LA City Council approves much-discussed Van Nuys Airport lease

After a brief, heated exchange between a council member and airport officials — and an hour of closed-door discussions — the City Council approved a much-discussed lease for a hangar facility at the Van Nuys Airport on Tuesday.

By a vote of 11-2, the City Council approved the five-year lease with Bonseph Helinet LLC, which could be extended for up to 25 years, and includes 4.22 acres of land and 17,253 square feet of office and hangar space at VNY.

Council members Imelda Padilla and Hugo Soto-Martinez opposed the lease, and their colleagues Traci Park and Heather Hutt were not present for the vote.

With the approval of the lease, Bonseph Helinet – comprised of Helinet Aviation Services, the Castagna 1998 Trust and Bonseph Holdings Van Nuys Inc. – will be able to file claims for a $26 million redevelopment project at the site, including two new 30,000 square foot hangars, 15,000 square feet of terminal/store space, 72,000 square feet of renovated ramp areas, including other improvements.

In a closed session, council members voted separately 8-5 to settle a lawsuit filed by Bonseph Helinet, who sued the city after the council rejected the lease back in March.

Council members Marqueece Harris-Dawson, Eunisses Hernandez, Paul Krekorian, John Lee, Tim McOsker, Curren Price, Nithya Raman and Katy Yaroslavsky voted to resolve the dispute. Padilla, Bob Blumenfield, Kevin de Leon, Monica Rodriguez and Soto-Martinez were against it.

In his lawsuit, Bonseph Helinet accused the City Council of violating the city charter by failing to respond to the lease proposal within 30 days – and instead more than 15 months after the Board of Airport Commissioners approved the lease the city waited for at the end of 2022. The company also accused the city of overstepping its authority over Los Angeles World Airports, a separate division for LAX and VNY.

As part of the settlement agreement, Bonseph Helinet is expected to release all legal claims, conduct increased publicity regarding the proposed development and establish a community enhancement plan.

In return, the city and LAWA will grant the company the lease while requiring Bonseph Helinet to comply with all applicable specific plans related to the airport development and allowing the company to use a fire facility as a temporary space for up to five years of construction.

John Ackerman, CEO of LAWA, the city was able to negotiate community benefits in the lease terms.

However, when Padilla pressed to elaborate on these benefits, airport officials did not provide further details.

Mark Adams, LAWA’s director of government affairs, said the agency has received emailed input from some council members, but nothing concrete. He noted that there were “few specific inquiries regarding this (Bonseph Helinet’s lease),” but rather a general inquiry to ensure community benefits are developed for future projects.

Bonseph Helinet described improving a viewing platform at VNY in his plans, but it was unclear what other benefits this would bring.

Padilla — who represents the 6th District, which includes the airport and eastern San Fernando Valley neighborhoods such as Lake Balboa, Van Nuys, Sun Valley, Panorama City and others — criticized LAWA for its processes surrounding the lease, among other things.

The settlement agreement also seeks to resolve a complaint filed with the Federal Aviation Administration by the Van Nuys Airport Association, an organization comprised of VNY tenants. The complaint alleged that the city violated FAA regulations when it denied the lease in March and argued that airports like VNY that receive federal funding must agree to certain covenants or representations.

Curt Castagna, a partner at Bonseph Helinet, serves as president of the Van Nuys Airport Association, while Kathryn Purwin, CEO of Helinet Aviation Services, is a member of the group.

Castagna and Purwin could not be reached for comment. Brandon Young, an attorney for Bonseph Helinet, declined to comment, citing pending litigation.

Had the FAA upheld the complaint, the agency could have potentially withheld millions of dollars from LAWA. According to a letter from FAA Director Mark McClardy, the city of Los Angeles could have challenged the complaint through a judicial review, a so-called Part 16 proceeding.

According to documents provided under the California Public Records Act, the Attorney General’s Office submitted a response to the FAA that agreed in part that the City Council considered LAWA’s original bidding process for the lease to be “insufficiently competitive” under the City Charter, but at the same time it did the complaint was not rejected in its entirety.

Some San Fernando Valley residents loudly opposed the lease, citing negative environmental and health impacts. They also alleged that LAWA failed to mandate environmental protection efforts at VNY at the same level as LAX.

Helinet Aviation Services has stated that the lease is intended to continue the work done from the airport for more than three decades – providing medical delivery services to Children’s Hospital Los Angeles, UCLA, USC, Cedars-Sinai, UC San Diego and UC Riverside. In addition, the company provides helicopter and aviation services related to charter, production and aircraft management in the LA area.

The company has previously said it will not increase charter aircraft operations under the lease. Bonseph Helinet argued in his lawsuit against the city that the previous tenant of the helicopter support facilities at VNY had “allowed the site to fall into disrepair,” prompting the city to begin the bidding process in 2021 to build the site “safe and modern.”

While Helinet Aviation Services can reduce its reliance on carbon-based fuel by using electric-powered helicopters or reducing its fleet, FAA regulations prohibit airports from restricting flight operations at their locations. If charter jets or other aircraft wish to use the hangers suggested by Bonseph Helinet, the company must take them into account.

The Van Nuys Airport Citizens Advisory Council — a separate body whose members are appointed by elected officials to oversee VNY — recommended the city reject the lease, citing concerns that LAWA’s original bidding process was “uncompetitive,” which meant that other bidders had no equal opportunity to secure the contract.

Concerns about LAWA’s competitive bidding process — or “request for proposals” — arose from complaints filed by Air Center Aviation and another bidder, according to public records.

Air Center Aviation has held the master lease for the property with VNY since 1972 and added Helinet Aviation Services as a subtenant in 2013 under the management of LAWA.

Both Air Center Aviation and Helinet Aviation Services have a month-to-month lease for the 16231 Waterman Drive location.

Documents from 2003 showed that LAWA officials and Air Center Aviation tried to negotiate a 30-year lease for the property but were unable to come to an agreement.

In 2018, LAWA was looking for a new tenant for the property and referred to a 50-year rental agreement. According to city records, there are examples of other companies with leases longer than 50 years, such as Aerolease Association and Clay Lacy Aviation.

Air Center Aviation representatives protested the tender process opened in July 2021, claiming that LAWA and Bonseph Helinet “conspired” to eliminate them as anchor tenants.

The company also alleged that LAWA introduced restrictive language in the RFP to require accommodation of current tenants and said the RFP was extended with the restrictive language removed following the Fourth Amendment in September 2022. But two months later, BOAC voted to recommend a five-year lease to Bonseph Helinet – and it was that lease that the council rejected in March.

Brian Cochran, CEO of Pegasus, a company that develops airport terminals and operates air cargo warehouses, shared similar complaints with LAWA, claiming that Bonseph Helinet refused to cooperate and thereby prevented potential bidders from submitting a proposal.

Representatives from LAWA and Bonseph Helinet declined to comment on the issues, and the two companies claimed the tender complied with city regulations.

“On October 21, 2021, LAWA received a proposal from Bonseph Helinet,” a November 7 BOAC report said. “The proposal was reviewed by a three-member evaluation panel, which concluded that Bonseph Helinet, LCC is responsive and responsible. that the conclusion of this lease is in the best interests of the city.

“The Attorney General determined that the RFP process used complied with the requirements of Section 10.17 of the Administrative Code and all other applicable regulations and laws and was consistent with the interests of the City,” the report concluded.

LA City Council approves much-discussed Van Nuys Airport lease

ByAmelia Journalton

By Amelia Journalton

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