Ontario airport authority leasing 200 acres for industrial

Would-be developers make $10M non-refundable deposit as environmentalists raise concerns about rare owls

Los Angeles /
Dec.December 27, 2021 08:32 AM
USAA Real Estate CEO Len O’Donnell, McDonald Property Group CEO Bruce McDonald and the Ontario International Airport in California (USAA, McDonald Property Group, Getty)
USAA Real Estate CEO Len O’Donnell, McDonald Property Group CEO Bruce McDonald and the Ontario International Airport in California (USAA, McDonald Property Group, Getty)

A joint venture is set to develop nearly 200 acres of land at empty fields next to Ontario International Airport, but the deal is not a hoot for everyone.

The Inland Valley Daily Bulletin reported the joint powers Ontario International Airport Authority approved a lease of the land to a joint venture of USAA Real Estate and McDonald Property Group, known as CanAm Ontario LLC. The 55-year lease will see the development of industrial buildings on the empty fields.

CanAm Ontario paid a $10 million nonrefundable deposit for the development rights of the land near the airport. The facility is among the biggest cargo hubs in the U.S. and a secondary facility for passenger traffic in the region, handling about 5 million fliers a year before the pandemic, putting it at about one-fifth the load of Los Angeles International Airport.

The deal comes amid a red-hot market for industrial space in the Inland Empire, which includes San Bernardino and Riverside Counties and counts Ontario as a key logistics hub in part because of its publicly owned airport.

At the end of the last quarter, the vacancy rate in the Inland Empire was 1 percent, down from 1.6 percent at the end of the second quarter, according to Cushman & Wakefield data.

The lease deal is set to generate $275 million for the airport there in the first 10 years of the lease and up to $625 million overall, according to the Daily Bulletin.

The airport would use the revenue from the lease towards improvements and keeping airline costs down.

The development of industrial real estate on the empty fields, however, could endanger burrowing owls who often nest on the site. The rare owls are a “species of special concern” in the eyes of state environmental agencies.

According to the Daily Bulletin, the airport authority has promised to work with CanAm Ontario to obtain environmental approvals from the California Department of Fish and Wildlife and U.S. Fish and Wildlife.

A representative of one environmental group has suggested what she called a solution: the setting aside of nearly 90 acres too close to the airport’s runway approach for a burrowing owl preserve.

“Because this is such a critical habitat, they need to designate some acres of that land for the burrowing owls,” Catherine Portman, president of the Burrowing Owl Preservation Society, told the Daily Bulletin. “But if citizens don’t pay attention, they won’t.”

It’s not clear if the airport authority and developer will agree to the plan.

[The Daily Bulletin] — Holden Walter-Warner





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