Fresno Fined for Illegal Airport Land Sell-off

Tuesday, October 30, 2007
Fresno to pay $5.8m in airport land dispute
Settlement with FAA creates fund to use for improvements.
By Brad Branan
The Fresno (CA) Bee

The city of Fresno has agreed to pay $5.8 million plus interest to settle a dispute over a controversial sale of airport property to Gap Inc. Under the agreement with the Federal Aviation Administration, quietly reached in July, the city will make payments over 10 years into a fund it can use for improvements at Fresno Yosemite International Airport. The City Council will be asked today to approve the first payment of about $800,000. The City Council vote to approve the settlement came in a closed session, a decision that wasn’t made public until today’s meeting agenda was posted.

Today’s vote on the proposed payment is scheduled under the council’s consent agenda, meaning it will be approved without discussion unless a council member specifies otherwise.

In a deal started in 1997, the city sold about 200 acres to Gap for $2. City officials pointed to the economic benefits of the San Francisco-based retailer bringing a distribution center to the area.

But following an FAA audit, federal authorities contended that the city had a duty to sell the property at market value and reinvest the money into the airport.

The settlement agreement accomplishes that purpose, city and federal officials said.

“It’s an appropriate resolution because the FAA’s goal is for airport revenue to go to airport projects,” said Ian Gregor, an agency spokesman based in Los Angeles.

Mayor Alan Autry previously criticized the land sale, made under his predecessor, Jim Patterson.

But Autry said Monday that he sees little choice but to support the settlement with the FAA. The city risks losing millions of dollars in future FAA grants if it continues to fight the agency, he said.

City Council Member Jerry Duncan said the city isn’t likely to save any money by holding out, noting that the FAA originally wanted almost twice as much to settle.

But Council Member Larry Westerlund said he voted against the settlement agreement in July. He said he will likely vote against the proposed payment today.

“We have a stronger position and could have negotiated a better settlement,” he said.

The City Council voted for settlement in a closed session July 24, records show and council members confirm. But officials didn’t announce the settlement after the closed session.

The Brown Act requires public officials to announce “any action” taken in closed session, said Peter Scheer, executive director of the California First Amendment Coalition.

However, officials are required to announce legal actions only if their decisions bring the matter to an end, he said.

City Attorney Jim Sanchez didn’t return phone messages Monday.

In a letter he sent to the FAA last month, Sanchez said the City Council considered the agency’s settlement offer and “voted to accept it” in the July closed-door meeting. But the council had to approve payment “before final city action can be authorized,” Sanchez added in the letter.