WILMINGTON — An incoming general aviation base has recently added itself to a Federal Aviation Administration complaint against the Wilmington International Airport. This comes after more evidence of alleged unfair treatment from the airport surfaced over the last month.
READ MORE: Lease dispute involving ILM, Modern Aviation puts $90M airport investment in jeopardy
ARQ Realty, which has a private facility in the works at ILM, was added as a co-complainant to a FAA complaint against the airport on June 5.
The original complaint was filed in late April by Cape Fear Coastal Aviation, a flight school who shares an owner with ARQ. It claims ILM is violating federal fair competition standards by allowing CFCA to be pushed out of its lease by Modern Aviation, allegedly in favor of a different flight school. CFCA also has a pending civil case challenging Modern’s eviction.
Until now, ARQ hasn’t been directly involved in the flight school’s FAA complaint nor lawsuit.
However, ARQ’s $90-million base has been caught in the lease dispute’s crossfire, causing work on it to stall. ILM Director Jeff Bourk has refused to approve ARQ’s site plans due to alleged safety concerns and FAA design violations; ARQ says the design is a non-issue and has only come up because of ARQ’s connection to CFCA.
ARQ is now saying ILM has allowed those same “safety” violations to exist at its other general aviation facilities, including Modern and AeroCenter. In a response to Port City Daily on Tuesday, ILM did not deny this, but said it was investigating the assertions.
ARQ’s new complaint also claims ILM — which leases land to Modern, Aerospace and ARQ — offered Modern Aviation lower rent rates than ARQ. ILM, which did not deny the allegation and responded it uses a schedule of rents based on different factors.
“Without getting into the details, Modern’s rents were established using the rate schedules in effect when the lease or amendment was executed, as adjusted annually pursuant to the terms of the lease,” the ILM team wrote.
The new information that has come to light adds to ARQ’s suspicions on the reasoning behind Modern and ILM’s spurning of CFCA and ARQ.
CFCA’s claim is that Modern and ILM are trying to make room for a different flight school, Epic Flight Academy, that will join forces with Cape Fear Community College’s flight training instruction. CFCA claims it was in talks to partner with the college before it was evicted.
ILM has denied both statements.
The new complaint revealed ARQ hired an investigation firm to learn “why ILM and Modern Aviation had apparently worked together to remove CFCA from the airfield in favor of another lessee, despite CFCA’s diligent compliance with all lease terms.”
According to the complaint, the firm found “a connection between ILM and CFCC.”
As previously reported by PCD, the airport director’s wife, Michele Bourk, was hired by CFCC in July 2024 to be a career pilot training program instructor. CFCA suggests she was hired to work with Epic Flight Academy, the flight school CFCA claims is its favored replacement.
The investigation firm also found Epic hired Bradley Moody as a satellite operations staff member for the Wilmington region in November 2024 — around the same time Michele Bourk was hired.
Though this wasn’t noted in the complaint, CFCC President Jim Morton also served as ILM’s finance director for 15 years.
The firm identified another CFCC connection in Bill Cherry, former owner of Air Wilmington, predecessor to Modern Aviation. Cherry currently serves on the Cape Fear Community College Board of Trustees. Additionally, Cherry’s daughter, Stacey Cherry, is the sales and marketing manager for Modern Aviation.
“It is our position that this fact helps explain why ILM refuses to take any action against Modern Aviation for its discriminatory and violative actions,” CFCA and ARQ attorney Jason Kemp wrote in the FAA complaint addition.
Modern issued a notice requiring CFCA to vacate its office and hangar space by Feb. 3, 2025 — 15 months before the lease was set to end — despite CFCA never missing a rent payment or violating the lease terms. In March, a court ruled Modern was within its rights to terminate the lease, but did not give Modern permission to physically remove CFCA from the premises. Modern did so anyway, which is when ILM got involved, telling Modern to cease its eviction actions. CFCA says those actions have continued to this day with ILM’s knowledge, and the flight school remains barred from its hangar space despite continuing to pay rent. CFCA is also appealing the court’s decision to uphold the lease termination.
ARQ is in a similar holding pattern. It is still waiting on Bourk to approve its site plans, as required by the ground lease, according to ARQ and CFCA attorney Cory Reiss said to Port City Daily.
Reiss added the project was on track to break ground in August.
“That appears virtually impossible now, even if Bourk were to reverse course immediately,” Reiss said. “Delays make the project increasingly remote.”
A double-standard?
