[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]

ECONOMIC IMPACT AND FUTURE MANAGEMENT
OF L.A./ONTARIO INTERNATIONAL AIRPORT

=======================================================================

(112-108)

FIELD HEARING

BEFORE THE

SUBCOMMITTEE ON
AVIATION

OF THE

COMMITTEE ON
TRANSPORTATION AND INFRASTRUCTURE
HOUSE OF REPRESENTATIVES

ONE HUNDRED TWELFTH CONGRESS

SECOND SESSION

__________

SEPTEMBER 27, 2012 (Ontario, California)

__________

Printed for the use of the
Committee on Transportation and Infrastructure

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COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

JOHN L. MICA, Florida, Chairman
DON YOUNG, Alaska NICK J. RAHALL II, West Virginia
THOMAS E. PETRI, Wisconsin PETER A. DeFAZIO, Oregon
HOWARD COBLE, North Carolina JERRY F. COSTELLO, Illinois
JOHN J. DUNCAN, Jr., Tennessee ELEANOR HOLMES NORTON, District of
FRANK A. LoBIONDO, New Jersey Columbia
GARY G. MILLER, California JERROLD NADLER, New York
TIMOTHY V. JOHNSON, Illinois CORRINE BROWN, Florida
SAM GRAVES, Missouri BOB FILNER, California
BILL SHUSTER, Pennsylvania EDDIE BERNICE JOHNSON, Texas
SHELLEY MOORE CAPITO, West Virginia ELIJAH E. CUMMINGS, Maryland
JEAN SCHMIDT, Ohio LEONARD L. BOSWELL, Iowa
CANDICE S. MILLER, Michigan TIM HOLDEN, Pennsylvania
DUNCAN HUNTER, California RICK LARSEN, Washington
ANDY HARRIS, Maryland MICHAEL E. CAPUANO, Massachusetts
ERIC A. ``RICK'' CRAWFORD, Arkansas TIMOTHY H. BISHOP, New York
JAIME HERRERA BEUTLER, Washington MICHAEL H. MICHAUD, Maine
RANDY HULTGREN, Illinois RUSS CARNAHAN, Missouri
LOU BARLETTA, Pennsylvania GRACE F. NAPOLITANO, California
CHIP CRAVAACK, Minnesota DANIEL LIPINSKI, Illinois
BLAKE FARENTHOLD, Texas MAZIE K. HIRONO, Hawaii
LARRY BUCSHON, Indiana JASON ALTMIRE, Pennsylvania
BILLY LONG, Missouri TIMOTHY J. WALZ, Minnesota
BOB GIBBS, Ohio HEATH SHULER, North Carolina
PATRICK MEEHAN, Pennsylvania STEVE COHEN, Tennessee
RICHARD L. HANNA, New York LAURA RICHARDSON, California
JEFFREY M. LANDRY, Louisiana ALBIO SIRES, New Jersey
STEVE SOUTHERLAND II, Florida DONNA F. EDWARDS, Maryland
JEFF DENHAM, California
JAMES LANKFORD, Oklahoma
REID J. RIBBLE, Wisconsin
CHARLES J. ``CHUCK'' FLEISCHMANN,
Tennessee
VACANCY
------ 7

Subcommittee on Aviation

THOMAS E. PETRI, Wisconsin, Chairman
HOWARD COBLE, North Carolina JERRY F. COSTELLO, Illinois
JOHN J. DUNCAN, Jr., Tennessee RUSS CARNAHAN, Missouri
FRANK A. LoBIONDO, New Jersey DANIEL LIPINSKI, Illinois
SAM GRAVES, Missouri PETER A. DeFAZIO, Oregon
JEAN SCHMIDT, Ohio BOB FILNER, California
RANDY HULTGREN, Illinois EDDIE BERNICE JOHNSON, Texas
CHIP CRAVAACK, Minnesota, Vice LEONARD L. BOSWELL, Iowa
Chair TIM HOLDEN, Pennsylvania
BLAKE FARENTHOLD, Texas MICHAEL E. CAPUANO, Massachusetts
BILLY LONG, Missouri MAZIE K. HIRONO, Hawaii
PATRICK MEEHAN, Pennsylvania STEVE COHEN, Tennessee
STEVE SOUTHERLAND II, Florida ELEANOR HOLMES NORTON, District of
JAMES LANKFORD, Oklahoma Columbia
JOHN L. MICA, Florida (Ex Officio) NICK J. RAHALL II, West Virginia
REID J. RIBBLE, Wisconsin (Ex Officio)
CHARLES J. ``CHUCK'' FLEISCHMANN,
Tennessee
VACANCY

CONTENTS

Page

Summary of Subject Matter........................................ iv

TESTIMONY
Panel 1

Hon. Alan D. Wapner, Member, Ontario City Council, and Board
Member of Ontario International Airport Authority (OIAA)....... 7
Hon. Gary Ovitt, Fourth District Supervisor, San Bernardino
County, and Board Member of OIAA............................... 7
Miguel Santana, City Administrative Officer, City of Los Angeles. 7

Panel 2

Hon. Ronald O. Loveridge, Mayor, City of Riverside, and Board
Member of OIAA................................................. 22
Lucy Dunn, President and Chief Executive Officer, Orange County
Business Council, and Board Member of OIAA, accompanied by
Larry Brose, Vice President, Investor Relations and Business
Development, Orange County Business Council.................... 22
Brian Perry, Chief Legislative Deputy for Councilman Dennis P.
Zine, Third District, Los Angeles City Council................. 22
John Husing, Ph.D., Vice President, Economics & Politics, Inc.... 22

PREPARED STATEMENT SUBMITTED BY MEMBER OF CONGRESS

Hon. Ken Calvert, of California.................................. 39

PREPARED STATEMENTS SUBMITTED BY WITNESSES

Hon. Alan D. Wapner.............................................. 41
Hon. Gary Ovitt.................................................. 44
Miguel Santana................................................... 47
Hon. Ronald O. Loveridge......................................... 52
Lucy Dunn........................................................ 56
Councilman Dennis P. Zine (submitted by witness Brian Perry)..... 61
John Husing, Ph.D................................................ 69

SUBMISSION FOR THE RECORD

Hon. Gary G. Miller, a Representative in Congress from the State
of California, request to submit written statement of Steve
PonTell, President, Ontario Airport Alliance................... 3

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ECONOMIC IMPACT AND FUTURE
MANAGEMENT OF
L.A./ONTARIO INTERNATIONAL AIRPORT

----------

THURSDAY, SEPTEMBER 27, 2012

House of Representatives,
Subcommittee on Aviation,
Committee on Transportation and Infrastructure,
Washington, DC.
The subcommittee met, pursuant to call, at 1:32 p.m., in
city of Ontario City Hall, 303 East B Street, Ontario,
California, Hon. Thomas Petri (Chairman of the subcommittee)
presiding.
Present: Representatives Petri and Miller.
Also Present: Representatives Baca and Calvert.
Mr. Petri. I'd like to begin this Aviation Subcommittee
field hearing by thanking the city of Ontario Mayor Leon,
Representatives Gary Miller and Joe Baca, and we will soon be
joined by Ken Calvert, the airport board members, city and
county officials, concerned citizens in attendance for your
hospitality and for your appreciation today. We would also like
to recognize the hard work of Jacob Green and his team in
helping to make the arrangements for this hearing today. It is
very much appreciated.
Today the Subcommittee on Aviation will hear testimony on
the economic impact of and future plans for the L.A./Ontario
International Airport. The goal of this oversight hearing is to
learn about the economic impact of the airport, including its
role as a job creator and its place in the national aviation
system.
We will also hear testimony about future plans for this
medium-hub commercial airport.
I want to emphasize that the presence of the House Aviation
Subcommittee here today should not be interpreted as a sign
that Congress plans to inject itself into future discussions
related to the management of the airport. This is a matter that
must be decided by local and regional policymakers, many of
whom are, in fact, in attendance here this afternoon.
I look forward to hearing from the witnesses, and thank you
for your participation.
Before I recognize Mr. Miller for his opening statement, I
would ask unanimous consent that Members not on the committee
be permitted to sit with the committee at today's hearing,
offer testimony and ask questions.
Without objection, so ordered.
I would also ask unanimous consent that the record of
today's hearing remain open until such time as our witnesses
have provided answers to any questions that may be submitted to
them in writing, and I ask unanimous consent that the record
remain open for 15 days for additional comments and information
submitted by Members or witnesses to be included in the record
of today's hearing.
Without objection, so ordered.
Now I would really like to recognize a hard-working Member
of Congress and a colleague who invited us to come and to learn
more about the situation, Representative Gary Miller.
Mr. Miller. It is coming on. All right. There are no
lights. I am assuming you can hear me.
Mr. Petri. The acoustics are so good, you can't even tell
it is not on.
Mr. Miller. It is really good to be here today. I first
represented Ontario Airport from 1998 to 2002, and you had
Mayor Gary Ovitt as a supervisor here. It is good to see you
again.
I want to thank the city for their hospitality, for
inviting us here today.
I would like to mention my colleagues from California, Joe
Baca, who represents the area. We worked hard for years on
issues that benefit the region. And a good friend of mine, Ken
Calvert, who is on his way from his office right now, and he
should be here shortly.
But we need to discuss the issues of the airport. There is
also a request from the Ontario Airport Alliance. I would like
to admit their statement into the record.
Mr. Petri. No objection.
[The information follows:]
[GRAPHIC] [TIFF OMITTED] T6150.007

