# 1 EXHIBIT 

# Trc115/

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DECLARATiON by the 

# SANTA MONICA AIRPORTASSOCIATION

and 

# NOTIFiCATION OF GRIEVANCES

relating 

# to 1984AIRPORTAGREEMENT

and the Santa Monica Municipal Airport (SMa) 

# GRANTAGREEMENTS 

# ,

# EXHIBIT 

# "A"

## III. HISTORY OFAIRPORT DEVELOPMENT AND PLANNING

This chapter summarizes the significant events shaping the controversy over SMO. Many of the present legal obligations and planning issues are rooted in events that occurred many years ago. The information presented here is primarily drawn from official records of the City of Santa Monica, supplemented 

### by information obtained from the United States Government, the Douglas Museum, and individuals familiar with Airport issues.


### A. EARLY HISTORY

1. Creation of the Airport The Santa Monica Airport isthe oldest continuously operating 

### airport inLosAngeles County. It was established in 1919, when the 

### City leased a portion of a barley field for aviation use. At that time, the aviation industry was in its infancy. The first users of the field were primarily pilots who learned to fly during World War L Many of the private pilots who used 

### the field were associated with the motion picture industry, including "stunt flyers."

In 1921 the United States Army established "Clover Field" at SMO. Military training was encouraged because of the perceived necessity of keeping the country in a state of combat readiness after the war.

The Douglas Aircraft Company moved to Santa Monica in 1922 and established a factory on Wilshire Boulevard where it built military aircraft. In 1924, aircraft manufactured by Douglas were flown on the first "round the world flight." This event attracted some 50,000 spectators to Clover Field, bringing public attention to the aviation industry and to the airport. In addition to building military aircraft, the Douglas Company developed the "DC" series of civilian airplanes. The DC·3 was the first successful mass-produced practical air carrier; 

### it presented a significant technological advance, and was successfully used for both military and commercial applications.



### 2. The Park Bond Election

In 1926, the voters of the City approved a bond issue for acquisition of the original 170 acre Clover Field site. The intent was to use the northern portion of the site for an aircraft factory and flying field, and the southern portion for a golf course. The bonds were retired in 1%5.

After the property was acquired, the Douglas Company moved its factory to the northern portion of the field, the Army established a base in the northeast corner, and the golf course was laid out over the southern portion. The City accepted a grant deed for the property and adopted an ordinance regulating the "Use and Parking of Aircraft in Clover Field."

In 1927, the California Legislature passed an act authorizing cities to build and maintain airports. They specifically provided that airports could be built on existing park lands.



### 3. Expansion of the Airport

In 1938, with the impending war in Europe, Douglas intensified its manufacturing efforts for the military. Douglas and the Army, citing safety considerations, requested that the City improve and expand the run\vay and other facilities at Clover Field. A plan was designed that involved expansion east and west of the original field.

The Eastward expansion involved the re-routing of

### Centinela Avenue to Bundy Avenue, the leveling of the hill adjacent to the runway at Cennnele. and the lengthening and paving of the existing runJf~Y. This was commenced, after approval by the City of Los Angeles in 1940. The westward expansion was accomplished during World War IJ1)y condemnation of existing residential zoned areas '"yest of the original airfield.



### 4. World War II

As the United States entry into the World War became imminent, the Federal Government leased the entire airfield from the 

### City. The current runway was constructed and improved with air traffic control facilities and hangars. The Douglas Company expanded, and began an all-out manufacturing effort, removing the golf course in the process. At its peak, the Douglas Company employed 44,000 people. As a result of its intense manufacturing activity, Douglas was largely responsible for a significant increase in the demand for housing in the area. The residential tracts to the north, east and west of the Airport, which had been sparsely occupied throughout the early history of the field, were subdivided for residential construction during and immediately after the war. . . 

### B. Post-War Planning

1. Return of City Control

After the end of \Vorld War II, the Army completed the westward runway expansion and returned the Airport to City control by executing of an "Instrument of Transfer." Among other things, the Instrument of Transfer contains a covenent by the City that no part of the airport will be sold or used for other than airport purposes without the consent of the Federal Government.

In the late 1940's and early 1950's, SMO became a base for significant general aviation activity. It should be noted that prior to World War II. private use of aircraft was not prevalent, general aviation, as it is known today, was still in its formative stages in the post-war period. In the late 1950's, Douglas shifted its manufacturing emphasis from propellor tojet aircraft. As SMO could not accommodate large jets on its 5000 foot runway, the center of Douglas' aircraft manufacturing shifted to Long Beach. However, research and development of missile production continued at the Douglas Santa Monica facility.



