March 15, 2010

Oxford Aviation expansion financing falls through

NOEL K

— By . GALLAGHER

click image to enlarge

Staff photo by Doug Jones Tuesday, Feb.21, 2007: Jim Horowitz founded Oxford Aviation 20 years ago when he moved from the boat building industry in Florida.

Staff Writer

The financial backing for a plan to open a new division of Oxford Aviation at the Sanford Regional Airport has fallen through, derailing the plans and leaving town and company officials back at the drawing board for a possible deal.

Town officials and the head of a company that was going to provide financing confirmed that the talks between Oxford Aviation and Boston-based Oso LLC were off. Oso is a privately held investment holding company that was going to provide money for the deal.

As originally envisioned, the $10 million project called for Oxford to open a 96,000-square-foot airplane-refurbishing facility, employing up to 200 people. It has been a high-profile project for the town, with Gov. John Baldacci taking part in a 2006 mock groundbreaking ceremony.

Oso President Roberto Tenenbaum said Friday that the company invested more than $400,000 in the potential deal, including a $40,000 engineering study for a new hangar. He declined to say why the negotiations broke down.

He is still interested in investing in the site, but Oxford Aviation President Jim Horowitz has signed a lease with the town.

''We're sort of in the wings,'' Tenenbaum said. If the lease were to become available, ''we would be interested in finding another operator. We could easily renew talks with the town.''

Horowitz did not return several calls seeking comment.

''Without getting into all the details, they weren't able to see their way clear,'' Sanford Director of Economic Development Les Stephens said. ''We wish they'd have been able to.''

Oso seemed a particularly fitting partner because vice president Marshall Frankel has deep Maine roots, and was mayor of Bangor for three terms. Tenenbaum is his son-in-law.

State Economic Development Commissioner John Richardson said that even if Oxford did not go forward with its planned expansion, the town still has a vastly improved and permitted site to offer another tenant.

Richardson said he did not know the details of the Oxford-Oso situation, but his office is seeing a number of potential deals founder in this difficult economic environment.

''In this tight credit market, this happens sometimes,'' Richardson said. ''There was some expectation (the Oxford-Oso) deal would happen in Sanford because they were so far down the development road. But for tight credit, I think this project would be in the ground.''

The town has written Horowitz a letter, Stephens said, informing him that Sanford wants to move forward with physical improvements at the airport, whether or not Oxford acts on its lease.

''The dilemma the town is in, is we have a site that we would really like to develop. The town needs to start making decisions about what it can do,'' Town Manager Mark Green said.

At the moment, public funds have paid to demolish a World War II-era hangar and other improvements. The town has already spent more than $300,000 on the project and was expected to spend a total of $920,000, which included a $670,000 bond.

Oxford has not begun any construction or work on the site.

Stephens said that the public money already spent or earmarked for the project is not affected by the breakdown in talks. He compared the work to improving an industrial park, where you don't necessarily know who the tenant will be.

Horowitz has said that he was interested in expanding at the Sanford airport because of its 6,000-foot landing strip, which would allow Oxford to take orders for medium and large planes.

Stephens said that one possibility is a scaled-back project with Oxford. The most costly components of the original proposal were special rooms and equipment for paint removal and application. It's possible, he said, to have a smaller Oxford project that doesn't do painting, but just refurbishing the interiors of planes, such as leather work or cabinetry.

''Oxford Aviation has put that on the table as a way to do a similar project,'' Stephens said. ''It has a lot of the same components and roughly the same number of jobs.''

Stephens said he expected to present the latest information about the site and the status of talks with Oxford to the Sanford Town Council within a few weeks.

Staff Writer Noel K. Gallagher can be contacted at 791-6387 or at:

ngallagher@pressherald.com

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