Mr. Miller. I would like to thank the subcommittee
chairman, Mr. Petri. He flew across the United States to get
here today. He has been a good friend and colleague for 14
years on the committee, and he believes in transportation. Last
time we had a hearing here was Chairman Jimmy Duncan, who is
still a subcommittee chairman, who hosted the last one.
We need to discuss the need for local control. We have
looked at what has happened to Ontario in recent years. There
are no fingers being pointed at LAWA in any fashion, but the
benefit of this airport is tremendous.
It is situated in one of the most fastest growing regions
in the U.S., serving over 6 million people from San Bernardino,
Riverside County, and portions of Orange County and L.A.
County. The explosive population growth demands that planning
and investment in our aviation and surface transportation
infrastructure be coordinated on all levels in order to ensure
that movement of goods and people can continue in the future.
With most southern California airports close and at full
capacity, Ontario is the most promising solution to southern
California's future aviation needs because it has the ability
to accommodate a large increase in air services, where the
other airports have very limited capacity today.
I had the honor, like I said, of representing this when it
was the 41st Congressional District. It is changing to a new
one today. I went to the 42nd, and now I am in the 31st. But at
that point, Mayor Ovitt, we worked on major issues. We talked
about the need for UPS having the benefit of having the China
route, which they did. We got that implemented. We had many
infrastructure needs around the airport that we worked
together, the mayor and the city council and myself, to
accommodate those things. We did a good job.
We need to look to the future. August 2000, as I said, we
had the other subcommittee hearing here, and it was very good.
The hearing today is the only other time members of the
Southern California Transportation Committee have been in this
area to discuss a need for this airport.
For the 1980s and 1990s, airline deregulation produced
greater competition and lower fares, which led to a steady
increase in passenger traffic. However, by the end of 2011,
Ontario was down 32 percent fewer passengers, and 2000 was a
dismal record in comparison to the Los Angeles Airport.
In 2000 to 2001, the number of Ontario passengers was close
to that of John Wayne. Today, passenger traffic at Ontario is
slightly more than half of John Wayne. Furthermore, Burbank
Airport, which handles far fewer passengers than Ontario in
2000, is now about the same size as Ontario. These comparisons
showing Ontario's decline while other southern California
airports remain healthy is a clear sign that something must be
done differently in the future.
I applaud the efforts of our local elected officials in the
community and business leaders to help bring Ontario to local
control and make Ontario one of the most competitive passenger,
cargo and business airports in the United States.
As negotiations continue between the new authority and
LAWA, there has been a sense of urgency as a precipitous
decline in the service in Ontario from 2007 has meant the loss
of nearly $500 million to the Inland Empire regional economy,
and the loss of more than 9,250 jobs. The transfer of the
airport sponsorship to the new authority is required if we are
to achieve true airline regionalization. Ontario is an economic
engine to the region.
Earlier this week I met with Gina Marie Lindsey, who is
executive director of LAWA. We had a very positive meeting, and
I believe the conclusion of that meeting was that we needed to
do something for the benefit of the region and for the benefit
of this airport. We share a mutual goal that Ontario needs to
be capable to provide great economic benefits, and that
provision needs to happen as soon as possible.
I again would like to thank Chairman Petri. He came a long
way. He understands the importance of this airport. We
discussed it.
Congressman Baca and I have had numerous discussions on
this issue. I believe this is an area that we can dissuade many
that believe bipartisanship is not truly available and does not
truly happen, because it does. We both realize that there is a
tremendous need, and if we cooperate and work together, we can
accomplish many good things.
And it is good to see my good friend, Kenny Calvert, here,
and I yield back the balance of my time.
Mr. Petri. Thank you.
Representative Baca.
Mr. Baca. Well, thank you very much. Good afternoon to all
of you for coming. Mayor and city council, thank you for
allowing us to use your facility this afternoon on a very
important topic as we begin to discuss the Ontario
International Airport and its importance to the southern
California region. And I state the southern California region,
so it is not just about the Inland Empire, but it is about the
southern California region.
And I want to thank the subcommittee chairman, Tom Petri,
for traveling to Ontario to hold this critical hearing. In
fact, I happened to talk to him this morning and he indicated
that he flew from Wisconsin to Phoenix, and then Phoenix on to
Ontario. So that tells us that Ontario is important for this
region and to maintain the airport out here. So thank you very
much for flying Southwest, although I am not advertising
Southwest. But that is how he flew into this area.
I also want to thank the Chair for giving me an opportunity
to participate in this Transportation panel.
I also want to thank members of the Transportation
Infrastructure Committee for being a strong advocate. One of
the strongest advocates in the area has been Gary Miller,
Representative Gary Miller, who not only represented this city,
along with me and others, has worked diligently to improve the
quality of life in the Inland Empire, and he knows the
importance of what this airport means to this region. I think
together in a bipartisan effort, along with many other Members,
we can collaborate and work and hopefully we can solve the
issue that is pending before us in a very positive way.
One of my other colleagues who is here, I would like to
recognize him as well, and that is Ken Calvert who is with us,
who is also very much concerned with Ontario International and
what it means to our region, and what it means to Riverside and
the surrounding area. So thank you very much, Ken Calvert, for
being here this morning.
The history of Ontario Airport dates all the way back to
1923, when a landing field was established on the lands leased
from Union Pacific Railroad. Since then, Ontario Airport has
been a benefit to the communities and residents of California
and the Inland Empire.
It also provides good paying jobs for the area residents,
increases economic development, and improves the overall
quality in our area. In fact, the airport has been called ``the
jewel of the Inland Empire.''
Unfortunately, the last 7 years have been difficult for
Ontario Airport. Since 2007, only one other airport in the
Nation, Cincinnati, has suffered a greater percentage of
decline in the number of passengers. This decline in air
traffic has cost our region in terms of lost jobs, tax revenue,
and economic development.
What I firmly believe is that this problem is one that can
be fixed. I say that can be fixed with the work and looking
forward and thinking and bold actions that we all need to take.
As we convene this hearing today, officials from Ontario and
Los Angeles are in the process of ironing out an agreement to
return Ontario Airport to local control. This is a positive
step in what has been a long and often difficult process.
While I have introduced legislation in the House of
Representatives to have the Federal Government mandate the
transfer of the airport, it is encouraging that the issues can
hopefully be resolved at the local level.
I want to commend all of the parties involved for this
progress that has been made so far. Alan Wapner, thank you for
your leadership. Jim Bowman, thank you as well in what you have
done in bringing this to our attention, and hopefully we will
work forward.
But there is still much that needs to be done and discussed
to determine the path ahead of Ontario Airport. It is
imperative that we work together to ensure the brightest future
possible for the airport so that we can help put more Inland
residents back to work.
So today we will listen, we will learn from excellent
panels of witnesses. I hope this hearing will build our
collaborative effort in strengthening Ontario Airport and
create new jobs, tax revenue, economic development for the
Inland Empire, and improving the quality of life for all of us
living around this region. Ultimately, we must all work
together to maintain a positive environment, and that is what
Gary Miller and others are trying to do in trying to make sure
that Ontario is back at the local control.
Once again, I thank the participant Members and the
witnesses for their time. I yield back the balance of my time.
Mr. Petri. Thank you.
Representative Calvert.
Mr. Calvert. Well, thank you, Chairman Petri, for coming
out here to California and doing this hearing. I will have a
full statement that I would like to introduce for the record.
But I just have a few short comments.
I want to thank my friend, Gary Miller, who invited me here
today, and Joe and all of us from the Inland Empire, because we
know this is not just an airport for San Bernardino County or
for East Los Angeles but for this entire region, including
Riverside County. This is an airport that we utilize on many
occasions. I just flew out here the other day to go to San
Francisco, and this is our regional airport.
So it has been somewhat disheartening to all of us to see
what has happened to this wonderful facility, and we would love
to work forward with the city of Los Angeles to move this
airport along.
I know that Jerry Lewis couldn't be here today. He is still
in Washington, DC. He feels very strongly about this, as we all
do. We want to make sure that this airport does well, and I
think the city of Ontario certainly has the interest and will
do a great job of making this a premiere facility for this
entire region.
So not only does it help Ontario, but those of us who fly
out of LAX a lot, it will help LAX because you can only jam so
much into that box, and we are in that box, the three of us,
every single week. The parking is tough. The traffic is tough.
We need to kind of share the wealth a little bit and get some
flights out of here, Ontario, and I think it will work great
for the region.
So thanks for having this hearing, and I appreciate being
here with you.
Mr. Petri. Thank you.
Our first panel of witnesses consists of the Honorable Alan
D. Wapner, who is a member of the Ontario City Council; and the
Honorable Gary Ovitt, Fourth District Supervisor, San
Bernardino County; and Mr. Miguel Santana, City Administrative
Officer, city of Los Angeles. Gentlemen, thank you for being
here today. Thank you for the effort that went into your
prepared statements, which will be made part of the record of
this hearing. I would invite you to summarize those statements
in about 5 minutes, beginning with Alan Wapner.

TESTIMONY OF THE HONORABLE ALAN D. WAPNER, MEMBER, ONTARIO CITY
COUNCIL, AND BOARD MEMBER OF ONTARIO INTERNATIONAL AIRPORT
AUTHORITY (OIAA); THE HONORABLE GARY OVITT, FOURTH DISTRICT
SUPERVISOR, SAN BERNARDINO COUNTY, AND BOARD MEMBER OF OIAA;
AND MIGUEL SANTANA, CITY ADMINISTRATIVE OFFICER, CITY OF LOS
ANGELES

