A prime tenant at Gary/Chicago International Airport is suing the airport authority and its private operator, alleging they have "unilaterally" quadrupled its rent in a move that could permanently snuff out private development there.
The Gary Jet Center's lawsuit was filed Thursday in U.S. District Court in Hammond, seeking a permanent injunction against airport authority attempts to levy a 1.5 percent fee on tenants' gross revenues at the airport.
"It's just harassment," said Gary Jet Center owner Wil Davis. "It's just unconscionable to think you can go and change someone's lease because you need more money."
When contacted, Gary Airport Director Dan Vicari said he could not comment on the pending litigation.
The Gary Jet Center contends the airport authority and airport operator AvPorts cannot violate its 2007 lease, which has it paying rent for its hangars at a rate of 50 cents per square foot and an additional fee of 10 percent of all revenues collected for the airport. That lease does not expire until 2046.
The Gary Jet Center has three hangars and a passenger lounge at the airport. It is one of two fixed-base operators there, providing services such as fueling, aircraft repair and charters.
AvPorts signed a 10-year agreement to manage the airport in January 2014. Its parent company, Aviation Facilities Company Inc., signed a 40-year agreement to become the airport's exclusive developer.
Just before AvPorts took over airport operations, the Gary Jet Center sued the previous airport authority alleging it schemed to give unfair advantages to a new competitor at the airport. That lawsuit was settled when the airport authority agreed to come up with new airport operating standards, administrate them fairly, and pay the Gary Jet Center's legal fees.
Under its contract with the airport, AvPorts is paid $120,000 per year to operate the airfield. It pays employees wages and other expenses with revenues collected at the airport as well as about $1.5 million per year in property tax receipts from Gary residents and businesses.
Under the contract, AvPorts is due to receive a 15 percent profit incentive fee once the airport's earnings before taxes, interest, depreciation and amortization (EBITDA) start to exceed expenses.
Davis said since AvPorts and Aviation Facilities Company Inc. have failed to bring any development to the airport in their first 21 months of operation there, they are now looking to increase fees on existing tenants.
The lawsuit contends if AvPorts actions against the Gary Jet Center are left unchecked, no reasonable business would undertake any large project at the airport.
"They make more money if they get more money from me and it doesn't go to the airport it goes to AvPorts," Davis said.
Source: http://www.nwitimes.com
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