Superior lands Kestrel

Kestrel Aircraft Company wants to revolutionize general aviation, and what better place to do it than a place called Superior.

Hundreds filled a hangar at the Richard I. Bong Memorial Airport on Monday as Gov. Scott Walker joined Kestrel Chief Executive Officer Alan Klapmeier for the historic announcement.

The company plans to invest about $120 million in Superior and create 600 jobs.

Not since World War II has this number of jobs been created in Superior, said Dave Minor, Chamber president and chief executive officer.

The announcement came just shy of six months after the city began talking to company officials about locating in Superior. Those talks started July 19.

“Alan Klapmeier and his Kestrel team have a vision for their company, and I am delighted that they have decided to land their vision here in Superior,” Mayor Bruce Hagen said.

Kestrel Aircraft Company plans to build its K-350, a turboprop, carbon composite airplane that seats six to eight with performance standards designed for comfort, safety, versatility and convenience.

“There were a number of locations that would have worked from a business standpoint,” Klapmeier said after the official announcement Monday. “It was really just a matter of working with the different communities and getting together the package that was necessary.”

That package includes the use and creation of $3.1 million in tax increment financing and a $2.4 million low-interest loan through the city of Superior, and the transfer or county owned land adjacent to the Bong Airport and a $500,000 loan through the Douglas County Revolving Loan Fund.

The Superior City Council approved, in concept, $2.66 million in bonding for the loan Tuesday; a final decision to issue the bonds is expected Feb. 7.

The state plans to kick in another $30 million in New Market Tax credits in 2012, $60 million in future New Market credits, plus a $2 million loan through the state’s Small Business Credit Initiative Program through Wisconsin Housing and Economic Development Authority.

Klapmeier said he expects the $90 million New Market credits, which are sold to investors, will create about $28 million in capital for the $120 million project.

Wisconsin Economic Development Corporation, the public-private corporation that replaced the Wisconsin Department of Commerce added $18 million in Enterprise Zone Tax Credits and a $2 million economic development loan to the pot.

Walker said creating of the economic development corporation created an opportunity for the state to “move at the speed of business” rather than the speed of government, helping to facilitate Monday’s announcement.

“Following meetings with Mayor Hagen and the Wisconsin Economic Development Corporation, I was confident that we were well-situated to secure Kestrel’s business,” said state Rep. Nick Milroy, D-South Range.

In the current economic climate, Klapmeier said, putting together a project like this has been difficult.

“This has been incredibly slow and painful process putting together this deal,” said Klapmeier, founder of the Duluth-based Cirrus; he was brought onboard by the Farnborough Aircraft Corporation Ltd. to bring the prototype for the K-350 to production, launching Kestrel Aircraft Company in July 2010.

“We’ve been talking to a number of locations and got done here first and it worked out well for us and obviously, the community,” Klapmeier said.

Monday afternoon, the project cleared its first local hurdle when the city’s Redevelopment Authority unanimously approved two agreements needed to make land available for the facilities to manufacture and assemble the aircraft.

The company plans to build about a 35,000-square-foot facility in the Winter Street Industrial Park where the plane’s composite materials will be manufactured. Another 50,000-square-foot facility near the airport will serve as the company’s headquarters and assembly plant, Serck said.

“I’ve worked at the fire department at the airbase for 25 years,” said Redevelopment Authority member Kevin Norbie. “I saw the initial construction of Cirrus from the initial concept to the additions, acquiring buildings and product lines … I saw the evolution of it and I think it’s wonderful that you’ve decided to come to Superior.”

Klapmeier, founder and former CEO of Cirrus, said he learned a lot from that project, and plans to do it better with Kestrel Aircraft Company.

The council unanimously approved the agreements adopted by the Redevelopment Authority Tuesday night, leaving the final decision in the hands of the Douglas County Board. The board considers a cooperation agreement with the Redevelopment Authority to transfer 13.3 acres of land on the northernmost area of the fairgrounds. The agreement received unanimous approval from the county’s Land and Development Committee last week.

Port and Planning Director Jason Serck, who met with the county board in closed session to discuss the project last month, said support among board members was nearly unanimous then, before Kestrel made a decision.

The property, which will net the county $250,000 initially, and another $250,000 by the end of 2014, can transfer only to Kestrel, according the agreement.

A task force created to consider the future of the fairgrounds in Superior recommended almost two years ago the county either invest in the property or sell it for economic development.

Construction on the first facility in the Winter Street Industrial Park is expected to get underway in June and be near completion by the end of the year; the transfer of fairgrounds property is expected in 2013, but the county expects to retain access to the facility’s structures through a license agreement. Construction on the airport facilities is expected to begin next year in the northeast corner nearest the airport.

“This is a great opportunity for us today,” Walker said Monday. “We’re talking about 600 jobs in a community that obviously this part of the state needs jobs … so the fact that it’s right here in Superior is even more special.”

It was the single largest number of jobs created since the governor took office. The closest was 469 jobs announced in Sturdevant, Wis., a couple of months ago, Walker said.

“This hopefully is the first of many steps to adding many new jobs,” Walker said.

While the company plans to create 600 new jobs by 2016, the governor said it creates opportunity for support businesses and additional jobs to be created in the future.

“This project is the perfect fit for our community,” said state Sen. Bob Jauch, D-Poplar. “We have loyal and hardworking employees, a superb educational system and have community leaders with a can do attitude who are dedicated to the same level of excellence that Mr. Klapmeier has established in the aircraft industry.”

In the end, it was the work of the Douglas County development team — officials with Superior and Douglas County, Superior Business Improvement District, Development Association, Chamber of Superior-Douglas County and Jim Caesar, an economic development consultant — that made the project possible because team members “were always able to keep the ball moving forward,” Klapmeier said.

Council President Dan Olson said Monday’s announcement has created a buzz wherever he goes, and has even prompted a couple of businesses he’s seen put “Welcome Kestrel” signs on their marquees.

“This is great news, beyond what you can believe, in this community,” Olson said.

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