Mr. Wapner. Thank you, Mr. Chair, Congressman Miller,
Congressman Baca, and Congressman Calvert. On behalf of the
city of Ontario and the newly formed Ontario International
Airport Authority, welcome to Ontario. My name is Alan D.
Wapner. I am a city council member for the city of Ontario and
a board member for the new Ontario International Airport
Authority. Thank you for holding this field hearing on this
matter of critical importance to the Inland Empire and all of
southern California.
As a result of the declining conditions at Ontario
International Airport and the region's concerns about the
airport's ability to sustain commercial air traffic in the
future, the Ontario City Council took action last month and
formed the Ontario International Airport Authority. This new
Authority was formed through a Joint Powers Agreement between
the city of Ontario and the county of San Bernardino.
Over the past 2 years, a compelling case has been made for
why the city of Los Angeles should relinquish control of
Ontario International Airport. As I wrote in an op-ed in the
Los Angeles Times, there are many reasons for Ontario to be
placed under local control and governed by a multi-
jurisdictional airport authority.
One, it allows Los Angeles World Airport, LAWA, to focus
its energy and time on LAX for the benefit of the region's
economy as a whole.
Two, it promotes regionalization by returning Ontario
International Airport to local control, which is conducive to
the development of robust regional airports.
And three, it ensures all of southern California, including
Los Angeles, will have sufficient and affordable airport
capacity. Without adequate capacity, airlines will be forced to
land elsewhere.
This transfer will also protect the significant financial
investment made into the Ontario Airport by the Federal
Government and the city of Ontario. Hundreds of millions of
dollars to enhance Ontario Airport ground access and associated
infrastructure have been accomplished through our fiduciary
partnership. These multimillion-dollar projects include grade
separations, street widenings, interchange upgrades, radio
system enhancements, landscaping, land use planning studies,
water treatment systems, and noise mitigation programs.
The inability of the Ontario Airport to support commercial
air traffic will not only undermine the region's air traffic
strategy but will inevitably undermine Federal, State, and
local-funded infrastructure investments designed to support
Ontario Airport into the foreseeable future.
To prevent this disaster, just last week Los Angeles City
Administrative Officer Miguel Santana released his report on
options for future management and control of ONT. We embrace
his recommendation that the CAO facilitate negotiations between
LAWA, the city of Ontario, the county of San Bernardino, the
Ontario International Airport Authority and other primary
stakeholders to determine the most effective and appropriate
ownership and management alternative for the airport.
All of southern California, including Los Angeles, will be
better served by the transfer of Ontario Airport to the Ontario
International Airport Authority. It is our intent that
negotiations with the city of Los Angeles result in a transfer
that is a win for all parties and is structured in accordance
with FAA policies. By transferring sponsorship of Ontario
International Airport from LAWA to the Ontario International
Airport Authority, the airport will have a sponsor that has a
vested interest in its success and is accountable for providing
long-term airport capacity for the benefit of the entire
region, including the city of Los Angeles.
I would like to take this opportunity to express my
appreciation to the Los Angeles City Council members Dennis
Zine, Bill Rosendahl and Paul Koretz for their motion of March
20th, 2012. Their motion resulted in the Los Angeles City
Administrative Officer's report which has given all parties the
direction and clarity to move ahead with the airport's
transfer.
I know I speak for the entire board of the Ontario
International Airport Authority when I say we are fully
committed to restoring Ontario International Airport as the
region's most important economic engine capable of meeting the
long-term demand for air travel in southern California. Thank
you.
Mr. Petri. Thank you.
Supervisor Ovitt.
Mr. Ovitt. Good afternoon and thank you, Chairman Petri and
Representatives Miller, Calvert and Baca, for this very
important day in Ontario. Welcome to Ontario, San Bernardino
County and the Inland Empire. My name is Gary Ovitt. I am the
Fourth District Supervisor for the county of San Bernardino,
board member of the Ontario International Airport Authority,
and a former mayor of this great city of Ontario.
The Ontario International Airport Authority was created in
August of 2012 by a Joint Powers Agreement between the city of
Ontario and the county of San Bernardino. Its purpose is to
oversee the orderly transfer of the airport from the city of
Los Angeles and provide the governance for the ongoing
operations of the airport.
Under terms of the Joint Powers Agreement, I joined Ontario
City Council members Alan D. Wapner, to my left, and Jim W.
Bowman of the Ontario International Airport Authority on board
as my district includes the cities of Ontario, Chino, Chino
Hills, Montclair, and the southern portion of Upland.
We are very fortunate that the city of Riverside's mayor,
Ronald O. Loveridge, and president and CEO of Orange County
Business Council, Lucy Dunn, have agreed to join the Authority
as board members representing the entire region.
Under the 2005 stipulated settlement agreement signed by
Mayor Antonio Villaraigosa, a champion of airport
regionalization, growth of passenger and air cargo activity is
a requirement. The historic settlement agreement cleared the
way for billions of dollars in construction projects now
underway at LAX. The city of Los Angeles can show its
commitment to airport regionalization and encourage the growth
of Ontario International Airport by transferring Ontario
International Airport to those who have a vested interest in
its success.
Local control has proven to be more conducive to developing
robust regional airports than trying to manage them from a city
many miles away in a different county.
Ontario International Airport is of great importance to all
of southern California. It deserves to be managed by a multi-
jurisdictional agency responsive and accountable to the entire
region. I believe the Ontario International Airport Authority
will help the airport rebound from the neglect of recent years
while positioning itself for long-term growth consistent with
the regional transportation plan of the Southern California
Association of Governments, otherwise known as SCAG, the
largest metropolitan planning organization in the country.
Ontario International Airport does not serve the Inland
Empire alone. Its catchment area encompasses some 6 million
people living in a 25-mile radius of the airport. Thousands of
air travelers bypass Ontario International Airport each day to
get the flight schedules and fares they seek from surrounding
regional airports, increasing the traffic congestion and
automotive emissions.
From my previous roles as president of the Southern
California Association of Governments and a former county
representative on the South Coast Air Quality Management
District, I can attest to the need of a successful regional
airport to benefit the overall transportation needs of the
region.
One of the earliest proponents of a change in control of
Ontario International Airport came from the SCAG regional
council comprised of 84 elected officials representing 189
cities, six counties, and six county transportation
commissions. SCAG concluded that transferring Ontario
International Airport to local control is in the best interest
of the city of Los Angeles and the southern California region.
In a resolution unanimously adopted on September the 2nd,
2010, SCAG said the change of airport sponsorship will enable
the city of Los Angeles to focus its attention on modernizing
LAX and restoring passenger traffic to pre-September 11 levels,
essential steps to enable LAX to achieve its full potential as
the city of Los Angeles primary economic engine. By
transferring control of Ontario International Airport to the
Ontario International Airport Authority, SCAG noted that
Ontario International Airport will operate using the same
proven structure as all other secondary airports in the region.
Each of these airports operates as low-cost secondary sites
under the control of an agency that takes responsibility and is
accountable for its performance.
The San Bernardino County Board of Supervisors most
certainly agree with SCAG's findings. That is why we passed a
resolution that Ontario International Airport needs to be
managed by a regional airport authority. As a critical piece of
our economy, the entire region has come together in support of
the transfer of Ontario International Airport to the Ontario
International Airport Authority. We greatly appreciate the
interest, concern, and support of this committee. Thank you
very much.
Mr. Petri. Thank you.
Mr. Santana.
Mr. Santana. Good afternoon. On behalf of the mayor and the
City Council of Los Angeles, I would like to thank you for this
opportunity to address your committee. As a 23-year resident of
the Inland Empire, I would like to personally thank you for the
focus on revitalizing L.A./Ontario Airport in this important
region.
The CAO's role in this process is to analyze and provide
recommendations to the city council and the mayor. As a CAO, I
have 16 bosses. I report to the mayor and each one of the 15
city council members. But I do not run the airports. The CAO
does not manage, nor does LAWA. That is run independently by a
separate board of the commissioners appointed by the airport.
Any proposed transition would need to be approved by the Board
of Airport Commissioners and affirmed by the city council.
My office was instructed by the L.A. City Council to
evaluate the city of Ontario's proposal and to help identify
and analyze the other potential options for future ownership,
operation and management of the airport. To assist in the
review, my office contracted with Acacia Financial Group, along
with other consultants, to help analyze potential options. It
is our goal to facilitate and continue the dialogue with
Ontario and its partners in discussing a long-term strategy for
the airport.
Indeed, our report was released on September 21st and
outlined a number of options. Over the last few years, LAWA has
taken numerous steps to create operational efficiencies at the
airport and reduce operating costs in an effort to increase
passenger traffic and promote new air service. However, despite
these efforts, even though LAWA has made progress in improving
operations and curtailing costs, an acquisition and transfer of
the airport back to the city of Ontario or the Ontario
International Airport Authority has considerable merit.
To that end, the city of Ontario proposed in their December
14th, 2011, letter to LAWA that the operations and fee title to
the airport be transferred from the city of Los Angeles to the
city of Ontario. The primary terms of that transfer include the
following: paying to the city of Los Angeles general fund a $50
million transaction payment unrelated to the airport's
valuation to defray the city's cost of transferring the airport
back to Ontario; assuming or retiring approximately $71 million
in existing bond debt and any other Ontario-related financial
obligations, including indemnification of any and all liability
pertaining to those obligations; paying LAWA in years when the
cost per enplaned passenger to airlines operating in Ontario is
$5 or less, up to one-third of annual Ontario PFC collections
up to the cumulative amount equal to the amount of LAX PFC
collections contributed to capital projects at Ontario,
estimated at about $125 million; entering into an employee
protection and transition services agreement to protect
existing LAWA employees; refraining from imposing any operating
restrictions, caps, curfews, aircraft type bans, and any other
barriers to future growth of the airport; and maintaining all
current operating covenants for the airport, as well as
terminating or revising the original 1967 JPA.
The $50 million transaction payment to the city of Los
Angeles general fund is meant by Ontario to be a reimbursement
of the cost for transferring the airport. However, based on my
conversations with the FAA, such a payment appears to be viewed
by the FAA as a potential revenue diversion under Federal
aviation law. Our city attorney has also looked at this matter
and has concluded the same.
However, as a result, this particular option is not an
option that we are recommending, but we do recommend that the
city engage in very aggressive discussions with the city of
Ontario, the county of San Bernardino, and the Authority on an
option that allows us to proceed forward on an effective
transfer, and I will describe what that potential partnership
could look like.
In our report, we enumerate a number of different
alternatives. The alternative that we are recommending is the
acquisition of Ontario International Airport by the city of
Ontario or the Ontario International Airport Authority, or by a
separate party. Acquisition of a commercial airport by any
other municipal agency is allowable under FAA regulations
providing that the FAA approval is obtained and proceeds go to
LAWA, not the city general fund, as airport revenues used to
benefit the city's airport system.
This alternative would provide for the new owner to, one,
obtain an FAA operating certificate; two, compensate LAWA
financially for the value of the airport, as well as the cost
of the transition to the new owner; three, to freeze all
outstanding airport debt and assume existing financial
obligations; four, execute an employee protection agreement for
a minimum period; five, agree to refrain from imposing
operating restrictions, caps, curfews, bans on aircraft types;
six, dispose of any fund balances held by the airport; seven,
assume responsibility for outstanding grant assurances; and
eight, assume responsibility for the airline use and lease
agreement.
Based on this proposal, we are recommending a path forward.
As I stated on September 21st, my office did release a report
that outlined a process to begin these negotiations. We are
recommending that the city of Los Angeles and LAWA explore
potential acquisition by the city of Ontario and the Ontario
International Airport Authority, subject to FAA approvals. We
also recommend that the city direct my office to facilitate a
discussion and negotiations with all of the various parties, as
well as other stakeholders, to discuss common goals in an
effort to increase economic activity across the region.
All participants could potentially achieve these goals and
objectives by establishing a transaction with the city of
Ontario or the Authority and providing certain financial and
operational benefits to LAWA to enhance a much needed capital
infrastructure at LAX. This, in fact, could be a win-win both
for the city of Los Angeles, LAWA and, of course, the Inland
Empire.
Earlier this week, the city council's Trade, Commercial and
