After more than two hours of public comment, the Long Beach City Council voted 8-1 at its January 24 meeting to shelve a staff recommendation to move forward with the development of a federal inspection station (FIS) at Long Beach Airport (LGB).
Only Councilman Dee Andrews supported the U.S. Customs facility, although, according to several sources, three other councilmembers – Lena Gonzalez, Jeannine Pearce and Rex Richardson – had indicated support prior to the meeting. They switched their vote at the urging of Mayor Robert Garcia, who wanted a unanimous vote.
(Business Journal photograph)
The decision comes nearly two years after a formal request for a FIS by JetBlue Airways. Had the proposal been approved, customs and immigration services would have been allowed at LGB, enabling operators to offer international flights by shifting one or more of their current daily allotment of flights.
A statement issued by JetBlue said the company was “extremely disappointed” that the council rejected the proposal after years of delays and a study that validated the safety, security and positive economic nature of the project. “We will evaluate our future plans for Long Beach, as well as the greater Los Angeles area and California.”
In July of 2015, five months after JetBlue’s initial request, the city council determined that a feasibility study would be the best course of action in helping to decide whether or not to approve a FIS. In January of 2016, the council awarded a contract to Pasadena-based Jacobs Engineering Group Inc. to conduct the study.
The study showed the demand for international flights in Southern California had increased 30% from 2010 to 2015 and forecast millions of dollars in economic benefits to the region. The project would have created temporary construction jobs in the development of the facility, as well as permanent jobs once it opened. These jobs were the primary reason for Councilman Andrews to favor the proposal.
The Jacobs report addressed the economic impacts as follows: “The potential annual economic contribution of a FIS Facility is approximately 350 jobs and $36.4 million of additional output. The potential additional economic expenditures from international travelers is estimated to range between $57 million to $104 million during the five-year establishment period following initiation of international service. The international business and tourist travel impacts are estimated to generate approximately 1,400 jobs and $185.6 million annually following the establishment period.”
Fifth District Councilmember Stacy Mungo, whose district is home to the airport and who claimed she was undecided on her vote until the very end (she did say publicly that she met with Mayor Garcia and Councilwoman Suzie Price late Monday, the day before the city council meeting), stated that the facility would cost approximately $10 million, according to airport staff, up to $3 million of which would come from passenger facility charges (PFC), with JetBlue paying the remaining balance. Before making a motion to receive and file the recommendation, Mungo argued that $3 million in PFCs would be better spent on existing terminal improvements, including the renovation of ticketing and baggage claim areas, especially considering the airport’s $110 million in outstanding debt.
In a statement following the vote, Mungo said the financial investment of the city outweighed the potential benefits. “The potential economic impacts to the region and, more importantly, to the airport itself do not justify the investment,” she said. That was contrary to city staff’s recommendation, including Airport Director Jess Romo, who supported moving forward with the project.
Members of the business community, aviation operators in particular, think this was a missed opportunity to help the city reach its full potential. Many businesspeople were puzzled by what they expected to be a common-sense decision to enhance Long Beach’s image as an international city.
“I think it’s a mistake. We have customs in the harbor. We have customs at Carnival Cruises. And we had the potential to have customs at the airport,” Kevin McAchren, president of Airserv at LGB, said. “It seems like there was a synergy between the facilities that are available on the oceanfront, and having one at the airport – it just made sense. Long Beach has called itself since the early 1960s ‘The International City.’”
McAchren explained that international flights would have been beneficial to trade, travel and tourism for the city. He said that with the ethnic diversity of Long Beach – where Hispanics and Latinos account for more than 40% of the city’s population – flights to Central and South America would have been well received and good for businesses in all sectors.
Imran Ahmed, general manager of Long Beach Marriott adjacent to the airport, said he cannot predict all the ramifications of the decision, but felt it will stunt the growth of the city.
“Businesswise, economically, it will hurt our businesses, especially in the 5th District,” Ahmed said. “But it is their decision, and we do respect it. I was hoping the outcome would be different so we could elevate the stature of the city with an international airport.”
Long Beach Area Chamber of Commerce President and CEO Randy Gordon was also disappointed in the council’s decision, according to a statement.
“Last night, the city council supported emotions and misinformation over facts and economics,” Gordon said. “The chamber has always been a staunch supporter of the noise ordinance and the maintaining of that ordinance at the Long Beach Airport. It does not matter where planes take off to or where the planes arrive from, the noise ordinance dictates the amount of flights. Period.”
“Once again we see politics getting in the way of progress,” said Business Journal Publisher George Economides. “Anyone who thinks politics wasn’t at play is naïve.” He said this was a “destinations” issue – which cities airlines choose to serve with their allocated slots – “not a noise or pollution issue as those against international flights smartly positioned it to be. It was clearly articulated by the Jacobs’ study, city staff, the city attorney’s office and the FAA that flights are determined by the city’s noise ordinance.”
The noise ordinance in question was established in 1995 and is one of the strictest of any airport in the United States. It dictates hours of operation and numbers of flights per day based on the amount of noise pollution produced by aircraft. Many public commenters who spoke out against the facility voiced concerns about the impacts on the quality of life for those living under flight paths.
Many cited additional noise, public health concerns due to what they claimed would be increased air pollution, and a concern that by adding a FIS the noise ordinance in its entirety could be subject to question and potentially removed completely.
With regards to noise pollution and an increased number of flights, LGB Director Romo and JetBlue went on record saying any international flights would not increase the total number of flights allowed at the airport but would rather replace a domestic flight within the allotted flight slots.
But this only raised other public concerns, such as having fewer domestic flights available to frequent travelers, to which Economides said, “That’s baloney. Sounds like an effort to help those seeking relection in 2018. JetBlue – no airline – would shift flights if those flights are financially successful and running at capacity. Approval would have allowed JetBlue to take lower-performing domestic destinations and try international destinations – all within the confines of the noise ordinance.”
“There are folks, which I understand, that are passionate about their communities and potential impacts the airport has on their qualities of life,” Romo said. “I respect that. I don’t blame them for taking the positions that they took.”
When asked if he thought the council’s decision would have a negative impact on the airport, Romo said he would not speculate as to what operators such as JetBlue will do as a result. However, he did say that he hopes JetBlue will continue to be a strong partner in Long Beach because they provide a great product and service.
Romo added that LGB is still number one in an online USA Today poll for airport beverages and concessions, which shows that with or without international flights, LGB is a great airport that is good for the community. With regards to the decision, Romo said staff worked hard and did its job well in presenting the Jacobs study and additional information to the councilmembers to make a well-informed decision.
“It is their job to be the policymakers. We will always respect and take direction based on what they decide to do,” Romo said. “That’s our job, to carry out that mission. We will always look for new opportunities. We have plenty of projects that we can focus on as we move ahead.”
“It’s important to remember,” Economides said, “that JetBlue came here in 2001 when no other airline wanted to touch Long Beach because of the city’s anti-airport reputation. They took a chance on us, thanks in a big way to former Mayor Beverly O’Neill. JetBlue has been a great corporate citizen and this is how our mayor and councilmembers treat them? Not our best day as a city.”
Several individuals with whom the Business Journal spoke believe elected officials are mistaken if they think another airline, like Southwest Airlines, would automatically pick up the 30-plus daily flights if JetBlue leaves. For example, they noted that Southwest already offers about 175 flights combined from LAX, John Wayne and Ontario.
Economides noted that in a city of nearly half a million residents, a small percentage of people objected. “I believe – and many, many people feel the same way – that if all residents had a vote, we would have international flights.”