Grandave Studios could involve two large warehouses

In the latest chapter involving Grandave Studios and its quest to find a home at the Banning Municipal Airport, has entered a new phase, this one involving an exclusive negotiation with a large logistics developer that could include construction of two warehouse-type logistics centers of 1 million square-feet each.

Despite sentimental pleas from residents attempting to encourage the city to reconsider its missive to close down the airport, the council voted unanimously to authorize City Manager Doug Schulze to work on an exclusive negotiation agreement (ENA) between First Industrial Realty Trust of El Segundo and San Diego-based Grandave Studios (pronounced “grand-ah-vay”).

The latest agreement calls for 202 acres of industrial warehouse and distribution development incorporating multiple buildings, including the two giant warehouses and dedication of roughly 30 acres for a movie studio.

The new agreement supersedes the city’s exclusive negotiation agreement with Grandave that was initiated in October 2020, which was set to expire at the end of June but was terminated as the city entered into the latest ENA.

The developer will eventually purchase the airport property for $150 million, which is higher than the city’s appraised value of $65 million, and will put up $100,000 for the city to draw from for expenses related to working on the ENA.

The city had been approached by a few entities pursuing opportunities at the airport over the past several months, but the city could not enter into discussions with them due to their exclusive agreement with Grandave.

The project has the blessing of CalFire, which claims that if the airport closed, it would not hinder its ability to handle natural disasters in the region.

Councilman David Happe explained that he was not thrilled about the city having to subsidize a dwindling civil aviation center that costs taxpayers roughly $150,000 to operate each year.

“If you want to consider the airport an asset, I would consider trading it for $150 million. That’s an asset,” he said, noting that the city is dealing with a $1.2 million deficit. “I support this project because it transforms options for future councils.”

During a public comment period, longtime airport advocate Harry Sullivan expressed doubt to the council that resolutions and council engagement to close down the airport since 2017 despite Congressional intervention, along with Grandave’s latest efforts, would be any more successful.

Resident Cindy Barrington noted that, since the airport is owned by the taxpayers, residents should have had more opportunity to have input.

“Leasing it is one thing, but selling would be a big mistake,” she said.

City Manager Doug Schulze, participating virtually from Las Vegas where he and other city representatives are participating in a convention, explained that the city understands that closing an airport will not be a simple task. The CEQA process will have to be completed, but he felt encouraged by discussions with the FAA that few obstacles will remain if Banning’s latest ENA could be successful.

Councilman Alberto Sanchez motioned to authorize the city, Grandave and First Industrial Realty Trust to enter into an ENA, seconded by Mayor Pro Tem Colleen Wallace.

When Grandave Studios announced its initial plans to open a movie studio at the airport in February 2021, it anticipated construction of 16 sound stages encompassing nearly 300,000 square feet, a water tank for filming underwater scenes, and entire cityscapes to produce more than a dozen films a year, while employing nearly 8,000 people in the city of Banning.