office in mid-July 2014, the issue proceeded publicly. On July 7, 2015, six Councilmembers (Mungo [made motion], Gonzalez, Lowenthal, Price, Andrews, Richardson) voted to pursue the feasibility study despite public testimony roughly 2 to 1 opposed and over the dissents of three Councilmembers (Austin, Uranga, Supernaw.)

LBREPORT.com is reviewing the voluminous materials released today, and we'll have further to follow.

Developing.

Advertisement

Advertisement