Three years after announcing it would move the bulk of its airplane production enterprise from Maine to Wisconsin, Kestrel Aircraft Co.’s lack of progress in its new primary home is coming under heavy scrutiny.
Kestrel founder Alan Klapmeier countered that Wisconsin state officials haven’t followed through with the financing necessary to get his project off the ground, and told an investigative reporter there he’s now “considering a number of other locations” for the company.
In a report published this week by Wisconsin Public Radio, state officials there characterized Kestrel as a risky investment that wasn’t properly vetted, while the company’s well-known founder — a man once called the “Steve Jobs of aviation” — responded that the state is undermining the project by not making good on its financial promises.
Five years ago, Klapmeier was met with jubilation in Maine when he said he’d bring 300 airplane manufacturing jobs to the soon-to-close Navy base in Brunswick. But less than two years later, he announced he would set up the nascent company’s primary production facility in Superior, Wisconsin, instead, leaving a much smaller team behind at a satellite shop in Brunswick.
In Wisconsin, the state promoted a $112 million cocktail of tax incentives and loans to lure Kestrel and help the company get established there, WPR reported. In documents obtained by WPR, officials with the Wisconsin Housing and Economic Development Authority — in charge of lining up $90 million in tax credits over three installments — reportedly expressed concerns about what they considered inadequate financial audits of the fledgling airplane maker, as well as the company’s ability to raise necessary matching funds.
WHEDA leaders also reportedly raised red flags over the fact that the collateral offered by Kestrel for the initial $30 million tax credit had already been offered up as collateral for financing the company was utilizing in Maine.
But Klapmeier, who rose to fame in the industry as co-founder of Cirrus Aircraft Corp. three decades ago, suggested to WPR the skepticism among agency officials amounted to a self-fulfilling prophecy. He told the radio station that, when WHEDA began to balk, it started a negative chain reaction.
“When those pieces of the financing didn’t happen on time, it’s disconcerting to the other financial people and they delay theirs as well,” Klapmeier told WPR.
Kestrel’s founder and CEO indicated the delays in promised funding could force the company to consider relocating elsewhere, while Superior city leaders told WPR they remain committed to doing whatever they can to keep the airplane maker there.