Tourism Committee endorsed my recommendation, and it will be
moving forward for the full city council within the next
several days. Upon approval of that final recommendation by the
full city council, we are recommending that the LAWA commission
immediately meet and establish a set of guidelines to allow the
negotiations to move forward. Those guidelines could include
the following: to the greatest extent possible, avoid or
mitigate any disruption of service at the airport; the airport
must continue to be operated as a commercial airport; the
airport shall be operated in the most efficient manner
possible; the city and LAWA should receive reasonable
compensation in respect of the investment that LAWA has made to
the airport; all existing employees shall be treated fairly and
in accordance with existing labor contracts; and the city's
existing and future general fund base must always be protected.
It is in the interests of both the mayor and the city
council to move as quickly as possible on these negotiations.
My office has been directed to report back in 90 days on the
status of this potential partnership.
I am also joined by Jess Romo, who is the Ontario Airport
manager, who many of you may know, and as well by Ray Serrano
from my office. Thank you very much.
Mr. Petri. Thank you. Thank you all.
I do have a few questions, and I suspect other members of
the panel may as well.
The first one I would direct to Mr. Wapner, and that is why
is it that you believe transferring control of the airport to a
new authority would be a win for all involved?
Mr. Wapner. Well, certainly we have an aviation system in
southern California that depends on various airports reaching
capacity to serve the aviation needs of southern California.
Without Ontario Airport growing to its proposed capacity of 31
million annual passengers a year, the entire region will be
shorthanded in trying to meet the aviation needs of the
economic climate of southern California.
In essence, what would then happen, according to the
airline industry, is if they can't meet the aviation needs
here, they will move the entire economic segment of aviation to
another region, potentially Nevada or Arizona. So it's very
important. As we know, the FAA system is built upon the
principle that we need primary airports such as LAX, but we
also need reliever airports to help relieve the primary airport
of general aviation, as well as some of the more short-haul
flights.
So really, to create a system in southern California, you
need all the airports really operating at their full capacity.
Mr. Petri. Mr. Ovitt, what do you hope to achieve for
Ontario Airport as a member of the new Airport Authority should
ownership be transferred to the new airport board?
Mr. Ovitt. Thank you, Mr. Chairman. I believe that this
will put in charge of the airport those who have a vested
interest in it, and it will be a multi-jurisdictional airport
authority made up of representatives from really pretty much
the entire catchment basin that would be utilizing the airport.
With all of that stated, then best practices would really
kind of demand that we have representation from all of them,
and we would respond and be accountable to the airport vetters.
So Ontario is a tremendous economic generator for this
region, and we would look forward to that helping to straighten
out our economy, which has been lagging far behind these last
few years.
Mr. Petri. I have a couple of questions also for you, Mr.
Santana. You recently were quoted as saying that a change in
airport ownership could potentially benefit all interested
parties. Could you expand on that or explain what you meant by
that, or how that would be possible?
Mr. Santana. The reason why we recommended moving forward
with these negotiations is that LAWA certainly has a number of
pressing needs at LAX, and this potential partnership could
result in revenue to help LAWA meet those needs.
For the Inland Empire, obviously this has been a priority
for many, many years, and the idea is, as articulated by the
other panelists, is that through local control the airport
could play a larger role in the revitalization of the regional
economy. And like everything else, when there is that much
importance placed on an asset, then the opportunities of
maximizing that asset also occur.
So from our perspective, this provides us an opportunity to
both allow the city of Los Angeles to receive revenue to
enhance and improve the overall capital needs of an airport
that is an essential part of the regional economy while at the
same time strengthening Ontario Airport by allowing those
individuals who play a leadership role within this region to
manage it.
Mr. Petri. Thank you.
Representative Miller.
Mr. Miller. Thank you very much, Mr. Chairman.
Councilman Wapner, what do you think the top priority would
be for the airport once Ontario International Airport is
transferred and you assume control?
Mr. Wapner. Thank you, Congressman Miller. Obviously, the
top priority is to lower the cost of business for the airlines
so that we can incentivize airlines to come back here and
launch more flights. What has pushed the airlines away is the
high cost of doing business at Ontario. In fact, we are the
highest cost airport in the United States for an airport our
size. And airlines having limited resources, certainly they are
going to use those resources in markets that they can do
business at a much cheaper rate than they can at Ontario.
Secondly, what we want to do is stop the exodus of flights
that are now leaving Ontario and incentivize other airlines to
come back to Ontario and increase their flights.
We also want to stress more development on the airport side
itself. Since Los Angeles has had control of the airport, we
have seen little, if any, development on-site, and obviously
the advantage of doing development on the airport site is the
more ancillary revenue that you develop, the lower the costs
are going to be for the airlines doing business there. So if we
can bring more nonaviation revenue such as increased ground
leases, parking revenue, concessions, then that will again
lower the cost of doing business for the airlines, and it
incentivizes them to have more business and more flights here.
And then finally we have to target a new marketing campaign
to recapture the flights and the people that have left Ontario
already. A lot of folks have already created new riding habits
by driving into Los Angeles to catch a flight, or into Burbank
or Orange County. So the next thing that is going to be
necessary is to have a marketing plan, and we envision all of
southern California coming together to help fund this, but a
new marketing plan that would bring passengers back to Ontario,
tell them that we now have more flights, we now have cheaper
flights, we have more airlines, give us another chance, come
back to Ontario and we will make you happy.
Mr. Miller. It looks like the marketing budget was
originally $2 million. It is down to about $200,000 now, and
Mr. Santana mentioned the cost. Looking at your cost per
enplaned passenger, you are about $13.50 per passenger. Burbank
is $2.09. Palm Springs is $4.07. So you have a huge
disadvantage. When the cost goes down, you share some of the
profits back. And the other discussion was about the employee
compensation must be continued at current levels, and an
average employee makes $115,000, which is 15 percent above
anybody else. How would you deal with that?
Mr. Wapner. Well, you know, obviously those are going to be
some obstacles that we are going to have to talk about. When we
examined the reason for the high cost of doing business at
Ontario, it really came down to three primary factors.
One, LAWA was assessing and is assessing a 15-percent
administrative overhead charge on the operating budget at
Ontario International Airport. So that is 15 percent we can
knock off immediately because, obviously, the city of Ontario
is not going to charge the same types of charges to Ontario
Airport.
Secondly, there are just too many employees at Ontario
International Airport. At one point, they had over 400
employees. If you are an airport, it might necessitate 75 to
100 employees.
And then finally, as you mentioned, Congressman Miller,
because of an L.A. City charter provision, all employees,
contractors, vendors at an L.A.-owned facility must pay
prevailing wages. Now, obviously, we all support prevailing
wages, but we support prevailing wages of the Inland Empire
cost of living. These prevailing wages are based on the city of
Los Angeles cost of living, and all of our congressional
delegation understands that businesses locate to the Inland
Empire because it is much cheaper for their employees to buy
houses out here, and the cost of living is much lower. So it
doesn't make sense to be paying employees up to 20 or 25
percent more than what the market will bear just because of an
L.A. City charter provision. Obviously, that provision won't
apply to the city of Ontario.
Having said that, one of the provisions that Mr. Santana
has put forth is that the existing contracts be supported in
the transfer. We are not looking to lay off any employees,
especially 300 employees. So certainly part of the negotiations
is going to have to find some way that these employees can
either be absorbed into the LAWA or city of L.A. system, or
they will stay here and they will just be replaced through
attrition.
Mr. Miller. Supervisor Ovitt, you mentioned that your
vision for the growth and development of Ontario Airport is
consistent with SCAG's regional transportation plan. Can you
educate us further, the audience and the committee, on the
regional transportation plan, how the transfer of the airport
complies with that?
Mr. Ovitt. Certainly, Congressman Miller. I would be happy
to do that. The SCAG--the metropolitan planning organizations
are required to actually do a plan for regional transportation
every 4 years, and we do one that takes in the entire six-
county region, which is Los Angeles County, Ventura County, San
Bernardino County, Riverside County, Orange County, and as well
Imperial County, which seems interesting as well.
Anyway, we do a regional transportation plan so that we
make sure that we are working together to try to develop
mobility within the entire region, and it is an investment for
a 20-year period, and it is based on growth forecasts and
economic trends that project out over that 20-year period. As
well, it is interested in the role of transportation in the
broader context of economic, environmental, and quality-of-life
goals for the future. So when you look at that, we do the same
thing, of course, with not only our ground transportation as
well, we do that with our aviation as well.
And so as a result of that, we have forecast that between
the years 2012 to 2035, our aviation growth would show that
Ontario's baseline medium growth, low growth and high growth
scenarios are such that if it were the baseline medium growth
for Ontario International Airport, we would have 19.2 million
air passengers a year by 2035. But if we went by the scenario
for the high growth, it could be, as Councilman Wapner had
mentioned, 31.6 million air passengers a year.
So that is the difference between it, and the RTP is
obviously very important. In fact, our Federal funding demands
that we do an excellent job and make sure that we have the
dollars to pay for those projects as well.
Mr. Miller. My last question is for Mr. Santana. My
comments were not meant as an attack on the costs. They were
just kind of glaring when I looked at them, and I hope that is
discussed during the negotiations.
But if the parties have successful negotiations in the
process, how do you see the city of Los Angeles processing and
completing the transaction?
Mr. Santana. I'm sorry?
Mr. Miller. If the negotiations are successful, how do you
see the process being completed with the city of Los Angeles?
Mr. Santana. Well, I think the first step is establishing a
common understanding of what we are trying to achieve, and that
is why we laid out a series of guiding principles that the city
would engage in and immediately seek support from the
representatives of the Inland Empire. Once those principles are
solidified, then we can begin the work of dealing with each one
of those issues.
You talked about the issues of the costs. Obviously, that
is going to be a significant amount of discussion. Establishing
what the appropriate value is is another. How do we manage the
issue of the employees, and I think there are a number of
options that could be pursued to allow the transition to still
occur while at the same time honoring the contracts that we
currently have. And then finally, establishing what that
transition could look like. The Authority currently doesn't run
an airport, and so there would have to be a transition period
for that, and there are a number of different options that
could still involve LAWA through a contractual relationship,
perhaps, to allow that transition to occur.
This is obviously--the most important thing at this
juncture is the fact that I think all sides are interested in
getting to a common goal. I know, as someone who has been for
many years an observer, and then an active participant in this
process, it is refreshing to see that we are finally all on the
same page. But the real work really begins now in developing an
understanding and a consensus around some very difficult
issues. But it starts off with the common interest of getting
there.
Mr. Miller. Thank you. I yield back.
Mr. Petri. Representative Baca?
Mr. Baca. Thank you, Mr. Chairman.
I have a question for all of the panelists. Whoever would
like to tackle the question first, please dive in.
What is the most important message that we, as Members of
Congress serving in Washington, DC, can send to the Federal
Aviation Administration regarding the ongoing negotiation to
return Ontario Airport to local control?
Mr. Wapner. I will take that, Congressman Baca. Obviously,
as Members of the United States Congress, you have a
responsibility to safeguard the investment of Federal dollars.
And as I stated in my testimony, there have been hundreds of
millions of dollars spent from the Federal Government for the
expansion and the operation of Ontario International Airport.
So it is obviously in the best interest of Congress, as well as
the United States Government, to make sure that Ontario remains
a successful airport and operates as such.
Secondly, as I stated earlier, the FAA, if you look at
their system of aviation throughout the country, depends on all
levels of airports, and I think it is consistent with the FAA
policies that an airport like Ontario be maintained and also be
as successful as possible.
Now, we have talked for a while, and I publicly talk about
the fact that if we don't act soon, Ontario Airport closes, and
a lot of people say that can't be. But we have to look at this
realistically. The existing airport that we have out there can
accommodate 12 million annual passengers. We have two terminals
which can each accommodate 6 million. We are doing just a
little over 4 million passengers.
All of you have flown out of our old airport, right? The
levels that we are seeing now for ridership are the same as
they were in 1983 out of the old terminal. So essentially, we
have seen hundreds of millions of dollars from the Federal and
