NEW HANOVER COUNTY — A general aviation project is now in a holding pattern as two of the airport’s tenants seek relief from Superior Court and the Federal Aviation Administration.
READ MORE: ILM hotel to break ground this year
ARQ Realty has pulled back on its plans to construct a 30-acre private-aircraft base at Wilmington International Airport after airport leadership refused to approve ARQ’s site plans. The $90-million 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.
According to people with direct knowledge of the plans, ILM has suddenly taken issue with hangar doors to be used onsite; ILM states the doors are at odds with Federal Aviation Administration recommendations.
However, ARQ sees the rejected site plans as retaliation for the actions taken by Cape Fear Coastal Aviation, a flight school owned by the same people as ARQ and ARQ’s partner in its base project. The flight school is currently leasing office and hangar space from Modern Aviation, another fixed-base operator and ARQ’s competitor. This is temporary, as the flight school is supposed to have a permanent home on ARQ’s campus next year.
Cape Fear Coastal Aviation filed a lawsuit against Modern in March after Modern tried to terminate the flight school’s lease agreement a year-and-a-half early. CFCA alleges Modern has no right to terminate its lease because it has not done anything wrong.
CFCA has also filed a complaint with the Federal Aviation Administration in late April, alleging ILM is allowing Modern to push CFCA out in favor of a different flight school.
While not directly involved in the complaint or litigation, ARQ is unsure if it will move forward with its base, hesitant to invest in an environment that is, in the company’s view, unwelcoming and unfair.
Aside from the erosion of trust in ILM, changing the doors to something more amenable to the airport would take a complete reworking of the base’s site plan, costing more money for ARQ and potentially a loss of planned hangars.
However, ILM says its position on the door compliance is immovable.
In response to questions asked by Port City Daily — questions ILM Director Jeff Bourk did not want to answer in a phone call — ILM sent a press release to all media on Thursday, May 8. The release states: “ILM has provided ARQ with the basis of its objections and will continue to encourage ARQ to evaluate alternative designs that conform with recommended FAA design standards.”
But it all started with a lease agreement.
Modern and CFCA go to court
The flight school entered a lease for two office spaces and nine hangars with Modern in May 2023, though Modern is leasing its property from ILM. Modern issued the termination notice to CFCA on Dec. 5, 2024, notifying the flight school it needed to vacate the premises Feb. 3, 2025 — 15 months before its lease was up.
The flight school had never defaulted on its payments nor broke the terms of the lease; neither Modern nor ILM disputed this. Because of this, CFCA brought on attorney Cory Reiss.
Reiss told Port City Daily he asked Modern’s General Manager Richard Formo why the lease was being terminated.
“The response we got in writing was ‘we decided to go in a different direction,’” Reiss said.
Reiss represented CFCA in its civil case against Modern in New Hanover County Superior Court on March 5. But despite the lack of cause, the court granted partial summary judgement to Modern, stating the company had the right to terminate the lease.
The court order states: “Per Section 3.2 of the Lease, Modern Aviation was entitled to terminate the Lease ‘at any time,’ without any reason being given, by giving sixty days’ notice to Coastal Aviation. The Lease and Section 3.2 of Lease were unambiguous.”
Reiss has filed an appeal, which has yet to be heard. Though the attorney acknowledged the presence of the above statement in the lease, he argued other parts of the lease contradicted that and were more compelling than the one sentence cited by the judge.
“They read it by taking one sentence out of context; we read it in context … if the lease is going to be terminated for cause, it needs to be with 60 days notice. That’s how I read that in context, is not that this says it’s a 36-month lease, but lo and behold, I can just kick you out whenever I want,” Reiss said.
The ruling came down on March 11, and as a result, Modern began removing CFCA’s aircraft from its hangars and changed the locks on CFCA’s offices. In response, CFCA hired a security firm to provide two guards to occupy the offices 24/7, ensuring the doors did not close on the flight school. The school has remained open despite the dispute.
ILM’s first press release on the dispute, sent out April 29, described the guards as a “private security force” and said there was “active tension between that security force and Modern’s representatives.”
Reiss reported there was one incident where a security guard stood in the way of a Modern employee trying to close a door, but there was no instance where physical contact was used. He also clarified the security personnel were unarmed.
