Mayor’s Statement Regarding Option to Purchase B-6 Property

 Over the course of the last several weeks, there has been much discussion and speculation about whether the City would exercise its option to purchase some or all of the B-6 Property from the Trustee, who holds this 80-acre parcel under a series of Title Transfer Agreements between the City and the Airport Authority.  The City has until July 31 to decide whether to purchase any portion of the B-6 Property. 

After careful review of the financial, legal, environmental and economic development issues involved, the City Council has declined to exercise the option.  We will not be purchasing any of the B-6 Property.  We have tonight informed the Airport Authority of the City Council’s decision.  We believe that the Title Transfer Agreements and the City’s statutory powers amply protect the interests of Burbank’s residents and businesses.  As a result, there is no need to spend potentially millions of dollars to purchase some or all of the B-6 Property. 

Last November, the City and the Airport Authority entered into several agreements relating to the B-6 Property.  Those agreements were designed to protect the City’s rights to decide what would be built on this property.  Those agreements set a May 24, 2000 deadline for the City and the Authority to reach a final agreement allowing the property to be used for a new airport terminal.  We believed then, and continue to believe today, that those agreements provide the City with the necessary legal protections to ensure that no new terminal or airport expansion can ever go forward without the City Council’s approval. 

The agreements divided the B-6 Property into two parcels.  The Airport Authority received about one-third of the property that is adjacent to the existing runways.  That property can be kept vacant for safety purposes but cannot be used for airport expansion without the City’s approval.  A Trustee held the remaining two-thirds of the 130-acre parcel.  That parcel has been called the Trust Property.  The agreements provide a complicated process for sale of the Trust Property in the event that the Authority and the City could not reach an agreement regarding a terminal by the May deadline.  One part of the agreements allow the City until July 31, 2000 to exercise an option to purchase some or all of the Trust Property. 

One of the most important parts of the agreements was a restriction on how the B-6 Property could be used.  The agreements gave the City a deed restriction – a property right – that absolutely prohibits the use of any of the B-6 Property for airport expansion without the City Council’s express approval.  Those restrictions apply equally to the property owned by the Authority and the Trust Property.  The restrictions are permanent and legally binding on the Authority or any other owner or user of the property.  Only the City Council can change the deed restrictions. 

Now that the City has decided not to exercise its option to purchase the property, the Airport Authority is required to sell the 80-plus acres of the Trust Property.  The Authority must sell the Trust Property at a price that it determines to be its fair market value.  The purpose is to return the property to productive use on the City’s tax rolls.  The deed restrictions prohibit the purchaser from using the property for airport purposes. 

We remain hopeful that the City and the Authority ultimately can reach an agreement on a new terminal before the property is sold. However, there is no guarantee that will happen.  Therefore, the City and the Authority have agreed that the City will cooperate in the marketing and sale of the Trust Property, and that the City will allow the property to be developed to its highest and best use, consistent with the City’s zoning ordinances and other land use laws.  The City stands ready to fulfill its obligations in the sale of the Trust Property.