The story of WEDC-backed Kestrel Aircraft has taken another turn with the announcement that a new foreign investor will help bankroll the venture.
But a report from Maine says the investment will be used to rehire employees at the Brunswick Landing facility in that state — not to fund operations in Wisconsin.
"As we have funding, we bring people back and say, 'Here's the next thing we need to get done,'" Kestrel CEO Alan Klapmeier told the Bangor Daily News this week.
Kestrel had promised to build an airplane manufacturing plant in Maine before it announced in January 2012 a move to Superior based on financial incentives from the Wisconsin Economic Development Corp.
When the announcement was made about Kestrel moving to Wisconsin, Gov. Scott Walker said the company would eventually employ 600 people, but so far the company has just a few dozen workers here.
WEDC has provided $4 million in loans to the firm, with the city of Superior contributing another $2.4 million in loans. In addition, Kestrel is certified to receive up to $18 million in enterprise zone tax credits from WEDC, and $30 million in federal New Market Tax Credits from the Wisconsin Housing and Economic Development Authority (WHEDA).
No dollar figure has been attached to the new foreign investor but Klapmeier downplayed the amount of money. Kestrel is looking to develop a 6- to 8-passenger carbon fiber plane Klapmeier says will be the fastest single-engine turboprop aircraft on the market.
"It's positive news for the company, but it's not big news,” he told the Bangor paper.
In the Bangor report, Klapmeier also says it’s now unclear how much of the project the company will do in Maine and how much will happen in Wisconsin.
Klapmeier — who with his brother and fellow Wisconsin native Dale had founded the successful Cirrus aircraft company in Duluth — did not say how many employees were now at the Brunswick location, only that it’s "more than there were last week."
The aircraft industry website flightglobal.com reported this week that Kestrel secured a new foreign investor and was looking to get its plane to market within three years. Those comments came from company's technical officer, R.J. Siegel, during an appearance at the Experimental Aircraft Association conference in Oshkosh.
The company says it needs to raise between $100 million and $125 million to get the plane designed, built and certified by the FAA.
Klapmeier had initially told officials in Maine that it was going to build a manufacturing plant in Brunswick by 2010 but later complained the state had not delivered on promised financial assistance.
Klapmeier has since made similar comments about Wisconsin, saying the state did not help the company secure New Market Tax Credits, a federal program that provides low-cost financing to areas in need of redevelopment. Northern Wisconsin has some of the highest unemployment in the state.
Kestrel has not moved forward on its plans to build two construction plants in Superior, and has fallen behind on loan payments to WEDC, the quasi-private entity formed by Walker to help jump-start the state economy via tax breaks and other business subsidies.
WEDC and Kestrel have since worked out a deal where Kestrel won't pay anything until November, when it will begin interest-only payments for a year. After that, it will make equal interest and principal payments for 59 months, ending in October 2020, according to a Friday report from WisPolitics.com.