BRUNSWICK, Maine — Kestrel Aircraft Co. President Alan Klapmeier said Wednesday that some of the 300 to 600 manufacturing jobs he expected to create at Brunswick Landing could instead go elsewhere because previously anticipated federal funding now hangs in jeopardy.
In an interview Wednesday with The Times Record, Klapmeier confirmed he is considering building a manufacturing facility in Berlin, N.H. — or in another location entirely — where a biomass plant is now under construction. He said, however, that Kestrel will maintain a presence in Brunswick.
Increased competition for federal economic development dollars complicates Kestrel’s plan to add jobs in Brunswick, Klapmeier said.
“We are really committed to Maine, and this is where we want to be,” he said. “We’re not happy at being forced to look at other options, but we have to fund this project.”
Klapmeier declined to say how many jobs originally envisioned for Brunswick might instead be located in New Hampshire or other states Kestrel is negotiating with. New Hampshire Public Radio reported last week that Klapmeier said a Kestrel facility in Berlin would create about 150 to 200 jobs including local hiring — and more if Kestrel did more in Berlin than manufacture components.
In July 2010, Klapmeier announced a $100 million project to design and build a new Turboprop single engine plane at Brunswick Landing.
Although the company announced plans for 300 jobs, “We knew it could be as many as 600,” he said Wednesday.
Kestrel and the Midcoast Regional Redevelopment Authority signed a 10-year-lease for part of Hangar 6, the newest and largest hangar at the former Navy base. Terms of the lease include that Kestrel would attempt to secure up to $90 million to support its aircraft design, development and production operation, and that MRRA would work with Wiscasset-based CEI Capital Management “and others to facilitate project financing,” using the complicated federal New Markets Tax Credit Program.
Charlie Spies, chief executive officer of CEI Capital Management, said Wednesday that his organization committed $20 million in New Market Tax Credit allocation to Kestrel, which Kestrel used to help fund the existing repair and maintenance facility currently at Hangar 6.
“That’s a viable business that should be there for seven years, and that’s a good thing,” Spies said. “That could stand alone as a business operation.”
“We did tell [Kestrel] we would do our best to help facilitate [the overall funding] but we never committed to providing it through our own allocation,” Spies said. “We got the first piece there, but there are a lot of pieces that have to come together beyond where we are.”
“Whether they would do some of their manufacturing in New Hampshire, it may just be a business decision for them,” Spies added.
MRRA executive director Steve Levesque said Wednesday that MRRA applied to the U.S. Department of the Treasury to become authorized to allocate $70 million in New Market Tax Credits. If the application is successful, he said, the authority’s first project would be to assist Kestrel.
“MRRA is committed to helping Kestrel be successful with whatever resources we can gather,” he said. “We want them to be here, we want them to grow, we want to grow other aviation businesses in Maine.”
Today, Kestrel employs about 25 people in Brunswick, including 10 designers, and Klapmeier said that while he always assumed all of the new jobs would be in Brunswick, other communities have approached Kestrel about those jobs.
“New Hampshire makes a lot of sense, and would make a lot of sense for the people in Brunswick” due to the relative proximity of Berlin and Brunswick, he said. One advantage is that Kestrel could draw employees from two work forces.
“If this grew as large as we think it can, we would have a lot of trouble hiring enough people [from one area],” he said.
Berlin’s biomass plant would offer lower electricity costs and “waste heat” that Klapmeier said could help heat a manufacturing facility and help preheat the ovens used to make plane components.
“When you listen to them talk about the project and what they think they can do to leverage jobs, it’s very well thought-out,” he said.
Levesque said he knew Klapmeier was considering a “satellite facility” somewhere else in Maine where Kestrel could manufacture components.
“Alan has always been supportive of trying to help rural economies,” Levesque said. “Alan spoke to me about some communities he was looking at in Maine, so that wasn’t a surprise that some of that could occur somewhere else. The assembly facility would still be here.”
Levesque said companies such as Kestrel encounter challenges trying to raise the “large capital” required to grow in Maine.
Still, Klapmeier said no decision has been made about how many jobs originally envisioned for Brunswick might emerge elsewhere. That decision, he said, depends on funding.
In an email to The Times Record on Wednesday, U.S. Rep. Chellie Pingree, a Democrat who represents Maine’s 1st District, wrote that she’ll continue to do everything she can to make it possible for Kestrel to locate those jobs in Maine.
“Brunswick has the people and the facilities to support the kind of work Kestrel wants to do and I think this is the right place for those manufacturing jobs,” she wrote.
Klapmeier said he still hopes to do the same, adding, “In Brunswick’s interest, and in Maine’s interest, we’d like to have as many of the jobs be here in Brunswick.”
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