RENTS COULD TAKE OFF AT VAN NUYS AIRPORT.

Byline: Alexa Haussler Staff Writer

VAN NUYS - Los Angeles officials want to raise rents for businesses at the Van Nuys Airport by more than 70 percent a year to make up for $4 million in losses on its operation, the Daily News has learned.

Administrators with Los Angeles World Airports say they need to cover the airport's costs by hiking rents from $14,500 per acre per year to $25,000.

The plan, to be discussed at a closed-door meeting today, has left tenants and neighbors questioning whether airport number-crunchers are using fuzzy math. They accuse the city of trying to drive small businesses out of the airport with the rent hike.

``Believe me, (the airport) is not a losing venture,'' said Mark Sullivan, owner of Sky Trails Aviation, a business he has operated at the airport for 15 years. ``To me, it's highly unlikely that the Van Nuys Airport is losing money on its own.''

Jim Dunn, president of the Van Nuys Airport Association and chief executive of the Airtel Plaza Hotel at the airport, confirmed that representatives of the association and city will hold a private negotiating meeting today. He declined to comment further.

``It's under negotiation and discussion, and it's a little too early to comment,'' he said.

Administrators for Los Angeles World Airports, which is the city's airports department, earlier this month told a commission studying the possible breakup of the city that the Van Nuys Airport's $7.75 million in revenues isn't enough to cover its expenses.

Karen Sisson, chief financial officer for the airports department, said the primary source of revenue for Van Nuys Airport is rent from aviation- related businesses, along with a small amount of income from concessions.

``The obvious answer is the revenues don't cover the expenses,'' she said.

Airport neighbors and Valley business leaders say the city's number crunchers use distorted estimates in claiming the airport is losing money rather than pumping it into the city's economy.

``There are a number of us over the years who have always felt that it is very skewed, and it's not realistic,'' said Don Schultz, president of the Van Nuys Homeowners Association and a member of the Van Nuys Airport Citizens Advisory Council.

As proof, they point to the department's own Web site, which says that a 1998 economic study found that the airport contributes nearly $1.2 billion annually to the Southern California economy and creates 10,027 jobs.

Still, airport officials are using the reported losses to justify a proposal to increase rents.

``Essentially what it would do is probably drive the little guys off the airport, and the only people that would be left are (those with) corporate jets,'' Sullivan said.

At Santa Monica Airport, which also caters to private and commercial airplanes, the rate varies from $15,681 to $43,560 per acre per year. The favorite locations cost the most.

The future of Van Nuys Airport, which has been the constant target of noise complaints from neighbors for years, is one of the major issues for those considering the secession of the San Fernando Valley from the city of Los Angeles.

Officials from the Local Area Formation Commission, the agency studying the breakup, have said they are not sure whether consultants will recommend a takeover of the airport by a new city. Another stumbling point could be the federal government, which licenses the airport to the city of Los Angeles.

Valley Voters Organized Toward Empowerment, the group that pushed for the secession study, has not taken a stand on the airport issue, said Richard Close, president of the Sherman Oaks Homeowners Association and chairman of Valley VOTE.

Close said he personally thinks a Valley city should operate Van Nuys Airport to make sure that the area reaps the economic benefits and that neighbors' feelings are considered by airport administrators.

``I'm suspicious as to the motive of the city (officials) when they say that they are losing this money,'' Close said. ``I think Los Angeles city may try to keep the Van Nuys Airport so they can dump the noisy planes into the San Fernando Valley and they can make sure the economic development occurs around LAX, rather than around the Van Nuys Airport.''

More than 100 businesses are located at Van Nuys Airport, including six major fixed-base operators and several companies that provide aviation and flight-related services, such as aircraft storage and parking, aviation fuel, aircraft sales, flight instruction, aircraft charter and aircraft maintenance.

Sullivan said he believes the city's bookkeepers have charged Van Nuys Airports for costs at some of the city's other airports. For example, he suspects that all costs of the Van Nuys Airport Flyaway program are attributed to Van Nuys Airport, although it is a service that shuttles passengers to and from Los Angeles International Airport.

Sisson, the airport department CFO, denied his claim, saying that LAX revenues from landing fees help cover costs at Van Nuys.

Sullivan remains skeptical.

``The airport (administration) leaves us completely out of the loop about its budget,'' Sullivan said. ``We don't know where the expenses are going or where they are derived from.''

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Photo: Mark Sullivan is among Van Nuys Airport business owners upset by a Los Angeles city proposal to raise their land rent from $14,500 per acre per year to $25,000.

John Lazar/Staff Photographer