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California Sues To Stop Big Cargo Expansion At San Bernardino Airport

The state of California is asking a federal appeals court to block a huge air cargo facility at San Bernardino International Airport, saying the Federal Aviation Administration and the airport authority short-circuited the air quality review to speed the proje

Benzinga · 03/03/2020 14:08

The state of California is asking a federal appeals court to block a huge air cargo facility at San Bernardino International Airport, saying the Federal Aviation Administration and the airport authority short-circuited the air quality review to speed the project's approval.

Developer Hillwood Enterprises L.P. began grading the 100-acre site soon after the FAA's final approval for the plan and aims to complete work by the end of the year. The suit calls on the 9th U.S. Circuit Court of Appeals to halt construction until the FAA completes a comprehensive environmental impact statement that fully accounts for harm to local communities from diesel truck and jet emissions.

Airport officials describe the $200 million Eastgate Air Cargo Logistics Center as an air hub with parking positions for 14 all-cargo aircraft, a 658,500-square-foot package-sorting building and two 25,000-square-foot ground support buildings. The size and type of operation, as well as its location, have led to public speculation that online shopping giant Amazon.com, Inc. (NASDAQ: AMZN) will be the tenant, especially since Hillwood has built 17 facilities for Amazon in eight states and Amazon operates two distribution centers on Hillwood property adjacent to the airport.

"We have a responsibility to ensure that the rights of pollution-burdened communities are respected," Attorney General Xavier Becerra said in a Feb. 21 statement. "The FAA, the San Bernardino International Airport Authority, and the developer of this proposed project have ignored months of warnings of the significant health risks to residents of this area. We filed this lawsuit because ‘business as usual' — the kind that hurts low income, disadvantaged communities — is no longer an option."

The airport is located on the former Norton Air Force Base 60 miles east of Los Angeles in the warehouse-dense Inland Empire, where thousands of diesel-powered trucks shuttle goods to and from the ports of Los Angeles and Long Beach. Trucks and freight trains are also loaded for onward distribution to regional and national destinations.The area has become a mecca for logistics companies and especially online retailers in the past decade because it offers cheap land within striking distance of the port complex, where imports from Asia pour in.

There are 300 million square feet of warehouse space — equivalent to 5,100 football fields — in San Bernardino, and half of it has been built in the past decade, according to the Southern California Association of Governments and real estate experts.

In fact, Dallas-based Hillwood is responsible for much of that growth, which includes a smaller version of its landmark, master-planned Alliance business park anchored by a 9,600-acre multimodal logistics hub in Fort Worth, Texas. (In September, Amazon Air opened a regional air hub at Fort Worth Alliance Airport.) AllianceCalifornia is a 2,000-acre trade and logistics center adjacent to San Bernardino Airport, with distribution centers for name-brand retailers such as Pep Boys and PepsiCo, a BNSF intermodal rail terminal running through it, and close proximity to major motor carriers.

Pollution zone

Public health advocates say particulate matter and harmful gases from diesel emissions have contributed to high rates of asthma, cancer and premature death. San Bernardino is the worst county in the nation for ozone pollution and ranks sixth for soot, according to the most recent State of the Air report by the American Lung Association.

The environmental assessment done by the FAA states that once built, operations at the airport terminal would release one ton of smog into the local air every day from 500 truck trips and other activity. The site is within a mile of several schools, critics note. 

But the FAA determined in its Dec. 23 decision that there was no potential for significant impact from the privately financed project, even though an environmental report by the airport authority found that impacts would be significant and unavoidable.

Under the National Environmental Policy Act, agencies can conduct various levels of review to assess the potential side effects of industrial projects.

The suit alleges the FAA arbitrarily chose a minimal option even after California last November urged the FAA and the airport to perform a complete analysis, correct their air emissions modeling, and reconcile the impacts with state and local requirements to control air pollution.