local government gone to waste, sitting over there, because
they are not being utilized by folks needing to use the
airport.
So it is imperative that FAA understand that funding they
have made available through previous programs needs to be
safeguarded. We need to show that when folks receive money,
that they are going to use that money in the proper manner that
it was intended, not to build an airport that nobody uses.
So I think that hopefully the message to the FAA is, once
we come to an agreement here at the local level, to expedite
the processing and streamline the processing as much as
possible to get the licensing done so that we can take
transfer.
Mr. Baca. Thank you very much. Stop wasting taxpayer money,
yes.
Mr. Ovitt. Thank you, Congressman Baca. And I would just
add to that that it is a real mobility issue as well. We are
talking about goods moving here, which is so vital to the
entire country, and we are talking about the ability to get to
the different airports as well. Obviously, when we talk about
so many people here having to find flights in Los Angeles or go
elsewhere, as opposed to being able to utilize this valuable
asset that we have based on the lack of flights available here,
we are talking about even more of a strangulation of our
mobility, our ability to get goods where they need to go, et
cetera. So I think it plays a very important role in that.
Once again, FAA obviously is Federal, and we are talking
and looking for your help in that regard because you have some
control over it. We would love your help as far as the
railroads are concerned as well on goods movement, but that is
a whole different issue and we won't bring that up, but you
heard me anyway.
Mr. Baca. Thank you.
[Laughter.]
Mr. Ovitt. And certainly we would look to your help. You as
our representatives have done a lot of good in helping us to
bring dollars here for the ground access to our airport, and we
would look forward to that in the future.
We will not be able to grow to that 31 million, assuming
that it becomes a real viability in the future, unless we have
some additional help to find some other means of transportation
besides just automobiles dropping people off. We will need
high-speed rail or some other means as well. So we would
probably look to you in the future. We know you have a few
issues of your own economically speaking, but we would love to
work with you in that regard as a partnership.
Mr. Baca. Miguel?
Mr. Santana. Thank you. I had an opportunity to meet with
the assistant administrator of the FAA a few months ago to
specifically discuss this issue and to get some clarity around
potential diversion issues, which I was able to receive. And in
that meeting they made it very clear that they are relatively
agnostic on who ultimately runs the airport. However, they are
not neutral on issues pertaining to safety, transition, and
also accountability.
So I think as we proceed forward in this process and
hopefully reach a consensus, an agreement, that the FAA would
be clear on what their expectations are as we move forward
through that transition. So as the team that is working on
this, both from the Inland Empire as well as the city of Los
Angeles, has those clear expectations outlined, we can navigate
through them efficiently and create a solution that we all want
to seek out.
Mr. Baca. OK. Thank you.
I know that we all have several questions, but if I may ask
one final question, and then hopefully we will have a second
round so that we can complete asking some of the questions.
Mr. Ovitt, Supervisor Ovitt, I understand that the
responsibility of managing and eventually making Ontario
Airport profitable is going to be a daunting task. However, I
know that you and OIAA board are all up to the task. I want to
reiterate that myself and other Members of Congress,
Congressman Gary Miller representing the Inland Empire, and Ken
Calvert and Lewis and others are willing to help in any
possible way.
With that in mind, please explain to us what are some of
the first actions of OIAA board and planning to do within the
first year of operation of the Ontario Airport if the transfer
of control from LAWA is successful?
Mr. Ovitt. Thank you, Congressman. Certainly I think first
of all we will need to look at the entire facility itself, and
obviously working with LAWA folks who have been running the
facility. So we are going to have to look at that, take a
revisit to how it is being run. But certainly marketing will
play such an important role, to market it to the local patrons.
Obviously, as Councilman Wapner mentioned earlier, to lower the
rates for the flights and obviously try to make more flights
available as well, so that we can reach other destinations.
So all of those together will be important for us to look
at, and certainly we will reach out into our communities, and
the communities are quite large. The catchment area, of course,
is Orange County and Riverside County, as well as San
Bernardino County. So we will look to all of them. But we are
going to certainly need some marketing. We are going to
certainly need to reorganize the way we do business and try to
become more efficient in that regard, and try to renegotiate,
if you will, with our employees as well. So we look forward to
all of those things.
Mr. Baca. Thank you very much, Mr. Ovitt.
I understand that we won't have an opportunity to ask a
second round of questions, so the Chair has permitted me to ask
one additional question. So I will ask this of Mr. Santana.
Thank you for your efforts in preparing the feasibility
study looking at the issues of local control of Ontario
Airport. In your studies on this issue, did you find that
Ontario Airport will be able to reduce its overall cost
structure if it is returned to local control? Why or why not?
Mr. Santana. We did look at cost structure as one of the
issues and tried to identify how we could reduce the cost. Some
of the issues have already been articulated in terms of the
self-imposed regulations that as a city we have on our
employees and our contractors at LAX and at Ontario. So one
opportunity for a reduction in cost is obviously an evaluation
of that, right-sizing the airport, the management of the
airport, as well as engaging in contracts in a different way
than we currently have.
The other opportunities obviously really depend on how
effective the airport is and how effective the region is in
improving the local economy. There is a direct correlation with
the decline of the economy and the decline of the airport. So
as the regional economy improves, then it is anticipated that
the potential of the airport also improves.
So part of the analysis identified various scenarios in
which that, in fact, could occur.
Mr. Baca. Thank you very much. I don't have any other
questions, but I would just like to state that--thank you, Alan
Wapner, for your leadership on this endeavor in trying to bring
us back to local control.
Mr. Petri. Representative Calvert.
Mr. Calvert. Thank you. Thank you, Mr. Chairman.
I think it is very appropriate that the gentleman from
Wisconsin is here today to help referee this situation, because
I think he knows injustice when he sees it.
[Laughter.]
Mr. Calvert. And certainly he had that opportunity the
other night.
But I don't think it is important that we re-litigate what
happened here at Ontario for the last number of years and why
Los Angeles was given the opportunity to manage this facility
some years ago. What is important is I think that we all
recognize that the people here in the Inland Empire have every
capability of managing this as a safe, clean, and convenient
airport facility, and I don't think anybody intends anything
different than that. It is important because I think obviously
it is in the best interest of this region that that occurs.
One of the questions that both Mr. Lewis had sent to me and
I was interested also, not in just what--maybe this is also
going to be important to Mr. Husing when he comes up for his
testimony, but the impact Ontario Airport has not just on the
city of Ontario but on the entire Inland region. Obviously, I
am from Corona, but I am only a half-hour away from Ontario
Airport, and it has just a tremendous impact on my home town.
Also, I see the mayor of Riverside here.
In your opinion, Mr. Wapner and Mr. Ovitt, what kind of
vibrant impact does Ontario Airport have not just on the
economy but what it does to the entire region and the
reputation and so forth for our local community?
I will just start with you, Mr. Wapner.
Mr. Wapner. Well, you know, we have talked about this
already. The airport has an enormous impact on all of southern
California. Economically, we know that it is in the billions of
annual economic impact, responsible for tens of thousands of
jobs. In fact, the downfall of the airport most recently has
caused over a half-billion-dollar negative economic impact for
the entire region and the loss of almost 10,000 jobs in the
region as a result.
So when we hear discussions about the downturn in the
economy and how when the economy improves, so will the airport,
folks have to recognize that part of the downfall in the
economy is due to the downfall of the airport, that it is a
self-creating episode. So until the airport improves, the
economy doesn't improve. It is a Catch-22 there.
Secondly, as Supervisor Ovitt pointed out, we have issues
like mobility, and more important than that, environmental
impacts, where we are seeing over an additional 1.5 million car
trips a year, that folks from the Inland Empire are having to
go to Los Angeles to catch an airplane. That is inexcusable.
Can any of you come up with a better, cheaper way of
eliminating 1.5 million cars in a year than just transferring
an airport? I mean, let's be realistic. We are looking at all
different kinds of transit and everything else. This is an easy
solve.
So it impacts the economy. It impacts the environment. It
impacts mobility. It also impacts folks' quality of life. Why
should anyone in southern California have to endure a long-term
ride to Los Angeles International Airport when they could go to
one that is much closer to their home?
I applaud Mayor Villaraigosa. He has been a long-time
champion of regionalization of aviation. He has always
recognized that it is always better for folks to use an airport
closer to their home than the other way.
And the real injustice here--and that is why folks around
the Los Angeles International basin support local control of
Ontario--is that they are being victimized. They are being
victimized because their airport is the only airport not of
choice but of necessity in southern California. Unfortunately,
we are having to export tens of thousands, if not millions, of
folks to that area that could very well be using airports
closer to their homes.
So it is really not fair to the folks living around LAX at
this point to have to endure all the impacts of aviation when
it could be more evenly distributed among other airports.
Mr. Ovitt. Congressman, in answer to your question, there
is no doubt that one of the issues that we have all been
facing, of course, is this economic downturn, this recession
that we have been going through, and that has an impact,
obviously, on the number of those that are actually flying,
especially in our area. We have been probably the hardest hit
in the country, or at least very close to that. So that
certainly makes a difference.
In fact, as the airlines look at our region, part of the
reason they are not willing to expand here is they look at the
median household income, and we are not quite where they want
us to be, and so that is part of the reason. And yet I would
argue that Orange County would love to come here, would rather
come here than John Wayne. Certainly Riverside County, very few
go to Palm Springs. They would much prefer to come here, or
here as opposed to Los Angeles.
And when we have talked about the L.A. Airport, number one,
the mobility is really difficult to get there in the first
place, especially from here. But secondly, it is clear over on
the West Side of Los Angeles. So you have to go all the way
through the city as well. It wouldn't be so bad if it were on
the eastern end of it. So that is certainly an important issue.
I think one of the things that hurts us here in Ontario is
our name, Ontario. I mean, you know, it takes a province in
Canada to be as great as the city of Ontario, but that in
itself, people don't always know where we are located. How
close are we to Los Angeles? And the fact that we are in the
market area of L.A. and there is great accessibility to L.A.
from where we are as well.
Once again, we are probably the most populated region in
the country that doesn't have a pro football team or a
basketball team or something of that nature. We are very large.
The Los Angeles Basin is huge, so all of our media comes from
Los Angeles. So we really don't have an identity of our own,
and we need that, and that is something that the airport helps
to bring as well. Obviously, we would love to have a media here
as well, and that is one thing that we need to work on in that
regard.
So I think all of those play a very important part to our
region and the fact that if we had that airport, I think it
would all contribute towards--I think the figures have been
over $6 billion economic impact to this region, not only in
Ontario but in the surrounding area as well. And so I think if
we are able to once again generate additional flights and build
the air transportation figures, we will do much better.
And the one last thing I would say is that SCAG, as I
mentioned before, 84 members, most of which come from Los
Angeles County--in fact, the entire City Council for L.A. is on
it--overwhelmingly have supported regionalization of airports
and aviation and air traffic. So they are on our side. They
just need to remember that they voted that way. Thank you.
Mr. Calvert. Thank you, and I do agree, we do need a
professional football team, but we are not going to get in the
middle of downtown L.A. and Ed Roski's deal, and neither are we
going to bring in the Green Bay Packers to play Los Angeles.
[Laughter.]
Mr. Calvert. Thank you, Mr. Chairman.
Mr. Petri. Thank you.
Gentlemen, thank you all for the effort that went into your
testimony and for your taking questions and handling them so
ably.
This will conclude the first panel. Now it is my pleasure
to--well, you leave, and----
[Laughter.]
Mr. Petri [continuing]. The second panel joins us. Let me
introduce it, and do please come forward.
The second panel consists of the Honorable Ronald O.
Loveridge, who is mayor of the city of Riverside and a member
of the Ontario International Airport Authority. I understand
Ms. Lucy Dunn has had difficulty getting here. She will be
represented by Larry Brose, who is the vice president of
Investor Relations and Business Development of the Orange
County Business Council. They will be joined by Mr. Brian
Perry, chief legislative deputy of Councilman Dennis Zine, who
is testifying on behalf of Dennis Zine; and Mr. John Husing,
vice president, Economics and Politics, Inc.
Again, thank you very much for the effort that went into
your prepared statements. They will be made a part of the
record of this hearing in their entirety, and I would invite
you to summarize those prepared remarks in about 5 minutes,
beginning with Mr. Loveridge.

