Kestrel to migrate to Wisconsin

Posted Wednesday, January 18, 2012 in News

Kestrel to migrate to Wisconsin

Kestrel aircraft in the air.  Courtesy Aviation Week.

by Gina Hamilton

BRUNSWICK — Kestrel Aircraft, one of the best hopes for the new "Brunswick Landing" development that lies on the former Brunswick Naval Air Station, announced Monday that it was taking its manufacturing plant ... and the 600 jobs that go with it ... to Wisconsin, rather than Brunswick. 

In the end, the decision came down to which state was offering the best federal supports.

On Friday, Gov. Paul LePage proposed $7.75 million in possible loan guarantees to bridge the gap between what the company could raise elsewhere and what it needed.

But over the weekend, Wisconsin made a proposal with crucial commitments involving the federal New Markets Tax Credit Program. The Wisconsin Housing and Economic Development Authority will provide $30 million in tax-credit allocations immediately, a second allocation of $30 million by the end of this year, and a commitment for a third allocation of $30 million in 2013 if the authority has it available, Alan Klapmeier of Kestrel Aircraft was reported to have said Tuesday.

By comparison, the company received a $20 million tax credit allocation in Maine through Wiscasset-based CEI, a nonprofit community development corporation, and the status of future allocations was unclear. At the beginning of the process, CEI had offered $80 million in tax credits, but was unable to meet that commitment.

In the end, it was the uncertainty of the proposal that lured Kestrel away. 

On Tuesday, it was unclear why Maine's economic development authorities lacked the ability to match the offer.

In July 2010, Kestral's Alan Klapmeier announced a $100 million project to design and build new Turboprop single engine planes at Brunswick Landing. Steve Levesque told the New Maine Times in November that Klapmeier’s decision to locate the new facility in Brunswick was based on a number of factors, including that CEI's Capital Management group (CCML) agreed to assist Kestrel with its financing “in four $20 million” installments through the New Market Tax Credit allocation program.

In April 2011, Kestrel secured the first $20 million allocation, but Klapmeier said in November that the additional funding did not materialize, and as a result, Kestrel was forced to consider building another facility elsewhere.  At the time, they were looking at New Hampshire or the western Maine mountains, possibly in the Saddleback region.
According to Levesque, CCML informed Kestrel in May “that they cannot allocate more than $20 million to the project, leaving a gap of approximately $60 million. “Since then, MRRA has been working with Kestrel, Commissioner George Gervais [of the Economic and Community Development Office], the Governor’s office, Sen. Stan Gerzofsky [D-Brunswick] and others at the state and federal level to convince CCML to do an additional (installment),” locate additional funding or tax credits, and to approve an application by MRRA to become certified to allocate $70 million in New Market Tax Credits.
Neither Steve Levesque, nor Alan Klapmeier, nor anyone from Gov. Paul LePage's office returned our calls by presstime. 
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