The city of Bend is working to reach a settlement with two aviation companies at the Bend Municipal Airport that filed a $15.3 million lawsuit against the city alleging fraud and breach of contract, according to city officials.
The settlement could mark the end of years of legal battles between the city of Bend and Aero Facilities and Professional Air, two tenants at the Bend Municipal Airport. The companies say the city committed fraud and breached contracts when dealing with development and lease agreements at the airport, but the city says the two companies’ claims aren’t valid.
A trial in Deschutes County Circuit Court earlier this month ended in a mistrial, according to City Attorney Mary Winters. The trial will have to be rescheduled, or the city and the two aviation companies can reach a settlement in the meantime, said Winters.
“The parties are currently working cooperatively toward settlement,” she said, adding that any agreement would have to first be approved by Bend city councilors.
Winters would not discuss the terms of the potential settlement but said that the city and the companies want to reach an agreement that’s fair for both of them. A settlement would also mean the lawsuit against the city would be dismissed, Winters said.
“We would publicly discuss the terms of any settlement when final settlement is reached,” she said.
Winters said the Bend City Council is expected to discuss a proposed settlement on June 7. Neither Professional Air nor Aero Facilities could be reached after multiple calls for comment.
The two companies filed the original, 132-page lawsuit in February 2013 and asked for $4 million, but it was amended in 2014 to ask for $15.3 million.
The lawsuit was filed because of problems with a 2006 development agreement between the city and Aero Facilities. The agreement allowed the company to develop aviation facilities, including a fueling station at the east side of the Bend Municipal Airport. But in 2011, the city decided it wanted to change the agreement and eventually let another company build a fuel station, according to the lawsuit.
Aero Facilities says it spent at least $4.1 million improving the east side of the airport, and it is seeking about $11.85 million for lost profits and damages. Meanwhile, Professional Air, which shares some of the same owners as Aero Facilities, is seeking about $3.5 million for damages and lost profits after the city allegedly removed some of the company’s customer parking and tried to double the cost of rent.
City officials, on the other hand, have said that they don’t agree with the accusations, and that the companies’ claims aren’t valid.
Original article can be found here: http://www.bendbulletin.com
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