The Sky is already Falling at Santa Monica

santa monica airport smo closure
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American Flyers Closing Santa Monica Flight School
a/k/a
New Santa Monica Airport Fuel Provider to Take Over Sunday
And
Typhoon closure
[airport restaurant at SMO]
a/k/a
TaskUs lands new HQ at Santa Monica Airport

Perhaps it was naïveté about how airports really operate. Maybe it could be attributed to the lack of advisers with airport business experience. One might try to excuse it because the battle generated so much controversy and political heat while consuming so much agency time/effort.

The irresolute resolution exhibited by the Santa Monica Council to close the airport by any means may have caused the FAA leadership to wilt. The creative, persistent attacks by the Council and its Counsel caused the FAA to issue orders to “cease and desist.” Six months ago, one local writer characterized the SMO campaign as follows:

The City has increased the rents on businesses at the airport in amounts far in excess of that which is permitted by state and federal law. The City has demonstrated its intent to ignore the law, the Grant assurances and the Agreements which it entered into lawfully so many decades ago.

For any of these reasons (and excluding some bizarre conspiracy theories), the Administrator on January 28, 2017 signed a compromise agreement which included the following provisions:

smo santa monica airport runway

The agreement requires the city to maintain continuous and stable operation of the airport for 12 years, until December 31, 2028, and after that the City has the right to close the airport.

In recognition of the city’s authority to make decisions about land use, the agreement allows Santa Monica to shorten the airport’s single runway to 3,500 feet from its current length of 4,973 feet. The city is obligated to enter into leases with private aeronautical service providers to ensure continuity of those services until the runway is shortened and it decides to provide such services on its own.

Mutual cooperation between the FAA and the city enabled us to reach this innovative solution, which resolves longstanding legal and regulatory disputes,” said FAA Administrator Michael Huerta. “This is a fair resolution for all concerned because it strikes an appropriate balance between the public’s interest in making local decisions about land use practices and its interests in safe and efficient aviation services.”

  • Closure of Santa Monica Airport to all aeronautical use forever as of December 31, 2028
  • The airport’s runway shall have an operational runway length of 3,500 feet, significantly reducing jet traffic
  • S. Government acknowledgement that City of Santa Monica has the right to establish its own proprietary exclusive fixed based operation (FBO) services
  • Airport property released from all deed restrictions
  • Consent decree
  • Settles all legal disputes between City and the federal government about the Airport

It is pretty clear that the sky over SMO is already falling!

The naïveté hypothesis gained considerable credibility with the recent publication of articles about the departure of American Flyers from SMO and the conversion of the very successful Typhon Restaurant, which drew many customers to enjoy the airport while watching the planes, into office space. The QUICK demise of two here-to-for successful airport businesses confirms that the airport will not last until 2028, the date that the City “promised” to keep its hated airport open.

smo airport business closing

As anyone knowledgeable about the finances and economics of airports would have told the FAA, an eleven year termination date is really an immediate death knell. Examples of the obituaries for SMO’s businesses:

  • The owners of airplanes based there require long term hangars for their aircraft and are seeking alternative homes.
  • The commercial ventures at airport must pay the airport owner a portion of their revenues. That payment to their “landlord” reduces the margin of their businesses. A prospect of ever declining returns is a catalyst for getting out of SMO and a deterrent/bar to investing.
  • The last tenant at SMO will have limited alternatives and may be buried there, too.

A careful examination of the “a/k/a” headlines is most revealing. The “spin” of the headline has been set to minimize the negative impact of the real effect of these two departures.

More accurate headlines might read like these:

#1

Santa Monica Business News

Safety Diminished and Good Jobs lost

City’s Aviation Adviser offers to watch the Self-Service Pumps of the Former Full Service FBO and Successful Flight School leaves

American Flyers did not just pump gas for planes. Its range of safety services include (all positions were paid above minimum wages):

  • They provided line attendants who are trained to fuel aircraft. Sloppy transfer of the gasoline into a plane can result in accidents.
  • American Flyers offered maintenance services to small GA aircraft.
  • The company’s primary line-of-business was teaching people how to fly, to maintain their safety skills and to improve their levels of competence. The school attracted students to SMO and its teachers are well paid. All of those economic advantages will now go to Scottsdale, AZ.

It is extremely suspicious that Aeroplex/Aerolease Group also holds a contract with the city of Santa Monica for “property management of specific airport leaseholds, as well as other airport consulting services.” The Santa Monica Lookout, best local source for news and information, somehow failed to mention the close relationship between the City and its consultant in the context of this contract award. It certainly inspires great confidence that the new self-fuel service supervisor will “ensure continuity of those services.” The relationship between the City and its consultant/contractor was revealed in the AINonline article.

#2

City’s Rent Increases and Difficult conditions

drives Highly Regarded epicurean Typhon Restaurant to Close

Replaced by another business process outsourcing startup

The story here is less aviation related but adds further evidence of the City Council’s at-any-cost efforts to close the airport. Trading a stable, attractive restaurant, which brought people to the City, for a start-up which may fail (90% rate according to Forbes) seems to be bad for the City’s economy.

One of the key positive elements cited to support the closure of Santa Monica was a guarantee that SMO will be open until 2028. At the current rate, the City may gleefully post RIP signs on the runway by 2018. Henny Penny’s warning seems stronger than the FAA’s agreement.

santa monica airport closure

The FAA should aggressively work to protect the existing tenants.

This may be the only airport website without a single picture of a plane.

santa monica airport website

 

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