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The Mother of All Lowballs

Having been involved in several airport inverse condemnation/nuisance cases in our younger days, as well as some direct eminent domain ones involving airports, we have difficulty  visualizing two more deserving opponents confronting each other than two airports. Still, reality is not to be denied, and we take note of Ontario (that’s Ontario, California, not Canada) and Los Angeles going at each other, with the City of Ontario, threatening Los Angeles with the use of the power of eminent domain to gain full possession and control of Ontario Airport which at the moment is owned by these two cities’ joint powers authority, but operated by Los Angeles.  See Katie Lucia, Spat Over Control of Ontario Airport Taxis Toward Court, L.A. Daily Journal, April 17, 2013.

Of late, the Ontario Airport has come on hard times, having suffered a 40% decline in air traffic between 2007 and 2012. Ontario claims this is no accident and avers that — according to one of Ontario’s lawyers — it is the fault of Los Angeles’ “siphoning resources from Ontario to [LAX] and causing airline passenger traffic to drop significantly in the past six years.” So Ontario wants to take over that airport and fend for itself. Since the Ontario Airport is owned by an LAX-Ontario joint powers authority this is not likely to be an amicable divorce.

The LAX folks who historically have been noted for abusive precondemnation practices (and still are) when it comes to using eminent domain, see Los Angeles v. Superior Court, 194 Cal.App.4th 210 (2011),  having found themselves in the position of would be condemnees, are  showing signs of being born again, and suddenly understanding the plight of a condemnee, at least compensation-wise.

LAX avers that the fair market value of the Ontario airport is “about” $475,000,000, give or take, which it would like to collect  as the price of turning it over to Ontario. On the other hand, Ontario, having duly consulted its experts, contends that the fair market value is in the range of minus $78,000,000 to minus $104,000,000 — that’s minus $78 mil to minus $104 mil. Ontario (the buyer) would thus appear to want to pay nothing, and beyond that to be relieved of a negative-value asset worth -78 million smackers just for the favor of taking that airport off LA’s hands.* We are trying to keep a straight face as we type these figures, but hey man, that’s what it says in the newspaper in black and white.

In the meantime, Ontario has lodged a claim against Los Angeles (which in California is a precondition to filing suit, other than a direct or inverse condemnation action, against a government entity), thus suggesting that the coming litigation is likely to ivolve issues other than just condemnation valuation.

At this point, we could easily launch into a bit of reminiscing which would have to be a lengthy, probably multi-volume tale of our litigational exploits against airport folks, but neither we nor you, dear reader, are young enough to pore through all that. By way of a sampling, see, e.g., Greater Westchester Homeowner’s Assn. v. City of Los Angeles, 26 Cal.3d 86 (1979), Stone v. City of Los Angeles, 51 Cal.App.3d 987 (1975), and for good measure, Nestle v. City of Santa Monica, 6 Cal.3d 920 (1972), Baker v. Burbank-Glendale-Pasadena Airport Authority, 39 Cal.3d 862 (1985), and Fields v. Sarasota-Manatee Airport Authority, 953 F.2d 1299 (11th Cir. 1992), to show you that we are not in the habit of picking on Los Angeles.

To sign off with our usual words of parting, stay tuned. This one should be fun.

______________________________________________________

* Until other, more impressive figures appear on the scene, we propose to call this offer “The Mother of All Lowballs.”

 


The purpose of this blog is to provide a forum for people, whether eminent domain professionals or not, for exchange of ideas and a discussion of eminent domain news and issues. It does not provide legal advice. Questions concerning actual cases should be directed to the readers' own legal, appraisal and real estate advisers.

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