"If there's potential for significant impact, they need to do a more rigorous environmental impact statement," said Adrian Martinez, a staff attorney for Earthjustice, which filed a separate suit against the airport project on behalf of environmental and labor groups in late January. "The goal is to have a proper environmental analysis that will help identify what needs to happen to protect the community from this project."

The San Bernardino Airport Communities Coalition, of which Earthjustice is a part, is pushing for a legally enforceable rider to the lease, called a "community benefits agreement," that would include guarantees on jobs, wages and pollution, such as requiring local hiring and the use of electric trucks. Residents complain that the rise of distribution centers in their area has occurred without regard for environmental or quality-of-life issues, in part because local governments are too enamored with the jobs and property taxes that they bring. They worry about another logistics center that offers low-paying jobs with limited benefits, although Amazon's starting wage of $15 per hour is better than that of many facilities in the area.

On Cyber Monday in early December, organizers held a large rally at an Amazon fulfillment center in San Bernardino, halting the flow of trucks to protest the cargo project and poor conditions for Amazon workers.

Opponents filled public meetings and protested at Amazon and Hillwood facilities in the past year. Many were upset about the lack of transparency, especially when the airport authority ratified the lease at a  Dec. 30 meeting, on short notice, during the holidays. The vote took place two days before a law went into effect requiring local agencies to publicly report details of any new distribution centers being built in the state, including the amount of tax subsidies granted to a new project. The bill also prohibits localities from signing nondisclosure agreements with companies building the facilities.

Becerra said at an event to publicize the lawsuit that the goal is not to stop the project, but to make sure the project takes the community's well-being into account. 

"We've spoken extensively with many of those groups throughout the process. As a commercial airport, we are regulated by the FAA and follow their procedures," Michael Burrow, executive director of the San Bernardino airport authority, told FreightWaves. "We are reviewing these filings and since it's a legal matter we can't comment further."

Hillwood representatives didn't respond to multiple inquiries about the project.

If negotiations result in an agreement that holds the operator of the cargo park accountable for meeting sustainability standards, it's possible opponents could drop demands for a more extensive environmental review, Martinez suggested.

The legal challenge to the Eastgate project resembles environmental opposition to expansion of the China Shipping terminal at the Port of Los Angeles early this century. The lawsuit by the National Resources Defense Council essentially blocked all new marine terminals or upgrades at the ports of Los Angeles and Long Beach for about nine years, until the ports developed detailed plans to reduce pollution and China Shipping agreed to many mitigation measures.

"We're starting to see more communities push back against these freight projects because of the concern over health and other impacts," Martinez said.

Economic Promise

Burrows insists that Hillwood has not yet found a tenant for the air cargo hub and that a number of domestic or international companies could take advantage of it, but an industry source with close knowledge of the project said "it's highly unlikely it would be done for anybody but" Amazon.

San Bernardino would represent the second airport Amazon has built from scratch, after Fort Worth. Amazon Air operates more than 45 aircraft at more than 20 U.S. air gateways. Its primary air hub at  Cincinnati/Northern Kentucky International Airport will open in 2021.

Martinez said the lease agreement even has a provision that says if someone tries to do a public records request asking about the future tenant, the developer could try to block that in court. "It's a level of secrecy I haven't seen before."

But it is the type of secrecy that is common with Amazon site selection plans, such as the nationwide search for a second headquarters campus that ended up in Alexandria, Virginia.

According to project documents, the new cargo extension would bring in $5 million in direct ground rent for the airport plus other fees and employ about 3,900 people at full operation, with a temporary increase to about 6,000 people during the peak holiday seasons from mid-November through December.

The facility, which will have 41 acres of aircraft pavement, is designed to handle up to 26 takeoffs and landings each per day.

The airport chief said plans started to come together three years ago after the airport partnered with UPS to rehabilitate a 56,000-square-foot midfield hanger that became a local point in UPS's network in the fall of 2017. In 2018, Hillwood fixed up another old building for FedEx Express.

Both integrated logistics providers have larger air terminals (the Western hub for UPS) at the nearby Ontario International Airport.

Image by Gerhard Gellinger from Pixabay