State officials worried that Kestrel will fly

By Matt Wickenheiser, BDN Staff
Posted Jan. 06, 2012, at 5:17 p.m.

In late December, Maine officials learned that Kestrel Aircraft Co. was in development talks with officials in Superior, Wis., to open a facility and create jobs there.

These are jobs that Maine still hopes to see grow here.

Kestrel has signed a 10-year lease for part of a hangar at Brunswick Landing, the site of the former Brunswick Naval Air Station. The company has about 25 employed in Brunswick and had hoped to create between 300 and 600 jobs in Maine. Last May, the company learned it would only receive $20 million in New Market Tax Credits from CEI Capital Management, though it had hoped for approximately $80 million in the credits.

That wouldn’t be $80 million cash-in-hand. Rather, the sale of the credits to companies seeking tax breaks would result in about $22 million in cash, and the remaining $60 million would be covered through some form of debt, such as bank loans or equity from other sources.

State officials and the Midcoast Regional Redevelopment Authority have been working to put together other tax credit deals and find other funding sources for Kestrel. George Gervais, commissioner of the state’s Department of Economic and Community Development, did not return calls for comment. Steve Levesque, head of the MRRA, wouldn’t comment on the Kestrel situation, but said he would know next month if the authority would be allowed to allocate New Market Tax Credits, which could help the business.

It’s unclear exactly what state officials and the city of Superior, Wis., will put together to entice Kestrel. The city is holding a public hearing on Jan. 16, a necessary step before offering Kestrel a package.

Tom Thieding, communications manager for Wisconsin Economic Development Corp., confirmed the state was working with the city of Superior on the Kestrel package, but wouldn’t comment on specifics.

Wisconsin has become more aggressive in incentive programs, said Thieding. In the current budget, lawmakers added $40 million to economic development support programs, doubling the previous amount to $80 million. The state uses income tax credits, refundable tax credits and loans, some of which are forgivable if job targets are met.

Wisconsin is undergoing a “complete makeover in economic development led by the new governor, Scott Walker,” said Adam Bruns, managing editor of Site Selection magazine, a publication that covers the whole business of where companies move and how states, regions and communities attract them.

The state doesn’t necessarily stand out for large incentive packages, said Bruns. And those sorts of packages tend to come in at the end of the decision-making process, he said.

http://bangordailynews.com/2012/01/06/business/state-officials-worried-that-kestrel-will-fly/ printed on August 21, 2014