TESTIMONY OF THE HONORABLE RONALD O. LOVERIDGE, MAYOR, CITY OF
RIVERSIDE, AND BOARD MEMBER OF OIAA; LUCY DUNN, PRESIDENT AND
CHIEF EXECUTIVE OFFICER, ORANGE COUNTY BUSINESS COUNCIL, AND
BOARD MEMBER OF OIAA, ACCOMPANIED BY LARRY BROSE, VICE
PRESIDENT, INVESTOR RELATIONS AND BUSINESS DEVELOPMENT, ORANGE
COUNTY BUSINESS COUNCIL; BRIAN PERRY, CHIEF LEGISLATIVE DEPUTY
FOR COUNCILMAN DENNIS P. ZINE, THIRD DISTRICT, LOS ANGELES CITY
COUNCIL; AND JOHN HUSING, PH.D., VICE PRESIDENT, ECONOMICS &
POLITICS, INC.

Mr. Loveridge. Thank you and good afternoon to Members of
the House of Representatives. Let me first just thank you for
bringing public attention to the future of the Ontario Airport.
Two very quick stories. Yesterday I was talking to Kurt
Markwall from San Francisco, who described arriving in Terminal
2 at 6:00 p.m. and finding all the businesses closed and their
gates shuttered. He said it was like walking through a ghost
town.
Another quick story. I know you talked a great deal about
SCAG. They had a wonderful kind of gathering where we approved
an absolutely first-rate regional transportation plan. But they
had something like 30 or 40 different venues where people were
showing their wares. One of those was from LAX. They had some
great exhibits for what was taking place at the Los Angeles
Airport. We asked, how about Ontario? There wasn't a pamphlet,
there wasn't a mention. I value what is taking place at LAX,
but I was haunted by the fact that this was a regional
gathering and there was not a single piece of literature on the
Ontario Airport.
I submitted written testimony. Let me make seven points and
try to do that quickly.
The first point this is not a tug of war between two
cities, Ontario and Los Angeles. It has been emphasized,
Ontario is a regional airport. If I could speak specifically
for Western Riverside County, Ontario is our airport, and I
represent tens of thousands of air travelers, past and
prospective.
Second, and this is interesting to me, that in Western
Riverside County, the support for local control, I would use
the language, is just extraordinary. What is the scorecard?
Every city in Western Riverside County, except for one, the
Riverside County Board of Supervisors, the Greater Riverside
Chamber of Commerce, the Inland Empire Economic Partnership,
the Monday Morning Group--you name a group, and it has said yes
to local control of the Ontario Airport. I've been now mayor of
Riverside, as Ken knows, for some 18 years, and I can't
identify any other issue that has greater widespread support
than local control for the Ontario Airport.
I should note that some 46 other cities across the counties
of L.A., Orange and San Bernardino also joined the call for
local control of Ontario Airport.
I also think this is interesting. Those of us in elected
life read newspapers and read what the editorials say. It is
important to note that the editorial boards of newspapers
across southern California strongly endorse support for the
transport to local control.
In Press Enterprise, a recent editorial pointed out that
local control will eliminate the conflict of interest inherent
with the city of L.A. controlling a competing airport in
another jurisdiction at a time when LAX is rebuilding its own
passenger traffic, renewing its infrastructure.
The fourth point, and I think this was made earlier today,
is that support for local control is centered on a reality that
the Ontario Airport under control of LAWA is not working. And
it is stunning, the point that Alan Wapner made, we are now at
1980 levels, despite, as you will hear from John Husing, big-
time growth in population and in jobs in the Inland Empire. One
major reason for the decline of passengers, as we have
identified, is the high cost of flying out of the Ontario
Airport. It costs more.
I like this. This was in Tuesday's paper. The headline
story in it was: ``Southwest Flying Less From Ontario.'' In
2007, they had 53 daily flights. Now they have 33. There was a
description of why that is, and I like the language of the
representative from Southwest. `` `Apart from fuel,' Hawkins
said, `the airlines' cost of doing business at any airport also
plays a role.' He said, `It's the most important external
consideration,' calling it `one of the spices in the secret
recipe.' '' The point is that Ontario is higher; everybody else
is much lower.
We talked about the economic loss to this region. John
Husing will make that point much more effectively than I can.
But everything you read about this whole global marketplace
that we compete in, you need an international airport within a
reasonable distance, and that is what Ontario Airport provides.
Point number seven. There was an excellent statement, I
thought, by Mayor Villaraigosa. He is quoted as saying, ``This
comprehensive report underscores the irrefutable importance of
commercial aviation activity at LAX and indeed throughout the
southern California region on our economic well-being. From
passenger spending to the enhanced national and international
trade, LAX and our region's other airports are uniquely where
the action is.'' My point is that it is time for the action to
also include the Ontario Airport. Every other airport in
southern California is experiencing an increase in traffic.
My final point, and I would thank very much the Ontario
City Council, but after some 18 years as mayor of Riverside, I
am stepping down but not exiting public service. One of the
things that I look forward to is serving as a board member of
the Ontario International Airport Authority. I will dedicate my
best efforts to ensuring that Ontario International Airport
makes its expected important contribution to the regional
economy and to providing millions of southern Californians with
a convenient regional airport to meet their travel needs.
Thank you for your attention, and thank you for placing
this item, as you can tell by the coverage today, at the
attention of all of us in this region and across southern
California.
Mr. Petri. Thank you.
Mr. Brose.
Mr. Brose. Good afternoon, Chairman Petri and Congressmen.
I am Larry Brose, vice president of business development and
investor relations for the Orange County Business Council. Lucy
Dunn is jetting her way here right now. She is coming in from
northern California and unfortunately couldn't get to Ontario,
had to come to another airport. So if I may read her testimony,
I would appreciate that.
``Good afternoon, members of the subcommittee. My name is
Lucy Dunn.''
[Laughter.]
Mr. Brose. ``I am president and chief executive officer of
the Orange County Business Council and a board member of the
Ontario International Airport Authority.
``The Orange County Business Council is a leading advocate
for business on important issues locally, regionally, and
nationally. We work to grow Orange County's economy, to
preserve a high quality of life by promoting economic
development countywide, and serve as a unified voice for
business in America's sixth largest county.
``To understand why the Orange County----''
Mr. Petri. Guess what? You have been replaced. She has
arrived. You have been relieved.
[Applause.]
Mr. Brose. I have been upstaged.
Mr. Petri. Welcome, Ms. Dunn. Glad you could make it.
Mr. Brose. I will read, you answer questions.
[Laughter.]
Mr. Petri. Join us at the table. Come on up.
Mr. Brose. ``To understand why the Orange County business
community is vitally interested in the future of success of
Ontario International Airport, one would only need to drive
from anywhere in Orange County to Los Angeles International
Airport. Those of us in Orange County recognize that our
hometown airport, John Wayne Airport, is constrained. Until
2015, the number of passengers legally capped at 10.8 million
per year. Even if the cap were to be relaxed or lifted, there
is an absolute limit to how much of the growth and demand for
air service it can accommodate.
``In addition, due to its physical footprint, John Wayne
Airport is limited by its single runway for commercial jets.
``For a time, it seemed that El Toro Marine Naval Air
Station in Irvine might be converted to an international
airport. However, airport proposals were defeated by two ballot
initiatives, and eventually the airport opponents prevailed.
Ontario International Airport quickly emerged as the best long-
term solution for unconstrained airport capacity in southern
California to serve the large and growing southern California
market.
``If you had the good fortune to fly in and out of Ontario
International Airport, you know it is a convenient airport with
great ground access, great parking, and modern terminals and
facilities. Forbes named it southern California's best
alternative airport.
``Ontario International Airport offers parallel runways
that can accommodate the largest airliners in the world,
including the Airbus A-380. Ontario International Airport can
easily accommodate 12 million annual passengers. For residents
in northern Orange County, Ontario International Airport is a
wonderful choice because it offers the air service and nonstop
destinations business travelers demand and is close to home.
``Ontario International Airport is ideally and uniquely
situated to serve the needs of business and leisure travelers
in the four-county region. Additionally and very important to
the business community, Ontario handles a significant amount of
the region's cargo volume. I am convinced, under the governance
of the Ontario International Airport Authority, it will realize
its full potential not only as a major international airport
but also as a vital economic engine for the region.
``I am pleased and honored to serve as a board member of
the Ontario International Airport Authority, and I look forward
to working with my fellow board members to help Ontario
International Airport achieve success as an integral part of
the southern California network of airports. Thank you.''
Mr. Petri. Mr. Perry.
Mr. Perry. Chairman Petri, honorable Representatives
Calvert, Miller, Baca, my name is Brian Perry, and I am the
chief legislative deputy for Councilman Dennis P. Zine. He
represents the Third District in the San Fernando Valley
portion of Los Angeles. Regrettably, Councilman Zine was unable
to attend in person due to a conflict at this very moment with
a previous obligation in his district that he was unfortunately
unable to avoid or reschedule. Your invitation, he would have
been here personally if it had been possible.
Councilman Zine has been honored to serve as a Los Angeles
City Councilman, representing the Third District, the San
Fernando Valley, for the past 11-plus years. Prior to his
service on the Los Angeles City Council, he worked for 33 years
as a proud member of the Los Angeles Police Department. He is a
lifelong Angelino and has seen enormous changes not only in Los
Angeles but throughout the region over the past several
decades.
In addition to his service on the Los Angeles City Council,
he has served on the Board of Directors for the Southern
California Association of Governments, the San Fernando Valley
Council of Governments, the Independent Cities Association, and
the National League of Cities, and other local, State and
Federal decision and advisory bodies.
As an elected official in the city of Los Angeles, he
quickly realized that the decisions made throughout the entire
region have a direct impact on the quality of life for
residents in the city of Los Angeles. His message to you today
is to offer his insight as a member of the city council, and
his firsthand experiences and observations of the current
situation at Ontario Airport.
The Greater Los Angeles Area is reliant upon a system of
commercial airports for travel to and from the region. These
airports include Los Angeles International, Burbank, Long
Beach, John Wayne Orange County and, of course, Ontario
International Airport. In order to provide the best service
possible to all the residents of our region and to the
traveling public, it is essential that all five of these
airports provide quality service, competitive prices, and ample
availability of flights to and from the region.
Unfortunately, this has not been the case. Since 2007, the
total number of annual passengers at Ontario Airport has
declined by 37 percent. This is why he introduced a Council
motion in Los Angeles to review the status of Ontario Airport
and its relationship to Los Angeles World Airways.
This decline has driven more and more passengers to other
airports, most notably Los Angeles International, and led to
increased congestion on our roads and an absolute lack of
productivity for travelers who sometimes have to drive for
hours on southern California freeways just to take a simple
flight to northern California. This should not be the case.
Last year, Councilman Zine made an unannounced personal
visit to Ontario Airport so he could see things firsthand. What
he saw was disappointing. He saw a beautiful, modern airport
with a complete terminal closed due to lack of flights. He saw
approximately half of all the concession stands closed or out
of business. This was shortly after noon on a Tuesday.
During his visit, he also made an unannounced stop at the
Los Angeles World Airports executive office at Ontario
International Airport to speak with the onsite manager. He was
shocked to learn that the onsite manager was not, in fact,
onsite, and that there was actually a system of shared
management where two individuals served as general managers for
both Ontario and Van Nuys Airport on a rotating basis.
Councilman Zine is a strong believer in local control and
the consumer benefits of regional competition. Local officials
and stakeholders have a greater incentive to promote and
operate Ontario Airport with maximum efficiency. As Ontario
grows, the local economy grows and traffic is relieved on
southern California roads and highways. It is completely
counterintuitive that as the population in the Inland Empire
region has continued to grow, the service and availability of
flights at Ontario Airport has continued to decline.
While private airlines set the rates for their flights and
local airports only have a certain amount of influence over
these rates and flight schedules, the Councilman looked on the
Internet to review the costs of flights from L.A. and Ontario
to Sacramento. He found that a traveler from the Inland Empire
can travel roundtrip from LAX to Sacramento for $136 cheaper
than he can fly from Ontario on the same day, on the same
airline. This naturally creates a tremendous incentive for
these passengers to needlessly add to the congestion on our
freeways for a 1-hour flight they should be able to take from
their own backyard.
Any deal involving the transfer of Ontario Airport back to
local control must ensure that the city of Los Angeles and Los
Angeles World Airways not be held liable for bond indebtedness
related to the airport. If we can come to an agreement that
does not harm the city or LAWA and includes fair compensation
for the actual value and assets of the airport, then his
message to you is simple and straightforward. He joins the Los
Angeles Times, the Southern California Association of
Governments, community groups throughout the city of Los
Angeles, and many others in saying loud and clear that it is
time to set Ontario free.
In conclusion, he wants to thank you, Mr. Chairman and the
other members. A vibrant Ontario Airport is critical not just
for residents of Ontario and the Inland Empire but for the
entire region, including the city of Los Angeles. Local control
of Ontario Airport made under the right circumstances that do
not harm the city of Los Angeles or LAWA is an important first
step in reestablishing this airport as an economic engine in
the Inland Empire and provides positive benefits to the entire
region. Thank you.
Mr. Petri. Thank you.
Mr. Husing.
Mr. Husing. Thank you, Members of Congress. It is a
pleasure to be here today. My name is Dr. John Husing. I am a
private economist. I have been studying the Inland Empire now,
this year, for 48 years. I am also the chief economist of the
Inland Empire Economic Partnership, an organization dedicated
to increasing the prosperity of this region.
I have been taking a look at two things that are in my
official statement. One is why the decline in passenger traffic
at Ontario; and second of all, what has been the economic
impact of it.
First of all, allow me to characterize the two-county
Inland Empire area. Currently, it has 4.29 million people. That
is 400,000 larger than the State of Oregon. Out of the total of
50 States, 24 of them are smaller in population than these two
counties. The area had 1.3 million jobs before we got into the
