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TO: The Mayor and City Council
FROM: The Mayor's Office
The Law Department
The Airport Division
DATE: July 23, 2021
SUBJECT:
The acquisition of the assets of Lumanair, Inc. ("Lumanair") by Carver Aero, LLC. ("Carver").
PURPOSE:
To grant the City's consent of the assignment of Lumanair lease at the Aurora Municipal Airport to Carver.
BACKGROUND:
Lumanair is a long-time tenant at Aurora Municipal Airport and one of its two fixed base operators (FBOs) providing fuel to customers.
In the summer of 2020, the City and Lumanair amicably resolved years-long litigation arising from the City's insistence that Lumanair replace its existing below-ground fuel farm with an above-ground fuel farm in compliance with regulations known as "Minimum Standards" adopted by the City Council. Lumanair, for its part, had argued that because the City adopted its Minimum Standards after Lumanair's existing lease was already in effect, the City could not use these Minimum Standards to effectively and unilaterally modify its lease.
To resolve this issue, the City and Lumanair entered into an Amended and Restated Ground Lease in August 2020, which mirrors the provisions of the City's lease with the other airport FBO and required Lumanair to replace its existing fuel farm by August 1, 2022 and comply with all other Minimum Standards in place at the airport. Lumanair was also required to make a minimum of $1,200,000 in capital improvements at the airport during the first five-year term of the new lease, including $1,000,000 in the first year.
For the past year, Lumanair has been in negotiations to sell its assets (including its rights under the lease) to Carver, which operates as an FBO at four other airports in the Midwest. Those negotiations have concluded, and both parties would like to close the sale as soon as possible. Under the terms of Lumanair's lease, the City's approval of an assignment is required, but the City may not unreasonably withhold its consent.
DISC...
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