The Banning, California, City Council is scheduled to consider an agreement Tuesday that could advance plans to close Banning Municipal Airport and redevelop the property for industrial use. City staff are recommending approval of a nonbinding agreement with Industrial VI Enterprises LLC, an affiliate of developer Hillwood.
Under the proposal, Hillwood would develop six industrial buildings of approximately 3.2 million square feet on 175.7 acres of city-owned airport land. The development would be structured around 55-year ground leases, allowing the city to retain underlying property ownership. City staff estimates say the project could generate $332 million in nominal recurring revenue for the city over the lease period, before any additional one-time fees or potential property sales.
Long-Running Closure Effort
Banning first adopted a goal of closing the airport in 2017 and reaffirmed that position in 2023. The city’s efforts received a significant boost through a provision in the 2024 FAA legislation establishing a pathway to release the city from federal obligations requiring the airport to remain open. The provision requires Banning to repay certain federal grant-related funds and transfer salvageable aviation equipment to other airports before receiving that release.
“Approval would establish a non-binding negotiating framework for further review,” city staff wrote in their report. “It would not authorize airport closure, entitlements, construction, or execution of Definitive Agreements.”
Airport Advocates Raise Concerns
The Southern California Aviation United Working Group (SCAUWG) has urged city officials to reconsider the proposal, citing financial and environmental concerns. In an Oct. 24 letter, the organization questioned the potential cost of repaying the FAA for 20 acres acquired through a 1983 federal grant. It also raised concerns about a proposed $6 million public benefit fee that would be offset by airport closure expenses, including required federal repayments.
“This structure might represent a net-zero mechanism,” wrote Ron Berinstein, director of SCAUWG, in the letter addressed to city officials. “This is because the initial developer fee could be entirely exhausted by clearing federal regulatory debt incurred by liquidating the runway, rather than injecting new, flexible capital into the city’s current operating budget.”
The group also questioned long-term financial implications of the proposed leases, along with the potential effects of the industrial development on surrounding communities. It called for an independent review of the project’s financial, public safety and environmental implications before the council proceeds.
Further Approvals Required
According to the city’s staff report, the proposed agreement would only establish a framework for continued negotiations and would not yet authorize closure. The development would still require environmental review, additional council approvals and compliance with federal airport closure requirements. City officials say the project could take another 18 to 24 months to reach final council consideration.
The proposed redevelopment would replace a general aviation airport that has operated for decades in the San Gorgonio Pass. The city maintains that industrial development could provide a more sustainable source of revenue, while airport advocates continue pushing to preserve the facility. Tuesday’s council meeting is scheduled to begin at 5 p.m. Pacific time.
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