recession. It still has 1.16 million today. It needs a strong
airport just for the sheer bulk and size of this region. The
economy here is recovering. Year over year, we are up 24,400
jobs this year over last year.
At its current pace this year, Ontario is going to be down
41.2 percent between the peak in 2007 and the 2012 figure. The
market as a whole, of which we are a part in southern
California, at the same time is down 6.8 percent. So this steep
reduction has meant a massive decline in Ontario's share of the
market, from 8 percent now down to only 5.4 percent. It had
been 8 percent all the way through from the late 1990s through
the middle of the 2000s. Now suddenly, it has slipped to those
levels.
It takes us back to the 1985 level of passenger traffic. So
in 1985, what is the difference in this area between now and
then? The answer is we have added 2.3 million people in the
Inland Empire since 1985. That is an increase in population of
120 percent. That is larger than several U.S. States, what we
have simply added. We have added 585,000 jobs since then, which
is doubling, and that is despite the decline because of the
recession. We have added two-thirds more businesses in that
time. So you are looking at an airport with double the
population, more than double, double the number of jobs, and
two-thirds more businesses, yet we are now back to a level of
passenger traffic from two or three decades ago.
There is no way that it is our economy's slowdown that
caused these kinds of declines. That makes absolutely no
logical sense, not with those kinds of numbers in terms of what
has happened in this region.
Looking, then, at what it is doing to this area to have
that occur, like any other area, we are in a competitive
economy where we have to compete for the reasons for companies
to come here. What has occurred is a consequence of a loss of
traffic or loss of passenger service at Ontario is 1.1 million
air passengers from the Inland Empire now are traversing L.A.
County to get over to LAX. This creates a costly burden on the
families and the businesses in this area, and as has been
repeatedly said, adding millions of vehicle miles on L.A.-area
freeways. Using a very conservative assumption on what are the
ground costs, the parking costs, the time lost to commuting,
all together that is a $48.5 million gift on the
competitiveness of the Inland Empire just simply for that fact.
Secondly, Ontario is, as was just stated, now a very
expensive airport for airlines to use. Airports don't decide
who goes there; airlines do, and they take a very careful look
at their costs. As Mayor Loveridge indicated, one of the things
that Southwest talks about repeatedly is the fact that it is
too expensive to operate from here at the levels they wanted
to.
One of the things I took a look at is there is strong data
from the Federal Government on every flight destination from an
airport. If you take the 38 destinations from Ontario that
represent a little over three-quarters of all the passenger
trips, what we find is there is an average 18.1 percent higher
cost of tickets from Ontario to that entire group of airports.
That is costing people who live in this area $128 million a
year for those folks that are still using Ontario, much less
those who have to make the trip into L.A.
For businesses, these may not even be the biggest costs.
Ontario's major harm to business is the loss of direct flights.
You want to get someplace, you want to get there as a
businessperson, you want to do it efficiently. The direct
flights have practically vanished to all but a very few
locations. I took again a look at those same 38 major
destinations, looking at direct flights that you can get from
LAX versus the few that you can get from here. I did a huge
reduction in the number to be conservative. Total time loss was
roughly 420,000 hours as a consequence of sitting in airports,
changing planes in order to be able to make those flights,
another hit of $17.5 million.
If we add the three things I just talked about together,
that is a cost of $198 million to the Inland Empire economy.
However, what didn't I measure? One, you can't get conventions
to come here anymore because conventioneers can't fly here. So
there has been a huge hit on the convention business, on the
hotels. We have lost tourists. I didn't even include those in
my calculations.
Then there is just to businesses, when there is a reduced
flight schedule to get places, you end up going someplace and
sitting around for hours to go to a meeting, and then sitting
around for hours to get a flight back here. Particularly, I
might add, for those of us who go up to Sacramento all the
time, the flight leaves, if I recall correctly, at about 10
after 6:00. You end up with a meeting at 10:30. You have
several hours in the capital. You can't get a flight back until
1:30. That is time, and time costs money to business folks.
In addition to that, when you have those kinds of costs, as
an economist, one of the things you always look at is what is
the multiplier effect of that. If you simply say for every
dollar lost there is another dollar that is lost elsewhere in
the economy, so a very small multiplier of 2, you get to a
half-a-billion-dollar hit on the Inland Empire economy for what
appears to be no good reason other than the fact that this
institution is not playing the role it used to. There is no
reason why a change should have occurred, and it really would
help this area enormously now that we are effectively--by the
way, I am running for Senate because we are going to be the
26th largest State.
[Laughter.]
Mr. Husing. As a nonpartisan, I might add.
But the fact of the matter is that this market needs an
airport to serve it that serves our needs and under our control
here. Thank you very much.
[Applause.]
Mr. Petri. Thank you.
I do have a couple of questions.
First, welcome, Ms. Dunn. I know you had a little struggle
getting here, and we appreciate the effort.
Ms. Dunn. It is a personal story that relates perfectly
today, Mr. Chairman, because my flight to Ontario was
cancelled.
[Laughter.]
Mr. Miller. And there is no backup flight available.
Ms. Dunn. And there was no backup flight. The only way,
sir, to get here was to travel to John Wayne Airport and travel
an hour or so. A 1-hour trip took 3 hours, and I apologize for
my delay, but a good example.
Mr. Petri. My question was maybe I'll give you a chance to
expand on that a little bit for other people. Why is it that
residents and businesses in Orange County care about Ontario
Airport?
Ms. Dunn. When you have the southern California economy as
a whole, Mr. Chairman, it is driving the California economy.
Orange County is a major jobs-creating force, one of the lowest
unemployment rates in the State; in fact, even lower, I think,
than the national average. It is incredibly important for our
businesses and travelers, our shippers, to have a
transportation system that is effective and efficient from so
many different vantage points.
As you know, business is not constrained by a county or by
a city but crosses boundaries all the time. In fact, southern
California, both Orange County and the Inland Empire, have
strong connections to an international market as well.
In the case of Ontario Airport, you compare it to, for
example, our own airport in John Wayne, which everyone in this
room knows is my favorite airport in the world. But the reality
is even if its right now current cap were expanded, its market
could still not handle all of the growth perhaps that this
region is slated to occur because it has only one runway, and
we need a system that balances off of each other.
When a company like Disneyland just recently invested $1
billion in their theme park in Anaheim to become literally the
largest employer in the Southland, you can't build any more
parking structures. You have got to have a transportation
system--air, rail, transit--that allows all of those visitors
to utilize everything.
And then the last and most important thing I want to share
with you, why Ontario is important, no one better than Orange
County understands the importance of local control. That
airport is locally controlled by five supervisors locally
elected. They understand the market. They understand the
sensitive balance between travelers and cargo shippers, and
they are able to adjust in a remarkable way that has made an
airport rather efficient and effective in a tough, tough
economy.
But it isn't all things to all people. It has to be a great
airport system, and that is why both business and visitors and
residents need Ontario to succeed as well.
Mr. Petri. Thank you.
Mayor Loveridge, I wonder if you could expand on a
statement in your prepared remarks that if you were to have
local control, it would eliminate any conflict of interest in
the management of the airport.
Mr. Loveridge. I think I tried to illustrate that with the
story as I began. It is a matter of where you give attention,
where you give your focus, what you see yourself responsible
for. Ontario Airport is here, but if you look at the five
people who run LAWA, the executive director, their focus is on
what it should be, on making LAX work.
I did realize I am part of a quorum of the Santa Ana Water
Planning Shed, so I need to leave very soon because otherwise
the quorum will not be in place. My apologies.
Mr. Petri. Thank you.
Mr. Miller.
Mr. Miller. Thank you, Mr. Chairman.
I have really enjoyed this panel. I am not impugning the
previous panel in any fashion, but we have heard information I
don't think many of us have heard generated before.
Mr. Perry, you are a breath of fresh air, Councilman Zine's
comments that you were reading, because the three Members of
Congress that live in this area know exactly what you are
talking about. I remember 3 years ago I took flights out of
Ontario that in August I tried to book that weren't available.
You go over there and it is like Death Valley. Every time I go
to the airport to pick up a relative, who try to come into
Ontario if possible, you look in the distance to even find a
plane, and they just don't exist, which is just sad because I
remember in my assembly days in the 1990s, Joe Baca and I both
went out of Ontario every week and there was never a problem.
The problem that Councilman Calvert and Baca and myself
have is we take the first flight out we can to get to
Washington to vote, and then we take the first flight home
after votes because we don't live in Washington. We live here.
And if we go to Los Angeles, we can book four or five different
flights. If we miss the one flight to Ontario, which is usually
a connection, we can't get back here until the next day. And if
we do take the flight out of Ontario in the morning, we can't
get there in time to vote because of the connection. If we take
it the wrong time of the year, the connection might not have a
flight going out of there at all because of weather.
So it has been a process that has occurred over the years
that has had a huge negative impact on our region here. If you
look at the Federal dollars that have been invested in Ontario
Airport, I know when I started representing this city and the
county in 1998, the amount of money I brought to the city
council when Gary Ovitt was mayor at that point in time, and
the existing city council, for infrastructure, for other
services that benefit that airport directly, you look back and
think we wasted a lot of money based on current dollars.
There might have been earmarks back then, Mr. Calvert. You
had to out me, didn't you?
[Laughter.]
Mr. Miller. But they were good earmarks. Nothing was named
after me.
[Laughter.]
Mr. Miller. It was after Ontario Airport and the city
council did the ribbon cutting. I just helped them get the
money. But, yes, thank you for outing me.
But, Mr. Perry, why do you believe that the carriers have
reduced air service to Ontario, and what would the benefit be
to the city of Los Angeles and LAX for successful transfer of
Ontario back to the local control?
Mr. Perry. Well, just from my own experience this morning
as I drove from downtown Los Angeles here to Ontario, open
freeway, clear lanes, drove pretty efficiently. The same time,
the traffic from Ontario to downtown Los Angeles was bumper to
bumper, was stopped, and I am hoping it is----
Mr. Miller. I well understand that.
Mr. Perry. So the Councilman is a firm believer, in
principle, of local control. The benefit to Los Angeles will,
of course, be everything that people have talked about--air
quality, congestion. But it also will allow the Los Angeles
World Airport to focus on making Los Angeles International
Airport one of the most competitive and best airports in the
world, which should be their focus. Unfortunately, it may be
that including focusing on Ontario is detracting from their
ability to do that, or at the very least not allowing the focus
that needs to be put in to make Ontario the best it can be is
lacking as well.
All in all, everyone needs to work together, and local
ownership and operation of Ontario would be a benefit to
everyone in the southern California region.
Mr. Miller. Well, Ms. Dunn, you recall back in the 2000s
the battle over El Toro?
Ms. Dunn. Yes.
Mr. Miller. The significant need for an airport in North
Orange County. At that point in time, about 2005, we were
talking about the privately funded concept of MAGLEV from the
convention center in Anaheim to Vegas. But the number-one
priority stop for that would have been Ontario Airport, where
you could have actually gotten a boarding pass at the
convention center at Anaheim. You could have gotten on that
train. Eleven minutes later they dropped you off at the gate
and you got on a plane.
That concept doesn't seem to even be in the distant horizon
any longer because of the underutilization of Ontario at this
point in time.
What is your opinion in Ontario's consideration in the
long-term solution? If you look at them to the air commuter
traffic in our southern California region, what do you see the
benefit being placed back in Ontario for the expansion of local
control?
Ms. Dunn. Well, Mr. Miller, if I may share, first, there is
a glimmer of hope on that first vision that you just presented,
where I just participated last week in the groundbreaking of
ARTIC, the Anaheim Regional Transportation Intermodal Center.
Mr. Miller. I'm very well familiar with that.
Ms. Dunn. As you very well know. And that is, as a hub,
could be like a new downtown for all of Orange County, where
all forms of transportation would go, and it is still the dream
that that station transportation would connect with Ontario;
again, another reason why Orange County--north, south, east and
west--we all need Ontario to succeed.
So the aspect of local control, as you mentioned,
critically important. When you are closest to your people, you
are best able to serve their needs. With all due respect, 60
miles away is not close to the market of Ontario International
Airport, and that is why we really do need to do the right
thing here.
Mr. Miller. They are elected officials from L.A. County
that just attended the hearing and just had to leave, and they
are feeling the same need as you do.
Mr. Husing, it has been nice reading you in the paper all
these years. I never listened to you give speeches. You have
done a great job.
A couple of questions. Why do you believe air carriers have
reduced their service to Ontario in recent years? And be
honest. And do you feel a positive future for Ontario Airport
if we do gain local control?
Mr. Husing. I think that the key issue is cost, cost per
passenger, what does it cost them to take a passenger out of
here versus anyplace else they can use their planes. They are
going to maximize the efficiency of their operations and
minimize their cost per passenger. With local control, we
strongly believe the cost per passenger here would be much more
reflective of what you generally find in regional airports.
Right now, it is completely out of line, and that has chased
away business that would otherwise be flying in here and flying
out of here and taking passengers.
Mr. Miller. And just for the record, the cost per passenger
in Ontario is $13.50. If you go to a comparable airport in Long
Beach, it is $6.64. If you go to Burbank, it is $2.09.
Mr. Husing. Precisely the issue.
Mr. Miller. Continue. I didn't mean to interrupt you.
Mr. Husing. No, thank you. Tell you what. I will ask the
questions.
[Laughter.]
Mr. Miller. Do you feel positive about the future of
Ontario?
Mr. Husing. There is no reason for what happened to have
occurred. This was a very, very efficiently run, working
