Fate of Santa Monica Airport Up To Federal Court

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On October 31, 2013, the City of Santa Monica filed a complaint in federal court against the United States of America and the Federal Aviation Administration ("FAA") with the hope of confirming its alleged right to control the fate of the Santa Monica Airport.  Both sides agree that:  (i) the City leased the airport property to the United States in 1941 to support the war effort, (ii) the United States made substantial improvements to the property, (iii) the United States terminated the lease in 1948, (iv) the 1948 instrument terminating the lease contained a reversionary clause, and (v) the reversionary clause is triggered if any property that was transferred by the instrument is "used, leased, sold, salvaged, or disposed of by [the City] for other than airport purposes without the written consent of the Civil Aeronautics Administration . . . ."  However, both sides do not agree as to the legal effect of the reversionary clause.  Whereas the City contends that the reversionary clause simply permitted the temporary leasehold interest (which allegedly expired in 1953) to revert back to the United States, the FAA contends that if the reversionary clause is triggered title to the property is transferred to the United States.  

The legal effect of the reversionary clause came to a head as a result of the surrounding neighborhood's discontent over airport operations.  Within the last decade the City has made numerous attempts to curtail the impacts associated with operations at the Santa Monica Airport, including attempting to institute a ban on jets.  The ban was rejected by the FAA, and a federal court subsequently upheld the FAA's decision. Recently, the City has intimated that it would like to close the airport.  The FAA, however, has asserted that as a result of the reversionary clause, the City must operate the airport in perpetuity.  The City has alleged a number of claims for relief in its complaint, including a quite title claim and a couple of takings claims.   

Earlier this month the FAA filed a motion to dismiss the action.  In the motion the FAA asserts, among other arguments, that the City's quite title action is time-barred, that under the Tucker Act the takings claims must be adjudicated in the Court of Federal Claims, and that the takings claims are not ripe.  The City filed its opposition on January 17.  The hearing on the motion to dismiss is set for February 10, 2014.  

If you have a few additional seconds, I recommend looking at the old pictures of the airport in the complaint. 

Topics:  Airports, FAA, Reversionary Rights

Published In: Commercial Real Estate Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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