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"Gary Jet Center in rent dispute"


 
Tuesday, December 12, 2006

Gary Jet Center in rent dispute
Owner says new hangar project in danger
BY KEITH BENMAN
The Northwest (IN) Times

 
GARY - The owner of the Gary Jet Center told the Gary/Chicago International
Airport Authority on Monday he will have to call off a $4.1 million hangar
project if the airport changes the way it collects his rent.

Jet Center owner Will Davis told the authority board he has paid the total
of rent, fuel flowage fees and landing fees in exchange for the airport's
hospitality for many years under the terms of his lease. Those items will
total about $220,000 this year.

New airport director Chris Curry on Monday told the authority board his
review of airport leases and contracts shows Davis may be underpaying.
Authority lawyer Patrick Lyp said a review of the lease shows the Jet Center
should be paying certain scheduled amounts tied to projected growth in
revenues.

The difference would be small for 2006, about $8,000. But Davis told the
board he is concerned what would happen in the event of something as
significant as the aviation slump that followed the terrorist attacks of
Sept. 11, 2001.

In a case like that, fuel flowage fees and landing fees would sag, but the
Jet Center would still have to meet the projected amounts contained in the
schedule.

Curry said any decision on how to enforce the lease will be decided by the
authority board at its next monthly meeting.

The Jet Center and its lawyers are also concerned about the lease because it
will be used as part of the security for $4.1 million in airport authority
bonding for the Jet Center's new hangar. The Jet Center must pay back that
money out of its own revenues.

The Jet Center will also pay the airport $14,820 per year in land rent for
the new hangar, which will be indexed for inflation.

The Gary Jet Center is the airport's fixed-base operator, which means it
supplies fuel and other aviation services for private planes that fly in. It
also manages a fleet of turbo props and business jets.

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