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Gary Airport proposes terms for second airport services business

Updated: February 25, 2013 10:22PM



GARY — The Gary/Chicago International Airport has proposed terms for a new full-service, fixed-based operator.

The Airport Authority at its Monday meeting voted 6-0, with board member Ross Amundson absent, to OK the proposed terms under which Chicago-based East Lake Management would operate. Al Stanley, vice president with airport consultant group JClark Aviation, told the board East Lake would spend no less than $3 million on the investment.

East Lake would be the second FBO — a business that provides aeronautical services such as fuel, hangar space and lessons — at the airport, with the other being Gary Jet Center.

The terms as they were presented consisted of three points. East Lake’s lease would be 20 years for 2 acres of property at 42 cents per square foot per month — or $18,295.20 per acre — with three 5-year options, Stanley said. The company would hold an option for another acre and would pay 25 percent of the monthly lease rate — or $4,573.80 — to keep it.

East Lake would also lease the former Jet Select hangar for $2,800 a month. Jet Select’s lease expires in June, Stanley said.

The third lease point would have East Lake agreeing to a 15-year lease of 60 T-hangars with four 5-year options. East Lake would pay the airport either 80 percent of the gross revenues from those leases or a minimum of $91,000, which is what the airport now receives with 65 percent occupancy rate.

Airport attorney Pat Lyp said the terms are not necessarily final. Stanley said a final lease agreement could be presented to the board at its next meeting.

“If anything, (the airport is) holding them up,” Stanley said. “(East Lake) is very interested in making the FBO happen.”

Stanley did say a finalized fuel flow policy for the FBO would be presented to the board next.

In other business, the board tabled a motion to approve three contracts related to the potential public-private partnership the airport is looking into. Stanley said JClark has secured three service contracts from three differernt vendors that would structure the aviation, financial and communications parts of the deal, at-risk meaning the vendors wouldn’t be paid for their services if they were unable to procure a private operator.

The private operator would pay for the vendors, not the city nor the airport, he said.

Authority members Cornell Collins and Dvid Bochnowski, who serve on the ad-hoc committee researching the partnership, acknowledged the committee needs outside help but wanted a better understanding of what was involved.

“We just need to understand the details,” Bochnowski said.

Bochonowski asked Attorney Lyp to look over the contracts prior to the next ad-hoc committee in two weeks.



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