Fearing loss of federal funds, L.A. reverses course, approves Van Nuys Airport lease

Faced with the possibility of losing hundreds of millions in federal funds, the Los Angeles City Council reversed course on Tuesday and awarded a helicopter company a lease at Van Nuys Airport for up to 25 years, despite protests from residents who live nearby.

Airport officials, the city’s lawyers and Mayor Karen Bass warned the city would risk losing funding from the Federal Aviation Administration if the lease were rejected.

“Failing to [approve the lease] would endanger hundreds of millions of federal dollars for Los Angeles and vital projects at all of our airports,” Bass said in a statement before the vote. “Our airports are entry points to our city for the entire world, and we have to run them like it.”

Bass had argued that the vote was especially urgent as the city prepares to host the World Cup in 2026 and the Olympic and Paralympic Games in 2028.

The council’s 11-2 vote followed a yearlong political fight that played out in courtrooms, at emotional hearings and behind closed doors in the council chamber. The decision represented a major defeat for Councilmember Imelda Padilla, who had waged a campaign to block the lease.

“I stood firm, voting with my conscience and with my constituents to ensure Van Nuys Airport respects and values the surrounding community,” said Padilla, whose district includes the airport, in a statement after the vote. Councilmember Hugo Soto-Martínez also voted against the lease.

Padilla criticized the bidding process, saying it “lacked transparency and fairness.” She repeatedly warned the lease would result in expanded jet traffic — without measures to address noise and environmental impacts.

In March, Padilla persuaded her colleagues to reject the lease proposal with Bonseph Helinet, LLC, which responded months later by suing the city.

Bonseph Helinet is a joint venture made up of Helinet Aviation Services, which operates a helicopter charter and maintenance facility at Van Nuys Airport; the Castagna 1998 Trust; and Bonseph Holdings Van Nuys, which has a majority stake in Bonseph Helinet.

For more than 35 years, Helinet Aviation Services has operated at Van Nuys Airport, providing flights for television media, fire departments and the entertainment industry. The company also serves as a medical helicopter charter company, transporting patients and organs to hospitals across the region.

The wrangling over the airport lease has highlighted the legal hurdles faced by communities that surround airports, whose flights are federally regulated. And it has served to amplify complaints from residents near the facility, which had 300,000 flights take off and land in 2021, and is the nation’s busiest general aviation airport — where private planes and charters operate, but not scheduled commercial flights.

Neighbors have complained about noxious jet fuels, saying their their children can no longer play outside because of unchecked flight growth and lack of measures to protect the community. Many worry the improved facilities will allow the company to shift its emphasis, by providing more lucrative charter jet service.

Suzanne Gutierrez, who lives in Lake Balboa and is co-founder of Fume Fighters, a community advocacy group, called the decision to approve the lease “a real slap in the face to the community.”

“The community is going to suffer. There is no mitigation for us. We are already suffering from the fumes,” she said.

Helinet plans to spend $25 million redeveloping the airport facility, demolishing two deteriorating hangars and building two new ones, along with new office space, shops and other improvements.

The company has said it will continue to focus on current operations and has no plans to increase jet traffic. It also points out that under the lease, the company is prohibited from operating with fixed base operations like a traditional jet charter service used by the rich and famous.

It emphasized that it will use the industrial portion of the airport as a flight path, not the residential one.

The Board of Airport Commissioners, a seven-member panel made up of mayoral appointees, recommended the 25-year lease in December 2022 after a bidding process. Community activists argued the process wasn’t truly competitive, since Bonseph Helinet was the only company that ultimately bid.

Padilla had warned the lease would lead to an expansion in airport activity, placing new burdens on her constituents. She persuaded her colleagues to reject the lease in March and secured the council’s support to draft a new zoning plan for the airport area — one that would look at new measures to address jet noise and air pollution.

Bonseph Helinet sued the city in May over its decision to reject the lease, saying the council had missed the legal deadline for taking up the airport commission’s decision.

In its lawsuit, the company accused Padilla of using the airport issue to win reelection two months earlier. The company also alleged the council unwittingly kept the telephone audio on during a closed-door meeting on the lease, allowing the public to hear city lawyers express concerns about rejecting the airport lease.

Around the same time, the Van Nuys Airport Assn., a business group, filed its own complaint with the Federal Aviation Administration, alleging the council’s disapproval of the lease ran afoul of the city’s obligations under federal law. The group said the zoning changes would be used to limit airport operations.

The FAA, after investigating the complaint, made a preliminary determination that the council had violated federal rules that require the city to make its airports publicly available “without unjust discrimination” against aeronautical activities. The agency advised the city to change course, giving the council until Oct. 24 to submit a “corrective action plan” on the matter.

One day before the deadline, the council met again behind closed doors. In a confidential memo, the city’s lawyers warned council members that, if they failed to take corrective action, the FAA could withhold critical grant funding from the city — not just at Van Nuys Airport, but also at LAX.

Los Angeles World Airports, which oversees the airports, “has been awarded over $622 million in grants between 2019 and 2025,” said the memo, a copy of which was reviewed by The Times.

Of that total, about half had been “put in jeopardy” by the lease dispute, the memo said.

The council resurrected the lease process, which was taken up again last month by the airport commission.

On Tuesday, the council voted 8-5 to settle the lawsuit with Bonseph Helinet, with Padilla, Soto-Martinez and Councilmembers Kevin de León, Monica Rodriguez and Bob Blumenfield voting no. Under that agreement, Bonseph Helinet agreed to drop its lawsuit and conduct outreach on its redevelopment plans.

Representatives of Bonseph Helinet declined to comment on the council’s decision.