“This possibility of a physical altercation over this situation is exactly why forcible self-help is against the law,” Reiss said. “It’s exactly why the public policy of the State of North Carolina is that you’ve got to go get an ejection order. You’ve got to get a writ of possession to have authorities handle it, because that kind of stuff used to happen before we had the rule of law.”
Modern and CFCA went back to court on March 20 upon Modern’s request to obtain an ejection order, and this time the court sided with CFCA. The ruling stated Modern had not met the requirements to evict CFCA under North Carolina General Statute 42-26(a), which only allows for eviction in three circumstances:
- The tenant holds over after the term has expired
- The tenant or lessee has done some act or omission specified in the lease causing termination
- Nonpayment
CFCA did not get its keys back until March 27, and Modern had to be prompted by ILM to do so. Reiss said CFCA still ended up locked out again after Modern employees made their way into CFCA’s offices around midnight on April 6.
It was only when ILM stepped in that CFCA got its keys back, though the airport didn’t turn out to be the savior CFCA wanted. CFCA claims Modern did not — and still hasn’t — allowed CFCA’s aircraft to reoccupy the hangars nor restored Wifi to the offices.
Modern has not publicly stated why it wants CFCA out and did not respond to Port City Daily’s request for an interview. However, Reiss has connected some dots.
One is that CFCA and ARQ are direct competitors to Modern and have even been accused of poaching employees from Modern. Reiss said five employees left Modern for ARQ since it opened but refuted the poaching accusation, noting it’s not unusual for employees to leave one company for another.
CFCA also claims Modern is trying to replace it with another flight school, Epic Flight Academy.
ILM was approached by Epic Flight Academy, though the airport said in the May 8 press release that Bourk treated the request as it does all others. Specifically, he gave the flight school ILM’s Minimum Standards for General Aviation, contact information for Modern and Aero Center, and a copy to a CFCC trustee to discuss options.
CFCA also has concerns Epic would take over the grant-funded Professional Pilot Program with Cape Fear Community College. In the FAA complaint, CFCA said it was “instrumental in planning that program from its inception, yet on the eve of its implementation Modern has sought to delete CFCA from the picture.” The complaint notes CFCA was a partner in the program until the college hired a director for the program — Michele Bourk, spouse of ILM Director Jeffrey Bourk.
Port City Daily reached out to Michele Bourk, but she deferred to CFCC’s public relations department, who said the college does not refer students to any specific flight school and is not partnered with any flight schools.
ARQ’s plans
Though not a party in the litigation, ARQ was brought into the melee when its site plans were rejected in March, when CFCA was in the thick of its dispute with Modern.
Per ILM’s May 8 press release, ARQ submitted site plans on Jan. 24, 2025 and the airport responded with its site plan comments on Feb. 14, 2025. It states ARQ took issue with one comment, the note about the hangar doors, and the parties have been in further discussions about this comment since February.
However, sources with direct knowledge of the plans told Port City Daily ARQ submitted its plans, inclusive of the hangar doors that are now the issue, in April 2024. It resubmitted in December 2024 and began monthly meetings with airport leadership, including Bourk, in November.
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 sources close to the matter, that the hangar doors were brought up.
Not only was the issue’s timing suspicious to ARQ, but sources close to the matter told PCD the doors are also non-issue.
The doors are bi-fold doors, meaning they intrude on the interior of a hangar when open. FAA recommendations suggest a 15-foot distance between the plane and walls of the hangar to prevent damage to planes and property. ARQ’s doors do penetrate this 15-foot buffer, but only by a few feet. ILM also claims the doors would encroach on and block taxilanes and impede access to other hangars when opened.
However, Reiss said the FAA recommendations are just that — recommendations. They are outlined in the FAA’s Advisory Circular for facility design standards, which ILM referenced in its May 8 press release describing CFCA’s noncompliance as a public safety concern.
Per the link provided by ILM, 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.”
ILM points to another statement in the advisory circular too, one that notes compliance may be mandatory for projects funded with certain types of federal assistance.
Though ILM accepts federal funds, ARQ is financed in full by private investment. Aircraft owners uncomfortable with ARQ’s hangars will have the choice on whether to store their plane there, with Modern Aviation and Aero Center as two other hangar options.