### 2. The Luckman Plan

In the late 1950's, the City retained the architectural firm of Pereira-Luckman Associates to develop a master plan for SMO. The "Pereira

### Luckman Plan", completed in 1958,envisioned Santa Monica asthehub oftheaerospace and electronics industry inSouthern California. Itwasbased on SMO's "destiny" to be the leading general aviation airport in the nation, because of its location and projected volume of operations. An airport designed to accommodate substantial corporate jet traffic was planned, featuring development of a terminal. office complex, hotels and restaurants, and new aviation facilities.

In 1962, after commissioning the engineering firm of Henry Babcock to perform a financial and technical analysis of the Luckman Plan, the 

### City Council approved Phase [of the project. This Plan stands as the currently approved Master Plan forSMOonfile with theFederal Aviation Administration (City Map #2556-A).The Douglas Controversy
The Luckman Plan avoided the issue ifwhether Douglas would continue to occupy its facilities north of the Airport. In 1962, Douglas proposed condemnation of approximately 140 acres of residential property to the north and west of the airport. In order to construct its corporate headquarters and expand parking facilities. A citizen outcry erupted in Sunset Park. The citizens proposed that the City close the Airport rather than allow condemnation of residences.

In response to the citizens proposal, the City Attorney wrote an opinion that, because of the Instrument of Transfer and other contracts 

### between theCity and the United States the Citycould notunilaterally close the Airport. The City Council offered to allow Douglas tobuild onboth sides of the Airport. Douglas rejected the proposal, and ten years later, the Santa Monica factory was closed.

The Airport, however, remained. During the early and mid 1960's SMO rivaled Van 

### Nuys Airport 

### as the busiest general aviation airport in the nation, reaching 

### a peak of 374,000 operations 

### in 1966. Noise from aircraft using SMO, tolerated previously because of the important role Douglas played in the local economy, grew both in volume and as a source of community annoyance.

In 1964, the City entered into a lease with the [anss Development Corporation for construction of the office building/terminal proposed by the Luckman Plan. In the mid-1960's, the City entered into several leases with fixed base operators (FBO) for parcels on the airport property, most of which expired in 1979. The City also entered into several grant agreements with the United States for construction of the Air Traffic Control Tower and several runway improvements and navigational aids. The grant agreement for tower construction (expiring in 1988), the lease for the tower (renewable by the United States until 2015). and FBO lease with Cloverleaf Aviation (expiring in 1996) all contain language indicating that SMO must be operated as a public use airport. 

### C. Lej;al Controversies

1. The Noise Controversy and the let Suit

In 1966, Western Commander, an FBO at the Airport, began sales and service of the Jet Commander, an extremely nojsy airplane, emitting a high-pitched piercing whine that annoyed citizens living near the airport. The City imposed some regulations intended to limit jet operations; it did not, however, ban jets as citizens had requested. In late 1966, 232 homeowners filed suit against the City for damages resulting from jet noise, (Nestle v City of Santa Monjca.)

.

N.e.s..tl.e: ultimately reached the State Supreme Court, and established the precedent that an airport operator could, in certain circumstances, be held liable for damage caused by airport noise. The precise issue of whether noise from SMO was sufficiently severe to warrant liability was never established, After hearing testimony from noise experts, appraisers, City officials, and residents, the trial court found that noise from planes using the airport was not so severe that it diminished the value of the plaintiffs' properties, and entered judgment for the City on the condemnation claim. This finding was based on the operation of the airport in November, 1966

-- total annual operations of 356,000 and 5·6 turbojet operations per day. The Court of Appeal affirmed the decision of the trial court.

In 1972, the California Supreme Court affirmed the judgment of the trial court on the condemnation claim. However, it reversed the trial court's ruling that the City was immune from liability for nuisance, and remanded the case for a trial on these issues. In the original trial, court found that noise from the airport was not a nuisance. The question of whether this finding precluded trial of the nuisance issue on remand was never resolved, as the case was settled and dismissed after the City adopted an ordinance banning all jet aircraft. While the settlement papers do not reflect this, there is no doubt that the jet ban was the motivating cause behind the settlement.



### 2. RecognitioD of the 

## Noise Probl~

In the late 1960's, noise became a recognized form of industrial pollution, and governments at all levels began to address the problem. The County of Los Angeles retained the Northrop Corporation to measure noise at all public airports in the County. Based on this analysis SMO was designated as having a "noise problem:" this designation was deleted after the Cit)' adopted a ban un jet aircraft. The State of California adopted airport noise standards which required all airports to reduce noise below a "Community Noise Exposure Level" (CNEL) of 75 decibels (dB) by 1970, 70 

### dBby 1980.and6SdBby 1985.

3. The Airport Neighbors' Forum and Noise Regulations

In 1974, an Airport Neighbor's Forum consisting of representatives of neighborhood and aviation interest was e"stablished. The forum developed several proposals for mitigating airport noise that were subsequently adopted as City regulations. Notable among these proposals was a flight pattern requiring a straight departure to the west, prohibiting turns before Lincoln Boulevard.

