Legal Dispute Over SF Air Cargo Terminal Brewing
Developer suing San Francisco International Airport for rejecting proposal.
SAN FRANCISCO - 07/08/04 - The proposed developer of a controversial $200 million cargo facility at San Francisco International Airport is suing SFO to save its project, reports Ethan Fletcher in the San Francisco Examiner.
Airis Holdings, LLC, a Texas-based private developer, filed the lawsuit Friday [July 2] alleging that the airport and SFO Director John Martin illegally reneged on a deal to renovate the airport's aging West Field cargo facility.
The lawsuit, spurred in part by SFO's stated desire to build the new facility on its own, seeks to halt any other alternatives for the project currently sought by SFO and recoup at least $4 million in costs Airis claims to have spent in pursuing and planning the facility.
Airis' plan to build a 633,000-square-foot cargo and office building and operate the facility for the next 30 years was approved by the Airport Commission in October, but rejected by the San Francisco Board of Supervisors in December. Airis' lawsuit argues that the rejection was merely the first step in a negotiating process and that the developer's exclusive negotiating agreement awarded by the Airport Commission precludes any other bidding alternatives, the paper said.
"We have tried at every opportunity to work with SFO executive staff to come to a mutually beneficial solution," Ronald Factor, president of Airis Holdings said in a press release. "Our attempts have been shunned by the airport staff, and we feel that they have left us no choice but to protect our rights through legal recourse. We are, nevertheless, committed to this project and bringing a world-class air cargo facility to SFO."
SFO spokesman Mike McCarron countered that any negotiating deal is not binding, merely pending, until signed off by the Board of Supervisors. The airport is currently looking into building the facility on its own, therefore keeping a majority of the cargo revenue, something recommended by San Francisco Budget Analyst Harvey Rose in a report to the supervisors' Finance Committee last December.
SFO originally decided to contract out the project so that the airport would not have to front the money for the cargo facility while already burdened with billions of dollars of debt. The airport has suffered financially due to a poor post-Sept. 11 economy.
SFO spokesman Mike McCarron'told the paper'that although nothing has yet been decided, the airport is exploring the possibility of doing the project "in-house."
"I think the economy is changing and we could probably make it work for us now," he said, adding that he would not comment on pending litigation.
The Airport Commission passed a resolution on June 15 essentially allowing SFO to pursue developing the cargo facility on its own.
Airis claims that its proposal would bring in $200 million in direct rental revenue as well as $100 million in indirect revenue to the airport while the developer would assume the facility's cost and risk over the span of the 30-year lease.
Airis also points to the 3,000 construction jobs and 1,700 permanent airport union jobs, as well as thousands of indirect jobs, which would be created, the paper said.
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