A district court Friday dismissed the lawsuit an aviation company brought against the city of Galveston for terminating a lease the company held at Scholes International Airport.

The decision forces the company to close business, according to its attorney.

Galveston Aviation Services Inc., in the June 25 lawsuit, claimed the city had wrongfully terminated its lease, but the city argued the company had refused to bring its fuel tanks up to new federal and city standards.

The company also claimed the city was trying to exclude Galveston Aviation Services from the airport so a new company that began operations in March, Island Jet Center LLP, could be the sole provider of fixed-based operations at the airport, according to the lawsuit.

Assistant City Attorney Kim Coogan on Friday argued the city had immunity against the lawsuit because the contract between the aviation service and the city was only for real estate and not for goods and services.

Judge Lonnie Cox of the 56th District Court determined the court did not have jurisdiction over the lawsuit.

“The goods and services that are provided by Galveston Aviation Services go directly to the benefit of the people and the companies that fly in and out of Scholes Field, not to the benefit of the city of Galveston,” Cox said.

This ruling forces the company to close, said Dan G. Hoffman, the company’s attorney.

“If you’re ruling today that you have no jurisdiction, then basically, the lawsuit’s over, we’re out of business, etcetera,” Hoffman said.

Both Galveston Aviation and Island Jet Center are fixed-based operators, which provide services such as fuel and hotel rentals for private planes.

The company’s 10-year lease was up in March, and the city required the company to bring its fuel tanks up to code with new standards in order to renew the lease, city spokeswoman Marissa Barnett said.

The city gave the company a month-to-month contract and time to bring its fuel tanks up to code, but the company refused to do so, Barnett said. The city then terminated the company’s lease, Barnett said.

Bu the company argued its fuel tanks were up to code and in compliance with the federal standards, Galveston Aviation General Manager Vicki McCormick said.

McCormick accused City Airport Director Mike Shahan of showing favoritism to Island Jet Center by encouraging customers to get fuel from the company.

“He’s permitting things to happen in ways that I found inappropriate,” McCormick said.

Neither Shahan nor the city showed any favoritism to Island Jet Center, Barnett said.

“Galveston Aviation Services was offered the same lease terms as the other company and any company wanting to do business at the airport,” Barnett said.

Island Jet Center did not seek or receive any preferential treatment from the city, company owner Jay Balentine said Friday.

The local community asked Balentine to open a fixed-based operator company, he said.

Balentine, a Galveston resident, owns The Meridian Retirement Community, 2228 Seawall Blvd., he said.

Galveston Aviation Services is owned by Doug Kingsbury, a Houston resident, who also owns Central Helicopter Services Inc.

Keri Heath: 409-683-5241; or on Twitter @HeathKeri.

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