Executive Beechcraft’s parent company has settled a lawsuit against Kansas City that arose after James Stowers III created a rival aviation facility at Wheeler Downtown Airport.
The Kansas City Council last week approved the settlement with BBA U.S. Holdings Inc., avoiding what could have been a costly trial set to start Jan. 7.
“The city is happy to put this behind us,” said assistant city attorney Dorothy Campbell. “We’re partners with our fixed base operators (at Downtown Airport) and we look forward to working with BBA. It is a wonderful thing for both parties.”
Christopher Shank, the local counsel for BBA, said his client was also glad the case was settled amicably. He declined to comment further.
Executive Beechcraft for years has had a fixed base operation at Downtown Airport on property leased from the city. It was like a service station for airplanes — selling fuel, doing mechanical work, and providing hangars and other services.
BBA purchased Executive Beechcraft in 2007. It alleged in the lawsuit filed in 2009 that Kansas City officials failed to disclose that they were negotiating with Stowers at the same time to put in a competing terminal and aviation facility at Wheeler Downtown Airport.
The lawsuit said BBA purchased Executive Beechcraft based on information from the city that it would remain the only executive terminal at the airport and paid more than it would have had it known what the city and Stowers were doing.
Stowers, a civic leader who stepped down as chairman of American Century Investments in 2007, undertook the Downtown Airport terminal and hangar project as a private business venture. It also received $3.5 million in Missouri tax credits. Dubbed Hangar 10, it opened in October 2010 as a hangar for large corporate jets and included overnight rooms for pilots and other amenities such as a health club.
City officials had argued that the city was not a part of any negotiations between BBA and Executive Beechcraft and believed they had no duty to tell BBA anything.
The lawsuit was costly to defend. The city has already spent nearly $1 million in aviation funds on an outside law firm, money the city will not recoup.
But a trial, and probable appeals, would have been even more expensive. The settlement requires no payment of money by the city.
Instead, it reduces Executive Beechcraft’s rent payments at Downtown Airport, giving rental credits totaling $2.5 million from 2013 through 2018.
Campbell said both Executive Beechcraft and Stowers are maintaining their operations at Downtown Airport and they are both doing well.
“They are both successful,” she said. “And competition is something the city certainly wants, and the FAA wants, at the airport.”