According to people with knowledge of the plans, ARQ and ILM have gone back and forth over the door issue. After questioning the necessity of a door-change, ARQ convinced Bourk and ILM leadership to look into approving the plans without having to change the doors but also limiting the airport’s liability.
Then, at ARQ and ILM’s monthly meeting in early April, the airport had changed the site plans and reverted back to its stance against the doors. ARQ asked the airport to show it the regulations it was required to follow and received them April 25.
Sources say there has been no contact between the two entities since.
FAA complaint
In the letter accompanying CFCA’s FAA complaint, Reiss writes CFCA and ARQ are suffering a “crisis of faith” in ILM, one with broader implications for the Cape Fear region.
Reiss writes: “Does ILM value its General Aviation mission? Hardly a week passes when ILM does not trumpet a new commercial airline tenant or non-stop route, but recent events, including those at issue in the Part 13 Complaint and ILM’s arbitrary treatment of ARQ’s development plan, cloud ILM’s commitment to pilots.”
However, in the two press releases it has sent, ILM has defended its actions, stating “ILM has acted appropriately and objectively in accordance with its obligations as a landlord and as a commercial airport. Indeed, ILM has actively engaged with CFCA and Modern to address concerns and ensure compliance with applicable requirements.”
ILM claims it was unaware Modern would be issuing a termination notice in December, but began investigating the issue after the March 11 court order, which was also the day Modern began evicting CFCA. ILM said CFCA representatives contacted ILM to express concerns and ILM “promptly reached out to Modern and CFCA representatives to discuss the matter and remind the parties of their legal obligations and to facilitate resolution of CFCA’s concerns regarding access to Modern’s premises.”
However, Modern didn’t comply with ILM’s request to stop the self-help actions until April 24. ILM states it thought the matter resolved at this point; according to the airport, it confirmed on April 25 that CFCA’s internet access was working and CFCA had access to the ramp and common areas of the airport. According to ILM, Modern stated that it would continue to provide access to overnight ramp parking, hangar space, fueling, GPU, lavatory service, towing, and any other standard FBO services.
“CFCA responded by refusing to discharge the private security force and by making additional demands relating to the storage of its aircraft and access to common resources (including internet access) at the airport,” ILM stated in its press release.
Reiss said the matter wasn’t resolved. When CFCA began moving its aircraft back into the hangar, the attorney said Formo, Modern’s manager, told CFCA “we are not bringing an aircraft back or servicing any CFCA aircraft.”
Without hangar space, the flight school’s aircraft were exposed to the elements.
“Planes do not like things like hail and rain and weather, if you’re trying to keep them nice,” Reiss said.
From ILM’s point of view, the issue had been worked out and therefore was surprised when CFCA notified ILM of its FAA complaint against the airport on April 28. Whether a lack of awareness or a willful disregard, Reiss said ILM’s failure to exercise authority over Modern is what prompted the complaint.
The complaint states ILM and Modern “have engaged in coordinated actions designed to restrict fair competition, deny reasonable access, and impair the business operations of CFCA” all things the airport can’t do if it receives federal money.
It states ILM’s actions are in violation of AIP Grant Assurances 22 (Economic Nondiscrimination) and 23 (Exclusive Rights), as well as the objectives of 49 USC § 47101(d) which mandates that all airports receiving federal funds operate in a manner that is fair, open, and accessible to all qualified users.
Therefore, CFCA is asking the FAA to do three things:
- Initiate a formal investigation into the practices described herein, including ILM’s failure to uphold its federal obligations and the anticompetitive behavior of its sublessee
- Direct ILM Airport Authority and Modern to immediately cease all discriminatory, retaliatory, and anticompetitive conduct
- Issue any other orders or take any other action necessary to bring ILM Airport into full compliance with its federal grant obligations and to protect the rights of aeronautical users at the airport
ILM has refuted all of CFCA’s claims of wrongdoing and says it will fight the complaint.
“While ILM is not able to comment on CFCA’s pending FAA complaint, I remain confident in the legality of ILM’s actions and its commitment to supporting the general aviation community at the airport,” Bourk wrote in Thursday’s press release. “We expect our general aviation tenants to comply with the law and to treat each other with professionalism and respect. We will not hesitate to take appropriate action to ensure compliance.”
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