Thursday, May 24, 2012
By John Richardson jrichardson@mainetoday.com
State House Bureau
Gov. Paul LePage said he is still hopeful that Kesterel Aircraft will move forward with a manufacturing plant in Brunswick.
LePage issued a statement outlining all of the assistance offered by the state and private agencies to build the manufacturing plant at Brunswick Landing. He said he discussed the issue with the company personally earlier this week and is waiting for more financial information before finalizing the deal.
“We are ready to make this happen and have been for many months,” LePage said in the statement.
The aircraft maker announced in 2010 that it would move to Brunswick Landing, becoming the highest-profile business at the former Brunswick Naval Air Station. The company has been expected to employ as many as 600 workers building small turboprop planes.
Alan Klapmeier, Kestrel's chief executive officer and chairman, said Thursday that some Maine officials failed to follow through on a financing plan that he thought was in place. He also said he had received a better offer from officials in Superior, Wis., and might locate the plant there.
A Kestrel airplane on display at The Great State of Maine Airshow, Friday, August 26, 2011.
Below is a transcript of Gov. Paul Lepage's news release:
AUGUSTA – On Friday, Governor Paul LePage continued to voice his support for the Kestrel Project at Brunswick Landing.
“The Administration, State agencies, and Midcoast Regional Redevelopment Authority have been steadfast in their commitment to provide the available resources for this project. The Maine team has put forth a very comprehensive and competitive financial package for Kestrel,” said the Governor. “We are ready to make this happen and have been for many months.”
Earlier in the week, the Governor discussed the issue with Kestrel and told them all that was left remaining was to get their updated financial information and we would get the ball moving immediately. “All that is left is for our team to receive updated and thorough financial information from Kestrel.” The Governor added, “As Governor, it is my responsibility to ensure prudent use of Maine’s business development programs.”
Various agencies have collaborated to create the resources necessary to make this happen.
Maine officials have been consistent in their support, and have followed through with the commitments the state agreed to provide Kestrel. The State of Maine has come back to the table with additional assistance when Kestrel’s expectations of financing from Coastal Enterprises, Inc. were not met. The Finance Authority of Maine is prepared to consider a $4.75 million loan guarantee. The Midcoast Regional Redevelopment Authority is prepared to provide a $3 million guarantee or letter of credit to assist the company’s efforts to secure its capital needs. In addition, a private investor has joined the state and others at the table ready to see the project through.
Any business development program or financing package relies upon the receipt of basic financial information from the company. Upon receipt from the company of requested financial information this project may certainly move forward successfully.
“We believe in the people behind this project and want to see the project move forward as planned,” said George Gervais, Commissioner of the Maine Department of Economic and Community Development. “We all remain at the table waiting for Kestrel to join us and we’ll continue to help Kestrel seek solutions to their challenges. We all want a success story in Maine.”
In his news release, LePage appeared to blame mishaps in the deal on Coastal Enterprises Inc. — a private, nonprofit community development and finance company — but said the state had rectified the situation.
"The State of Maine has come back to the table with additional assistance when Kestrel’s expectations of financing from Coastal Enterprises, Inc. were not met," LePage said.
Charlie Spies, chief executive officer of Costal Enterprises Inc. Capital Management, a subsidary of CEI, said he was baffled by governor's statement.
Coastal Enterprises Inc. offered part of the financing for the development in Brunswick, putting together an investment package with federal New Market tax credits to steer about $5 million in cash toward Kestrel.
Spies said Coastal Enterprises never indicated it would provide more. He also said a letter of intent signed in the fall of 2010 that outlined the investment package never indicated a larger amount.
George Gervais, Commissioner of the Maine Department of Economic and Community Development, said he hasn't given up on the Kestrel deal, either. “We all remain at the table waiting for Kestrel to join us and we’ll continue to help Kestrel seek solutions to their challenges. We all want a success story in Maine,” Gervais said in the governor's news release.
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