In 1975, the City adopted a Noise Element of its General Plan which included noise contours prepared by the consulting firm of Bolt, Beranek & Newman.

Between 1973 and 1977, the City Council adopted several ordinances intended 10 reduce airport noise. They included:

A total ban on jet aircraft 

### ASingle Event Noise Exposure Level(SENEL)limit of100dB. A curfew on departures between 11:00 p.m. and 7:00 a.m. A ban on helicopter pattern flights. A prohibition on "touch and go" pattern flights on nights, weekends, and holidays. 

### 4. The First Federal Court Challenge

In 1977, the Santa Monica Airport Association, representing local aviation interest, filed suit in federal court to invalidate these noise regulations on grounds that they were preempted by federal laws regulating aviation and interfered with interstate commerce. Trial commenced in 1979; voluminous evidence on aircraft noise, effects of regulations on air traffic and commerce, and related matters was presented. In August. 1979, the trial Court rendered judgment, as follows:

a. The City, as proprietor of the Airport. is liable tor damage caused by noise. In order to protect against this damage and to protect its environment, the City may enact reasonable regulations intended to abate aircraft noise.

b. The jet ban was invalid because it irrationally discriminated between aircraft on the basis of engine type and not noise level. That is,jets such as the Cessna Citation were excluded from SMO although they made less noise than propellor aircraft that were allowed to use 

### SMO. c. The 100 SENEL limit, the curfew, the ban on helicopter patterns, and the touch and go restrictions were upheld as reasonable laws which did not interfere with federal control of the airspace and did not directly burden interstate commerce.

d. The court did not find it necessary to resolve conflicting testimony as to the precise noise problem at SMO and numerous other similar matters,e, 

### Thecourt expressly declined torule onwhat would happen ifthe Cityreduced its SENELlimit soasto exclude alljetsaswellas

allpropel lor ajrcraftmaking comparable noise.

5. The SecQnd Federal CQllrt Challenge Afterrhejudgement, Dr. Karl Kryter, author ofthe leading text, The EffectofNojse on Mao (1970),and witness forthe City, prepared a technical repo.(,showing forecast noise and fleetreductions from various possible SEr<EL limits. InNovember, 1979,the CityCouncil adopted an ordinance 10"VVer1ng 

### theSENELlimitfrom 100to85dB. ANegative Declaration ofenvironmental impact was approved, over the objections of aviation rnt er-es whoclaimed that some ofthe technical data were faulty and that impacts on regional and national aviation systems had notbeen studied. National aviation interest brought asecond suit in federal court challenging the 85dBlimit ongrounds that itwas adisguised jetban, that itinterfered vvih interstate commerce, and that no Environmental Impact Report (EIR)had been prepared asrequired by California law. Judge Hill, who had presicled overthe 1977Santa Monica Airport Association case, granted apreliminary injuction against the ordinance before iteverbecame effective. The injuctionwas based on thejudge's initial conclusion that the ordinance was an attempt toevade his ruling invalidation thejetbanand that itprobablydirectlyburdened interstate commerce. He declined torule ontheEIRclaim, holding that the question should be decided by the state courts. D. j\ecent Planning Studies

1. The ECQnomic Research Associates Stud)' AbOll.t1970, itbecame apparent thatthe Douglas Company was leaving SantaMonica. Theeconomic consulting firm ofEconomicResearch Associates prepared areport forthe City showing that the value ofthe Airport property for officeand retail development far exceeded its value as anairport. The AirportCommission and the Recreation and Parks Commission evaluated proposals fordevelopment ofpark ao~ revenue-generating development on theDouglas site. Arenewed controversy over closure oftheAirport developed, resulting inanopinion ofthe State Attorney General that theAirport couldnotbe closedbecause ofvarious legal obligations.

..

2. The Williams-Kuebelbeck Stud), and the AUQ)'Q Group RepQrt
Most oftheFBOleases expired in 1979. TheCity Council contracted with theWilliam-Kuebelbeck economic firm to evaluate the revenue impact ofseveral development scenarios forthe airport property. TheWilliams-Kuebelbeck report, produced in 1980,contained similar conclusions tothe 1970Economic Research Association report. While revenue potential from aviation uses was substantial, it 

### was farless that the potential revenue from mixed commercial uses. TheCity Council notified airport tenants onmonth-to-month leases that their tenancies would beterminated in oneyear. In 1982 theArroyo Group wasretained tostudy alternative physical layout plans fortheAirport property. Theproduct 

## atthis study was a comprehensive assessment ofvarious land use alternatives.

. E. The Present CQntrQvers)'

InJune, 1981 1

### theCity Council, adopted aResoluti~declaring itsintention toclosethe Airport when legally possible, todevelop interim aviation facilitieS onaportion oftheproperty, toadopt acomprehensive noise abatement program, and todevelop theresidual property foruses compatible with other community needs.

