Superior pays off $2.6M Kestrel Aircraft loan early
Superior was still responsible for repaying the bonds it had taken out on the company’s behalf after the company filed for bankruptcy.
The Superior City Council closed the chapter on Kestrel Aircraft Company on Tuesday, March 2.
The company had hoped to revolutionize the general aviation industry by building its K-350 — a turboprop, carbon composite airplane — in Superior, creating 600 jobs. Kestrel announced it would be building its manufacturing facilities in Superior in 2012. They were never built.
The project died in a dispute between the company’s founder, Alan Klapmeier, and the state of Wisconsin.
Councilors approved paying off the $2.66 million bond the city secured on the company’s behalf one year early.
“This is, I think, kind of a big moment,” Mayor Jim Paine said. “This will have us paying off the Kestrel loan early. It will end our business with Kestrel.”
Kestrel Aircraft defaulted on its loan payments to Superior in 2016; the last payment was received in October 2015.
Ever since, the city has been repaying the bond at a cost of about $365,000 annually using money normally set aside for capital projects such as sidewalk, street and park improvements.
The city joined the Douglas County Revolving Loan Fund and Wisconsin Economic Development Corporation — both of which held loans Kestrel defaulted on — in an effort to recoup the money in 2018. The revolving loan fund board had approved a loan for $500,000 and WEDC offered a $2 million loan.
ONE Aviation, created by a merger between Kestrel Aircraft and Eclipse Aerospace, filed for bankruptcy, ending any chances the city, county and state would be repaid.
Superior was still responsible for repaying the bonds it had taken out on the company’s behalf.