On February 26, representatives of the Cities of Burbank, Glendale and Pasadena, the Airport

Authority and Congressmen Schiff, Berman, Waxman and Sherman traveled to Washington,

D.C. to meet with new FAA Administrator Marion Blakey. The purpose of the meeting was to

seek a statement from the FAA that:

� Endorsed the importance of a local stakeholder process designed to reach consensus and resolution on the future of the Airport within a defined time.

� Appointed a senior FAA official to participate actively in local stakeholder discussions including attending a local community outreach meeting at the appropriate time during these discussions.

� Confirmed that the Airport Authority could retain the B-6 Property while the stakeholders work to reach consensus and resolution.

FAA Administrator Blakey was less-than-cooperative. While she affirmed that the decision

about a new terminal was a local one, she declined to provide any FAA assistance in reaching a

local consensus. She indicated that she expected the Airport Authority to develop a plan for

reuse of the B-6 Property and reimbursement of the federal investment in that property. She

also invited the participants to present a specific plan for how they intend to reach resolution of

the airport controversy. She requested such a plan � on sale of the B-6 Property or a process

for reaching resolution � within 60 days. She also stated that the FAA would not allow the

construction of a new terminal to be explicitly linked to achievement of a curfew.

The hurdles that Blakey imposed � both in substance and timing � raise doubts whether it is

realistic to reach an agreement on a new terminal at this time.

Staff and the City's special counsel have considered at length various options for the next steps.

There appear to be three principal options. The first is to support an immediate decision by the

Airport Authority to sell the B-6 Property, thereby permanently foreclosing a new terminal at

that location. The second is to make a short but intense last-ditch effort to reach a final

agreement on a new terminal before expiration of the 60-days that Blakey suggested is the

deadline for a reuse plan for the B-6 Property. Neither of these options appears realistic � in

part because Measure B would make it impossible to reach an agreement within 60 days and

because a sale and redevelopment of the B-6 Property would only assure that the Authority

would have an incentive to find other ways to relocate the terminal on terms that would be

unattractive to the City.

The third, and preferable approach is one that best optimizes the interests of all the

stakeholders. The approach have the following components: (1) The City not to object if the

Authority decides to retain the B-6 Property for the time being, pending the completion of the

Part 161 process. (2) The Authority could, of course, choose to sell the property. (3) If the

Authority chooses to retain some or all of the property, the Authority would be allowed to use

the B-6 Property for temporary revenue-generating uses like the Desmond�s lot and the

proposed storage lot for Sunrise Ford � but not for airport expansion or any permanent uses.

(4) The City would have to approve the types of temporary uses that would be allowed. (5) All

efforts to reach an agreement on a new terminal would be suspended until the Part 161 process

is completed and the FAA decision on a curfew has been made. (6) At that time, the

stakeholders could try to reach an agreement. If successful in that effort, an agreement would

be submitted for voter approval.

Staff believes that this approach has several advantages:

� It continues the Authority's existing flexibility to sell the B-6 but also allows it the option to generate revenue sufficient to satisfy the FAA's legal concerns about federal funding and returning grant dollars.

� The new terminal would not formally be tied to the curfew but, because negotiations over a new terminal would be suspended until a curfew has been secured, the City would have a decision on a curfew before it would consider a new terminal. This satisfies the City's concerns without formally tying the terminal and curfew.

� The Authority would still have an incentive to succeed in the Part 161 study since the City would be under no obligation to consider a new terminal unless that process is successful.

� For the most part, the City would not have to spend time, effort or money on Airport issues for the next 12-18 months (or more) while the Authority completes the Part 161 Study. This has obvious fiscal advantages for the City.

� At the completion of the Part 161 process, the City could still decide that a terminal is not appropriate or it could negotiate a deal for a terminal � entirely at the City's discretion. If a tentative agreement is reached at that time, the voters would be the ultimate decisionmaker.

� If a decision is made to sell all or part of the B-6 Property, that decision would be made by the Authority, not forced by the City.

We believe that this approach would satisfy the FAA concerns, give the City the flexibility to

encourage successful completion of the Part 161 study, and allow the stakeholders to take a

break in the ongoing dispute for the time being until the FAA has made a decision on the

application for a curfew.

We should note that thus far these matters have been discussed in Closed Session due to the

clear threats of litigation from several parties and in an attempt to protect the legal position that

the City has attained in past litigation battles. However, it was the expressed interest of the

Council that significant discussion of these matters occur in open session with an opportunity

for public awareness and input.

It is recommended that the Council discuss the various options before it and determine how to

proceed with reference to the Airport and the FAA directives.

Cc: Mary Alvord, Interim City Manager

Sue Georgino, Community Development Director

Peter Kirsch, Attorney at Law

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