October 09, 2017 10:15 PM
Monday, Kestrel confirmed they will be closing their operations at the Brunswick Executive Airport in Maine. The aviation company has been kicked out of its Maine facility for missing rent payments, but will that have any effect on the Superior facility? Superior's Mayor says no.
Mayor Jim Paine called the news out of Maine "disappointing," but says the city still hopes for a manufacturing facility to be built in Superior.
Back in 2012, Kestrel announced plans to establish its manufacturing and headquarters in Superior and create 600 new jobs, but that has yet to happen.
"The citizens of Superior took a risk on Kestrel to the tune of about $2.2 million," said Paine.
Paine said Kestrel borrowed money from the city and the Douglas County Revolving Loan Fund -- which needs to be repaid before moving forward.
"Our immediate interest here is the local money. That was an actual loan which is outstanding. In the early stages of that loan, they were paying it back. They have missed some payments," added Paine.
They also had a development agreement with some state agencies.
A statement to Eyewitness News from the Wisconsin Economic Development Corporation said,
"They are in default of their loans, haven't made a payment in nearly a year. We are pursuing legal action against the company."
As for the Superior facility, Paine says the Maine closure will not affect it.
"I don't think it has a lot of bearing on our situation here in Superior. I know that Kestrel is still trying to move forward to make an airplane and to be a viable company, and of course that is in our interest in the City of Superior," said Paine.
The facility located on Tower Avenue is mainly office space right now and employs about 25 people. The Mayor said they still have high hopes to expand in Superior.
"The big hope is that they build a manufacturing facility in Superior. We don't know how realistic that is right now," Paine added.
This summer, they entered into a forbearance agreement -- which is now about to expire.
"Our first and most pressing concern is being repaid the money," said Paine. "And if Kestrel doesn't pay it back, the citizens of Superior have to pay that back."
Construction of a manufacturing plant was supposed to be built near the Richard I. Bong Airport. In previous years, Kestrel said financing delays were affecting the project.
A spokesperson with Kestrel did confirm the Maine closure. She said they'll continue with their current, reduced staff at a new location. Kestrel said the closure will have no direct affect on other Kestrel operations.
The company did not comment on it's loan repayment plan for Superior.
Updated: October 09, 2017 10:15 PM
Created: October 09, 2017 05:37 PM
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