Kestrel Aircraft’s top executive says he’s not trying to pit Maine against Wisconsin, but he will locate the company’s aircraft manufacturing plant in whichever state is first to put a viable financing package in front of him.
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 is expected to employ as many as 600 workers building a new type of six- to eight-passenger turboprop plane.
Additional Photos
Now, there’s a good chance that the manufacturing plant will be built in Superior, Wis., where officials are rapidly pulling together a mix of state and local financing to help Kestrel build its plant.
Alan Klapmeier, Kestrel’s chief executive officer and chairman, said some Maine officials have failed to follow through on a financing plan that he thought was in place in 2010.
“We did not say, ‘Tell us your best offer and we’ll go and play it against someone else,’ ” said Klapmeier, and the company isn’t interested in trying to “take a bunch of money from people and then go and take a bunch of money from someone else.”
Klapmeier has an office in Duluth, Minn., just across a bay off Lake Superior from Superior, Wis. Some of the engineers who are working on the design of the plane also are in Duluth, so Superior has a geographic advantage.
Klapmeier indicated that the talks with Wisconsin officials are well along and he won’t wait to see what Maine can do if Wisconsin makes a workable offer first.
Wisconsin officials appear to be moving quickly to do that. This week, a committee in Douglas County, Wis., unanimously approved selling 13.3 acres next to an airport to a city redevelopment agency. The full county board is scheduled to vote on the plan next week.
Superior could then sell the land to Kestrel for $500,000. Klapmeier said three local agencies would loan the company about $3 million, and he’s awaiting word from state officials on tax cuts and rebates that would help fund the project.
“We’re having a conversation about a deal that would do it,” Klapmeier said of his contact with officials in Wisconsin. “If there was a deal we could take in Maine, we’d take it.”
Klapmeier said he thought he had that deal when he announced more than a year ago that Kestrel would locate in Brunswick.
He said that at a final meeting with regional and state economic development officials, he checked off the pieces of the package that Kestrel needed and asked if everyone agreed to do their part.
All of the heads around the table at that meeting in Augusta nodded, he said, but the financing has not come through.
Klapmeier declined to identify the people who he feels have failed to come up with the aid Kestrel needs. But he said the search for financing in Maine “is much more complicated, which means less productive, than it ought to be.”
Steve Levesque, executive director of the Midcoast Regional Redevelopment Authority, which is in charge of redeveloping the former Navy base, said, “Maine doesn’t have a lot of freebies” to offer.
“I think they came here with good intentions and they want to be here,” Levesque said of Kestrel. “But at the same time, I do understand that if they can’t get the financing here, they will go where they can. They want to make Maine work, but if they can’t make Maine work, they’re going to go where it can work.”
Coastal Enterprises Inc. — a private, nonprofit community development and finance company — offered part of the financing for the development in Brunswick, putting together a package with federal New Markets tax credits to steer about $5 million in cash toward Kestrel. The company was banking on about three times that amount.
Officials with Coastal Enterprises said they never indicated they would provide more help.
“We always told them we would try to get them as many of the (packages of) tax credits as we could, but it would not be all from us,” said Charlie Spies, chief executive officer of CEI Capital Management. He said the tax credit deal with Kestrel is one of the company’s largest.
Klapmeier said that after his company announced the project in Brunswick, Kestrel officials were contacted regularly by development officials from around the country, who tried to lure the project from Maine before it was too far along.
The company turned away the suitors, he said — until the end of last summer.
“As my naive view that it was still going to get done in Maine waned, it became clear that we had to consider alternatives,” Klapmeier said.
He dismissed most of the offers because they lacked specifics for financing, he said, but Wisconsin put together a plan that looked promising, leading the company to begin talks.
Klapmeier said no deal has been signed, and officials in Maine are still trying to keep Kestrel Aircraft in Brunswick.
Adrienne Bennett, spokeswoman for Gov. Paul LePage, said the state is still talking to Kestrel officials, but she declined to offer information on the discussions.
“We will continue to move forward with Kestrel, but it would be premature to discuss the negotiations,” which are being conducted by George Gervais, commissioner of the Department of Economic and Community Development, she said.
Levesque said the Midcoast Regional Redevelopment Authority has applied to the U.S. Treasury Department to be a New Market tax credit allocator like Coastal Enterprises. It also has sought authority to issue credits that could provide — if all were steered to Kestrel — more than $15 million in cash for the company.
But there’s no guarantee that the authority will be approved as an allocator or get the amount it has requested, and an answer isn’t expected until February, Levesque said. In the meantime, he said, the authority is trying to help Kestrel get short-term financing to buy more time.
Klapmeier doesn’t seem interested in more time.
“This program is starved for cash and we are constantly missing opportunities” because of the time it has taken to nail down financing, he said. “We will not wait.”
He noted that even if the manufacturing plant is built elsewhere, Kestrel Aeroworks, which repairs and upgrades aircraft, would stay in Brunswick, satisfying a requirement of the tax credit package.
That division employs about 25 workers.
Klapmeier said locating in Maine seemed like a dream in 2010, but he now seems resigned to not seeing it come true. “We all thought it was going to work and it hasn’t,” he said.
Staff Writer Edward D. Murphy can be contacted at 791-6465 or at:
emurphy@pressherald.com
Send questions/comments to the editors.
Success. Please wait for the page to reload. If the page does not reload within 5 seconds, please refresh the page.
Enter your email and password to access comments.
Hi, to comment on stories you must . This profile is in addition to your subscription and website login.
Already have a commenting profile? .
Invalid username/password.
Please check your email to confirm and complete your registration.
Only subscribers are eligible to post comments. Please subscribe or login first for digital access. Here’s why.
Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.