Two FBO'sleftSMO during this period. WingsWest, which wanted toprovide scheduled commuter service, moved to LAX. BrilesWing & 

### Helicopter was evicted in 1981following several crashes involving its helicopters.

After adoption ofthe City Council policy resolution, the Santa Monica Airport Association (SMAA)filed alawsuit inState coud and an administrative complaint with the FAA. The claim alleges a concerted activity by 

### the City to close SMOdirectly or indirectly, and has three primary legal bases:

a. TheCity isimpairing the utility ofthe airport which, under federal law and contracts, must bekept open forpublic use without unjust discrimination and without interfering with interstate commerce.

b. TheCity isattempting totransfer land devoted toairport purposes bythe Instrument ofTransfer and.t.he1926Park BondElection by which the Airport was originally acquired.

c. No study ofthe environmental impacts ofthe City's 

### actions hasbeen performed. In addition, individual FBO'shave also sued the City claiming violations ofvarious contractual development rights and unfair trade practices. In 1982, the United States Department ofJustice informed the City Attorney that itintended totile suit against the City forviolations of federal law and contracts inthe operation ofthe Airport. TheCity responded that itdid notbelieve itwas acting unlawfully, and requested an opportunity to resolve the matter amicably.
F. Analysis Qf Cit)'·s Legal ObligatiQn tQ Maintain SMa.

According tothe City Attorney itappears theCityisobligated tocontinue operating the airport due tovarious binding commitments contained inthree documents:

o 

### The 1926Park Bond Election, bywhich the original land supporting CloverField and theold Municipal GolfCourse was acquired. The 1948Instrument ofTransfer, bywhich the United States returned control Qfthe Airport tothe City after world War II.

The Grant Agreements with the United States and the leases tothe United States executed after approval ofthe 1962Airport Master Plan.

While theirrevocable dedication ofthe airport property topark orairport uses under the 1926Park Bond isQpentodebate. there seems littledoubt that both the Instrument ofTransfer and later contracts with the United States are specifically enforceable. There does not seem tobea realistic possibility that acourt would rule that the City possesses thepresent ability tocloseSMO;the question becomes the length and sCQpeQfthe City's commitment to operate the airport.

Thecommitment tooperate SMO,interms oftimeand scope ofservices offered, areasfollows:



## IlMI: g;QpJ;; 1988(lastgrant expires) Runwayand Toweronly 1996(private lease expires) Recreational Airport 2015(tower leaseexpires) Utility Airport Transport Airport

### Perpetuity (Instrument of

Transfer and Park Bond) Fully Developed Airport Itisthe City Attorney's current position that acourt would probably rule.: I. TheCity must keep SMOopen tothepublic until 2015. 2. TheCity may setreasonable noise goals, and meet them bydesigning an appropriate fleetmix,aviation base, and noise control program. 3. Ifthe aviation base provided is too small orthe noise regulations to strict, the court is likely torule that the implementation of theAirport Planimpermissible burdens interstate commerce andrequire that anew plan bedesigned, orjeopardize residual land development by enjoining transfer ofresidual land through astrict reading oftheInstrument ofTransfer orPark Election.
G. Current Planning Process

Following aseries ofnegotiation meetings between the CityManager and theFAAinresponse totheFAA's notice ofintent to filesuit, the City agreed to plan in good faith forthe operation ofSMOconsistent with the City's legal obligation and environmental goals. TheCity Council authorized consultant contracts forthe preparation ofan Airport Master Plan and arelated Noise Study. The City and the national aviation interest, with the consent ofthe FAA, agreed to dismiss the pending federal court action on the condition that specific airport layout recommendations bepresented tothe CityCouncil forapproval nolater than November 13,]983.

This report isintended to satisfy the 

### City'Sobligation toprepare therequired studies and recommendations. 

# From Don Brandsen: Chairman of the Legal and Political Action Committee. This report is from the writing of the City Attorneys office. As a whole it spells out one of the most truthful statements ever produced by this City about SMa. Except for some n~inor details and a few political statements herein contained this document is submitted to the BOD of.SMAA as the basis to spell out the history, conflicts, and settlements at SMa from 1919 to 1983. The Chairman therefore moves that SMAA accepts this as a document of historical fact.