Returning from its holiday break, the City Council Tuesday will reconsider a much-debated lease at Van Nuys Airport that proponents say would bring economic growth but nearby residents fear could cause further harm to their communities.
Bonseph Helinet LLC -- composed of Helinet Aviation Services, the Castagna 1998 Trust and Bonseph Holdings Van Nuys Inc. -- is seeking a five-year lease, possibly extending for up to 25 years, for 4.22 acres of land and 17,253 square feet of office and hangar space at VNY.
If City Council approves the lease, the group would seek entitlements for a $26 million redevelopment project at the site, including two new 30,000-square-foot hangars, 15,000 square feet of terminal/shop space, 72,000 square feet of renovated ramp areas, among other improvements.
This is the second time the matter has come before the council.
In March, the City Council rejected the lease after environmental concerns were raised by San Fernando Valley residents who live in proximity to the airport. Council members also cited concerns with the request for proposal -- or bidding -- process, also known as an RFP.
The council's action prompted a lawsuit by Bonseph Helinet, which accused the council of violating the City Charter by failing to act on the lease proposal within 30 days -- instead waiting more than 15 months after the lease had been approved by the city's Board of Airport Commissioners in 2022. The company also accused the city of overstepping its authority over Los Angeles World Airports, a proprietary department overseeing LAX and VNY.
Additionally, the Van Nuys Airport Association, an organization composed of tenants at VNY, filed a complaint with the Federal Aviation Administration, which alleged the city violated FAA regulations when it denied the lease, arguing that airports such as VNY that receive federal funds must agree to certain obligations or assurances.
Curt Castagna, a partner of Bonseph Helinet, serves as the president of the Van Nuys Airport Association, while Kathryn Purwin, CEO of Helinet Aviation Services, is also a member of that organization.
Castagna and Purwin could not be reached for comment. Brandon Young, attorney representing Bonseph Helinet, declined to comment citing the pending litigation.
If the FAA complaint is sustained, the agency could potentially withhold millions of dollars from LAWA. The city of Los Angeles can still challenge the complaint under judicial review, known as a Part 16 proceeding, according to a letter from FAA Director Mark McClardy.
According to documents made available under the California Public Records Act, the City Attorney's Office submitted a response to the FAA, which in part concurred that the City Council found LAWA's RFP as "insufficiently competitive" under the City Charter, but at the same time did not outright refute the complaint.
In an effort to settle the lawsuit and FAA complaint, the city Board of Airport Commissioners reconsidered the lease proposal in November and voted to approve it. The issue will now move to the City Council on Tuesday for the final say.
Some San Fernando Valley residents have opposed the lease, arguing negative environmental and health impacts. They allege LAWA has failed to mandate environmental mitigation efforts at VNY at the same level as LAX.
Helinet Aviation Services has stated the lease is intended to continue the work it has performed from the airport for more than three decades -- providing medical delivery services to Children's Hospital Los Angeles, UCLA, USC, Cedars-Sinai, UC San Diego and UC Riverside. Additionally, the company offers helicopter and aviation services related to charter, production and aircraft management in the L.A. region.
The company has previously stated that under the lease, it would not increase charter jet operations. Bonseph Helinet argued in its lawsuit against the city that the previous leaseholder of the helicopter-support facilities at VNY had "allowed the site to fall into disrepair," which led the city to begin the bidding process in 2021 in an effort to make the site "safe and modern."
While Helinet Aviation Services may reduce its reliance on carbon fuel by using electric-powered helicopters or reducing its fleet, under FAA regulations, airports cannot restrict aeronautical operations at their sites. If charter jets or other aircraft seek to use Bonseph Helinet's proposed hangers, the company must accommodate them.
The Van Nuys Airport Citizens Advisory Council -- a separate body whose members are appointed by elected officials to oversee VNY -- made a recommendation to reject the lease, citing concerns that LAWA's original bidding process was "noncompetitive," meaning other bidders did not have an equal opportunity to secure the contract.
Concerns about LAWA's RFP stem from complaints made by Air Center Aviation and another bidder, according to public records.
Since 1972, Air Center Aviation has held the master lease for the property at VNY, adding Helinet Aviation Services as a subtenant in 2013 under the direction of LAWA.
Both Air Center Aviation and Helinet Aviation Services are on a month-to-month lease for the site located at 16231 Waterman Drive.
Documents dating back to 2003 showed that LAWA officials and Air Center Aviation attempted to work out a 30-year lease for the property, but could not come to an agreement.
In 2018, LAWA sought a new tenant for the property, citing a 50-year limit to its leases. There are examples of other companies with leases of more than 50 years, such as Aerolease Association and Clay Lacy Aviation, according to city records.
Representatives for Air Center Aviation protested the RFP, which opened in July 2021, alleging LAWA and Bonseph Helinet "conspired" to eliminate them as the master tenant.
The company also alleged LAWA imposed restrictive language in the RFP to require current tenants be accommodated, saying the RFP was extended with the restrictive language removed after the fourth amendment in September 2022. But two months later, BOAC voted to recommend a five-year lease to Bonseph Helinet -- and it was that lease the council rejected in March.
Brian Cochran, CEO for Pegasus, which develops airport terminals and operates air cargo warehouses, shared similar complaints with LAWA, claiming Bonseph Helinet refused to cooperate, and in turn, limited potential bidders from submitting a proposal.
Representatives for LAWA and Bonseph Helinet declined to comment on the issues, and the two entities maintained the RFP was in compliance with city regulations.
"On October 21, 2021, LAWA received a proposal from Bonseph Helinet," according to a BOAC report from Nov. 7. "The proposal was reviewed by a three-member evaluation panel which found that Bonseph Helinet, LCC is responsive and responsible, that entering into this lease is in the city's best interest."
"The City Attorney determined the RFP process used complied with the requirements of Administrative Code Section 10.17 and all other applicable regulations and law, and is compatible with the city's interests," the report concluded.