airport handling 8 percent of passenger traffic in southern
California year after year after year until a change in
management occurred at LAWA, period, beginning and end of
problem.
Mr. Miller. And, Mr. Perry, for the record, I had a very
long meeting and a nice meeting with the director of LAWA on
Monday. We talked to the mayor's office last week. We were
trying to be very clear that this is not a hearing that is
intended to beat up on Los Angeles or LAWA at all. That was
never our intent. I hope we don't have to have another hearing
later that might be different, but that was not the intent of
this one.
Our concern as elected officials, and the Federal dollars
and the investment we have made, and the need we see for
regional capacity for air traffic, because if you look at our
freeways, they are impacted. The only thing nice about the
recession, and it is not nice, is that when I get up at 4 in
the morning to drive to LAX, I only think I have two
bottlenecks instead of 14 going to the airport, which is a sad,
sad thing to say for our economy, because when the recession
started you could see the impact on our freeways every month
decrease, and that is sad.
But when you have seen the same thing occur at an airport
that should be a good international airport decrease in a more
rapid fashion, that is heartbreaking.
I yield back and thank you, Mr. Chairman.
Mr. Petri. Representative Baca?
Mr. Baca. Thank you very much, Mr. Chairman.
I know that all of us are very much concerned from a region
perspective, and there are some of the mayors here and city
council persons that are here. But one of the other mayors that
was out here earlier--I don't know if he had to leave or just
stepped out for a while--but that is Paul Eaton as well, the
mayor from Montclair, that is very much concerned with this
region, along with us and the panelists and other speakers.
But let me start with Mr. Husing. One of the important
things that you talked about, I am very interested in the
population as we look at the population, what it was and how it
has grown to 4.9 million people. What is anticipated in terms
of the additional growth in the area, and what impact, then,
will that have on Ontario Airport? Because this area is
affordable. More and more people are moving into the Inland
Empire, both San Bernardino and Riverside County and
surrounding areas. Yet, with the growth in the population, what
impact would it have? And then what kind of traffic congestion
would it provide or give to the L.A. area if, in fact, the
growth in the population continues to grow, as we anticipate?
Mr. Husing. The Southern California Association of
Governments does a lot of socio-economic work to back up the
regional transportation program. In their forecasts, we add
between now and 2035 in this region 1.8 million more people
than we currently have. So right at the moment, we are at
roughly 4.3 million. Add 1.8 million. You do the math, a huge
area. We pass many more States in terms of our size.
To put that in context, the number of people we will add is
more than the number anticipated in Orange, San Diego, Imperial
and Ventura combined. The reason for that is very simple. We
have land, and you need land to build houses. Ergo, this is
where the population goes.
A similar forecast is made for jobs, that the job growth
out here will be also larger than those four counties combined,
and it will be by itself larger in both cases than either the
population growth or the job growth of Los Angeles County. That
is the future that we are staring at right now.
We need this facility very, very badly, and we need it to
really be prepared to handle that kind of a load going forward.
Mr. Baca. And that will have an impact as we look at--if we
don't go to local control and expand Ontario Airport, then the
traffic congestion will increase, because right now most of us
I know--Ken Calvert and I traveled from Corona and me from the
San Bernardino area, and then Gary Miller now from Ranch
Cucamonga into the other area. We are stuck in traffic going to
try to get our flights. With the increase of the population,
which means it is going to take us a lot longer to get to LAX
to try to get through a flight, not only getting through LAX,
but then we have to go through security. By the time we go
through security, and then if we find out that our flights have
been canceled, we have to run over to another airline, which we
have done at some times and have been over at American
Airlines, and that is another terminal, and we have the nice
terminals that you can go from one to another and still get
that flight if, in fact, we had them here. So that presents a
problem.
Could you just elaborate a little bit more in terms of the
traffic congestion that it would have and the impact? Or,
Perry, you could talk about that on the L.A. as well, because
traffic congestion impacts the lives of individuals and that
quality of life, which means that they are spending a lot more
time on the road, which means it impacts them and their
families and others where they can come here. And then also
when you talked about earlier the population growth, the mayor
here, Paul Leon, would like to see the possibility of
increasing businesses and attracting businesses. We can't do
that if we don't have the kind of an airport that would allow
business.
I will give you an example. When I worked for Verizon and
GTE, we were looking at the possibility of moving the
headquarters right here to Ontario because of the airport, but
it ended up going somewhere else, and other businesses are
thinking about this. Could you elaborate a little bit more on
that?
Mr. Husing. I think the thing that really disturbs me the
most about this entire issue as a southern Californian is the
fact that we have been working for years to try and get vehicle
miles traveled under control, whether it is SB-375 and trying
to get transport-oriented housing, sustainable community sorts
of thinking, whether it is getting people to rely more on
things like Metrolink, this has been the effort. This is the
only case I can think of, of an agency that has not been
working to reduce vehicle miles traveled but as a consequence
of their actions they are increasing vehicle miles traveled. It
is weird.
Mr. Baca. What does that cause? Accidents? Death? I mean,
you know, there is a lot that can go on, and we care about the
quality of life and the life of an individual that may be put
on the road where they wouldn't have to go if it was out here.
I mean, we don't think that aspect in terms of a life that may
be lost because we didn't do the right thing, and we have an
opportunity to do the right thing and save someone's life by
not putting them on that freeway in that congestion.
Mr. Husing. Well, another aspect of this that goes to a
point that you are making is this. For us to accommodate the
increases in population that we are talking about without
massively increasing commuting to the coast, you do want
companies to migrate to where the workers have moved. They are
moving there because they can afford the housing. You would
like the companies to come with them.
When you take an airport, which is a key asset for this
region's competitiveness, and you eliminate its ability to
allow companies to be competitive, then you reduce the ability
for us to draw those firms, nothing to do with air traffic, it
just increases the amount of commuting stacking up on those
roads because you don't get a balance between jobs and housing,
which is something we are all trying to accomplish.
Mr. Baca. Thank you.
Ms. Dunn, along the same lines, could you explain the type
of businesses that usually will flourish with the addition of a
strong secondary airport in large commercial markets?
Ms. Dunn. Well, clearly tourism, but in addition,
especially here, goods movement is hugely important, just
starting with UPS. I think Ontario is their second largest
market here from Atlanta, and goods movement is huge, of
course, for the ports of L.A.-Long Beach.
It is interesting because, as Dr. Husing has said, the dots
all connect in so many areas of both land planning and living.
Even just we are struggling always in southern California
meeting our air quality requirements set by the Feds. But when
you have a requirement that we add a million trips a year to go
to LAX when we could be just going 2 miles down the street, it
is crazy-making how we don't connect these dots in good land
planning and good environmental protection. Whether or not you
believe in all of the stuff that they talk about on greenhouse
gases, the fact is it is just good efficiency and
effectiveness, and that is what business is attracted to.
So bringing jobs to the Inland Empire, which has long been
a huge mantra for their success, their economic success, they
have been the housing community for Orange County for many
years, but this is a great opportunity for growth, and an
international airport will attract those jobs and those
businesses that marry beautifully with the residential
communities.
Mr. Baca. You are absolutely right. I think we have become
commuters that are driving either to L.A. or to Orange County
or San Diego or somewhere else because we haven't created those
kinds of jobs, and this would give us an opportunity to attract
and create jobs locally right here, where we can get many of
our students who are going through our colleges, our community
colleges, that will be able to obtain a job locally and keep
them here. I would love to keep my family here instead of
having them move somewhere else because they can't get a job
here.
But again, thank you very much. I yield back the balance of
my time.
Mr. Petri. Representative Calvert?
Mr. Calvert. Thank you. Thank you, Mr. Chairman.
I am going to bring up a name that nobody will recognize.
My grandfather's name is Pete Hamlin. And the reason I bring
him up is my grandfather operated a barbershop on Century
Boulevard just a couple of miles from LAX, opened up in the
1920s and operated it for 50 years.
So I have been going around--I am not here to bash L.A. I
love L.A. But since I was a little infant, I have seen L.A.
grow, and my grandfather would tell me stories. I guess that is
where the old chicken farms used to be, down there where the
airport was located. They started off with a single runway, and
they built that airport up and, of course, there were no
freeways. There was no 405, there was no 105, there was no 605,
there was no 91, all of which we get to travel on all the time,
and we have built those systems up. God knows, my friend Howard
Berman asks for more and more money for the 405, and every mile
of freeway we develop today isn't running $10 million a mile,
as you know, Mr. Petri. What is the 405 running right now?
About $100 million a mile, or more?
Mr. Petri. Probably more.
Mr. Calvert. Probably more. So the L.A. area is severely
impacted. I don't think there is anybody that would debate that
subject. How far can you develop LAX? How much more air traffic
can you bring in? How many more airplanes can you take into
L.A. and have it as a reasonable alternative to other
locations?
I think that is part of the thing. It is not just what we
want to do here for Ontario. It is what we need to do for L.A.
I get to serve on the Appropriations Committee on defense
appropriations, work with the L.A. airbase, and I can't tell
you, I hear from people who work there, the horror stories they
tell me about traffic and the cost of housing and so forth and
so on.
For a region, we need to develop Ontario Airport to meet
its obligation to southern California, because I think we are
losing business around Los Angeles because of the impacts of
development around the airport. There isn't any land left, and
the only way you can go is vertical and around the airport.
That is not such a great idea.
So I bring that up in the sense not to go after Los
Angeles. I guess we can debate what happened to the management
a few years ago at Los Angeles, and as was pointed out, we are
not here to bash Los Angeles. I think they recognize they want
to move in a different direction now, and I hope that is the
case because it is not just good for Ontario, it is good for
L.A. I think that point has been made.
This economy in this region has probably been more impacted
for a number of reasons, probably the construction industry--I
am sure John could get into that--but more than probably any
region in the United States as far as raw number of jobs. But
that wasn't the reason why the traffic flows went down. I think
everybody kind of knows that, and like I said earlier, we are
not going to re-litigate it. But I hope we can move to an
agreement, and I congratulate the mayor of L.A. and the members
of the City Council of Los Angeles for recognizing that truth,
that we need to get this back to Ontario to compete on a level
playing ground and to get this region growing again.
With that, Mr. Chairman, unless Lucy or anybody wants to
say anything--I know you all very well.
Mr. Perry. I would like to just interject that the co-
author----
Mr. Calvert. You didn't know my granddad.
Mr. Perry. Pardon?
Mr. Calvert. You didn't know my granddad.
Mr. Perry. I did not. The co-author of the motion
introduced by Mr. Zine is Mr. Bill Rosendahl, who represents
the area surrounding LAX, particularly Westchester, Playa del
Ray, and all of the areas along the coast that border LAX. So
his interest is, as everyone has been discussing here,
benefitting Los Angeles. This whole process can be and, I
believe, will be mutually beneficial for everyone involved.
Mr. Petri. Great. John, do you want to say anything else
about the housing industry? Are we coming back, by the way?
Mr. Husing. We finally are starting to see very tiny
increases in price.
Mr. Petri. In other words, we bottomed out. We bottomed
out.
Mr. Husing. We bottomed out.
Mr. Petri. We are on the way back. Lucy pointed out, Orange
County is always on top.
Ms. Dunn. But we need everyone around us to succeed as
well. We can't be an island.
I just wanted to thank you very much, Mr. Chairman and
committee members, for coming here, highlighting this issue. It
is so important, and I am really very, very thrilled that you
are here today.
Mr. Petri. Thank you.
Mr. Husing. If I might just add a personal comment also is
you might have detected a little hostility in my thinking on
this. I can't tell you how pleased I am to see L.A. coming to
the table with Ontario to try to put this to bed. This is
incredibly important, and I am glad that is beginning to happen
now.
Mr. Miller. Would the gentleman yield for a second?
Mr. Petri. Yes.
Mr. Miller. I would like to again state that I want to
thank the director of LAWA. We had a very positive meeting, and
the sentiment was very positive moving forward. With the
concurrence of the mayor's office last week, we had the same
type of conversation, and they are anxious to do it the proper
way. But I thank you for your statement because I think you are
trying to do the right thing. Thank you very much.
Mr. Baca. If you can yield to me before the chairman
closes?
Mr. Miller. I would be happy to yield.
Mr. Baca. Thank you very much. I just basically want to
thank the chairman for coming and having this hearing, and I
want to thank Congressman Gary Miller for taking the lead and
bringing us all together, and Ken Calvert and myself for being
here and hearing the witnesses and the testimony. I think it
enlightened us. It opened our ears and our eyes in terms of how
we can all collaborate and work together and make a positive
thing that would help our region and our area.
So again, thank you very much, Mr. Chair, for taking the
time, for being here. Hopefully you have a pleasant flight
flying back either tonight or tomorrow, and you make every kind
of connection, because it is important for you to be back with
your family as well. And again, thank you very much,
Congressman Miller, for having this hearing here today.
Mr. Petri. I am flying out of Ontario, and I am hoping it
is not canceled. I am sure it won't be.
[Laughter.]
Ms. Dunn. I will be happy to drive you to John Wayne.
[Laughter.]
Mr. Petri. I would like to join in thanking the panel for
your testimony, thanking my colleagues for participating,
particularly Representative Miller for inviting our committee
to come to Ontario and to learn more about this very important
problem.
Mr. Miller. Thank you, Mr. Chairman.
Mr. Petri. And hopefully being a catalyst in getting it
favorably resolved, and the city of Ontario for their
hospitality and helping with all of these arrangements.
With that, this hearing is adjourned.
[Whereupon, at 3:34 p.m., the subcommittee was adjourned.]