Virginia Aviation plans to drop suit pending agreement

By Bryan Gentry

Published: June 23, 2008

Virginia Aviation plans to drop a lawsuit against the city of Lynchburg if City Council members tonight approve two new lease agreements for the Lynchburg Regional Airport.

One lease agreement would give Virginia Aviation a new five-year lease, which could then be renewed for another five years.

Another agreement would let Virginia Aviation and Falwell Aviation share the management of the airport’s fuel farm.

Jim Lampman, owner of Virginia Aviation, said the new agreements would put his company on equal footing with Falwell Aviation, whose franchise at the airport sparked Virginia Aviation’s lawsuit last year.

“It’s a compromise position the city has offered to settle a lawsuit,” Lampman said.

Last year Falwell Aviation was planning to build a new hangar at the airport, which is in Campbell County but managed by the city.

According to a City Council agenda from June 2007, the company asked for a franchise and a 20-year lease to ensure it would recover the cost of building the hangar.

Virginia Aviation also placed a bid for the franchise agreement and 20-year lease, offering more money for the lease.

When City Council awarded the franchise to Falwell Aviation, Virginia Aviation claimed the city had skipped some legally required steps in rejecting its bid.

The company filed suit in July 2007. Since then, the city, the airport and the two companies have worked toward a compromise.

On one end of the compromise, the city is proposing a new five-year lease for Virginia Aviation — its current lease had one year left — that could then be renewed for another five years.

Part of the compromise concerns the management of the airport’s fuel storage tanks and pumping equipment.

City attorney Walter Erwin said Virginia Aviation has a lease on the fuel equipment. But when that lease was awarded, Virginia Aviation was the airport’s only fixed-base operator.

He said after Falwell Aviation became a fixed-base operator, the city considered several options, including the possibility of having the city take over the fuel farm.

Instead, the city agreed to allow the companies to share management of the fuel facilities.

“They agreed to an arrangement that they think is mutually beneficial to everyone,” Erwin said. “It will increase some revenues coming to the city, and instead of one fixed-base-operator having control of the fuel farm, the two … operators that we have at the airport will run it together.”

According to a report prepared for City Council, the airport management estimates fuel operations to yield $90,000 per year, with potential increases down the road as the airport’s per-gallon fee goes up.

City Manager Kimball Payne said he’s not sure how much the agreement will impact the city finances. However, the budget can be adjusted through the fiscal year.

Earlier this year, reports showed the airport was spending less city money than was budgeted, thanks to increased fuel usage and leases.

The new agreements “should impact the 2009 budget to a positive extent, based on how everything goes,” Payne said.

Lampman said he feels the compromise solves the problems his company’s lawsuit addressed.

“What it will do, it will essentially put us on an equal footing now,” he said. “Falwell (Aviation) will have a long-term contract, and we will have a long-term contract.”