Port City Daily reported in early May that ARQ Realty has pulled back on its plans to construct its 30-acre private-aircraft base at Wilmington International Airport. The investment has been in the works since 2022 and will offer a variety of hangar options and a full-service terminal fit to accommodate 80 private planes.
What’s holding up the project is the site plan’s bifold hangar doors, which intrude onto the taxiway. ILM claims this is a safety hazard for other aircraft that may be occupying the taxiway. Over the last few months, ARQ “undertook significant cost to propose alternatives to address the perceived safety issue by the hangar door incursion,” according to the new complaint.
ARQ has offered to design its doors with windows to allow the operator to check if the coast is clear before opening the hangar door, in line with design considerations in the FAA’s Advisory Circular. ARQ has also suggested a camera system or visual or audio cues to signal another aircraft is close.
According to the complaint, ILM has rejected all of these mitigation measures. In its response to Port City Daily, ILM intimated resolution would only come when ARQ changed its doors.
ILM responded: “Our understanding of ARQ’s current site plan is that the proposal continues to include hangar doors that penetrate the taxilane when open. We invite ARQ to clarify our understanding if we are wrong or to revise its plans to comply. In the meantime, we are actively working on some ideas to discuss with ARQ that would be compliant with our requirements.”
Reiss told Port City Daily Monday that ARQ has already expensed $250,000 on the current site plans, though it was unclear how much a redesign would cost. However, if the design were to shift even in the slightest, it could result in the loss of 14 hangars, which Reiss says would constitute an even larger loss long-term.
The last correspondence on the matter occurred on May 23 between ARQ’s owner, Ben Zucker, and Bourk. In this email, Zucker pointed to other areas of the airport with taxiway incursions.
The FAA recommends taxilanes have a clearance above 79 feet, or 39.5 feet on either side of the taxilane’s centerline. However, several taxiways on ILM’s campus don’t meet this standard, according to Zucker.
The first example was ILM’s east side T-hangars, which also have bifold doors that incur 7 feet into the taxiway. Though these hangars were constructed more than 20 years ago, Zucker said ARQ’s planes would utilize that taxiway and thus ILM should repave the taxiway. Similar issues exist at three of Modern’s and one of Aerospace’s taxiways.
Zucker then provided examples of taxilanes at other airports that don’t follow the FAA recommendation, including Piedmont Triad International, Rocky Mount/Wilson Regional and Cape Fear Regional.
“We appreciate you and your team taking the time to review these safety issues and we expect a swift response/mitigation of these issues as there are some very big safety concerns according to ILM’s position on the guidelines,” Zucker wrote, later requesting a response by June 4.
Reiss told Port City Daily it has yet to come through.
ILM told PCD though it is still reviewing Zucker’s assertions, they “do not alter ILM’s requirement that the ARQ site plan comply with FAA guidelines” as noted in its Advisory Circular.
Reiss maintains the FAA recommendations are just that — recommendations. The advisory circular states: “The FAA recommends using the standards and guidelines in this AC for application at civil airports. This AC does not constitute a regulation, is not mandatory, and is not legally binding in its own right.”
In a previous press release, ILM points to another statement in the Advisory Circular to back its claims, one that notes compliance may be mandatory for projects funded with certain types of federal assistance. Though ILM receives federal grants, ARQ is wholly funded with private dollars.
While ILM claims the hangar door issue is based on safety, ARQ has other ideas, mainly based on when the issue was flagged.
In May, sources with direct knowledge of the plans told Port City Daily ARQ submitted its plans in April 2024. It began monthly meetings with airport leadership, including Bourk, in November 2024 and resubmitted plans in December 2024 based on feedback from leadership.
Emails shared with Port City Daily show Bourk sent preliminary comments on the site plan to ARQ on April 11, 2024 and December 20, 2024. There is no mention of the hangar doors in either response.
It wasn’t until March, according to those sources, that the hangar doors were brought up. Reiss and ARQ believe it was more than a coincidence that it came up amid CFCA’s lease dispute with Modern. ILM denies any ulterior motive.
Changing rates
Aside from the stalled plans, ARQ has presented more information demonstrating favoritism for Modern, namely through cheaper rent. According to Reiss, ARQ filed a public records request on April 2 requesting Modern’s lease documents; some of those were returned on June 2.
According to the complaint, ARQ was told ILM must charge no less than $0.34 per square foot of undeveloped land in order to treat all lessees the same. To prove this, ILM sent several leases to ARQ to show it was attempting to be fair, yet Modern’s leases were omitted, according to the complaint.
“Unbeknownst to ARQ, ILM agreed to a lower ground lease rate with Modern Aviation during ARQ’s negotiations with ILM,” the complaint indicates.
It adds Modern was given unimproved ground lease rates as low as $0.24 on the “side of the airport that is widely held as having more valuable real estate than the unimproved eastern side of the field.”
ILM denies this, noting the difference in Modern’s rates is based on a schedule of charges based on several factors, including whether the land is improved or unimproved and its location on ILM’s campus. For example, there are cheaper rates for the East ramp compared to the West ramps. ARQ was offered the rates associated with the West ramps.
ILM stated: “Rental rates are established at the time of lease execution, and ILM’s leases contain the same 3% annual escalation for the duration of the lease terms. Like other tenants, Modern’s premises include different categories of uses and associated rents.”
According to Reiss, ARQ has yet to speak directly to Bourk about the differences in rents, as the information was just discovered and immediately put into the new FAA complaint.
Reiss said, in response to ILM’s explanation of rent differences, the airport negotiated highly favorable rates with Modern as part of a 2023 amendment to its lease. He says Modern was given tens of thousands of square feet of improved land at a high discount, whereas the firm rates ILM points to in the schedule were adopted just one month later. Reiss said no similar leeway was offered to ARQ, in lease discussions at the same time.
Documents from ARQ’s public records request show that ARQ’s lease, dated Dec. 6, 2023, lists the rent charge as $0.34 for every square foot of usable land.
Though Modern’s initial lease was signed in 2006, rates agreed to on June 1, 2022, show a rate of $0.32 for improved land and $0.24 for unimproved land. On June 23, 2023, an amendment states ILM will bring a new master lease document to the Airport Authority’s September meeting to include new parking facilities Modern was constructing. However, the rate schedule in that amendment was still the same.
In ARQ’s eyes, the differing lease rates demonstrates partiality for Modern extending several years before the CFCA dispute and ARQ’s hangar door issue. In ARQ’s view, ILM’s now wants to push out ARQ from its campus entirely.
In a June 4 letter to John Goodchild, who represents the New Hanover County Airport Authority, Reiss wrote the authority is “purposely engineering conditions to make the site unworkable for ARQ and provoke its termination of the sublease.”
In the letter, Reiss described how communication between ARQ and ILM has further broken down over the last couple months. He said Bourk has continued to attend scheduled meetings with ARQ, yet “ceased engaging in the substantive and technical discussions.”
Over the last three meetings — March 20, April 17, and May 15 — Reiss accuses Bourk of either refusing to discuss his supposed design concerns or undermining the meetings’ purpose entirely. He says Bourk would not engage on the safety issues ILM claims are disqualifying, “silencing ARQ’s efforts to ask questions, propose mitigations, or explore alternatives.”
ILM denies the suggestion of a shift in tone on its part.
Reiss told Port City Daily Bourk threatened to terminate the March 20 session unless Joshua MacNamara, general counsel for ARQ, left the meeting. ILM confirmed this account, explaining ILM did not have its legal counsel present and thus declined to meet with MacNamara there.
At the May 15 meeting, ARQ said Bourk was eating lunch during it, demonstrating unprofessionalism and a lack of seriousness over the ongoing site plan issue.
ILM admits Bourk was eating a sandwich during this meeting because of his busy schedule, but has noted Zucker’s preference that he not do that moving forward. Though that’s not all — Reiss says Bourk, at the May 15 meeting in particular, “displayed a degree of dismissiveness that would be unthinkable if ARQ were a major airline or a favored developer.”
None of the meetings were recorded, as ARQ had done previously. According to Reiss, this is because Bourk requested meetings stop being recorded in February, a claim ILM doesn’t deny.
“We typically have someone designated to take minutes at our meetings and prefer to rely on this person rather than using AI or recordings to document the meetings,” ILM told Port City Daily. “This is not specific to ARQ.”
When it comes to recordings, North Carolina is a one-party consent state, meaning only one participant of a meeting needs to agree to being recorded. However, Reiss said ceasing the recordings was a condition of further meetings.
Through it all, ARQ maintains it will not relent to ILM’s desire to change the hangar doors, leaving both parties’ positions unchanged from where they were a month ago. Though now, ILM will have to contend with two of its tenants asking for the FAA to intervene.
“While individual decisions of an airport may not raise the concerns of the FAA generally given the airport’s duty to operate safely, the intentions of ILM have been made clear to ARQ through the totality of the circumstances,” the complaint states. “ILM intends to make ARQ’s development difficult so long as there is a Part 13 against it by CFCA.”
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