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Business North - The Daily Briefing - Business Newspaper Online
Superior bidding to land airplane manufacturing plant
Superior is bidding to join Duluth in the aircraft manufacturing business.
The city has been working with Maine-based Kestrel Aircraft Co. for months to land some aspect of the company’s plan to manufacture turbo-prop airplanes. The concept first arose in June, when Kestrel officials held an open house for their engineering office, which is located in Duluth’s Lincoln Park neighborhood. In talking with Kestrel chairman and CEO Alan Klapmeier, they learned he might be interested in a Twin Ports manufacturing site.
Klapmeier and his brother Dale co-founded Cirrus Design. Alan left Cirrus in 2009 for undisclosed reasons.
Kestrel was launched in July 2010 in a merger with United Kingdom-based Farnborough Aircraft Corporation Ltd., which had already developed a prototype. Its headquarters is in Brunswick, Me., where it has a 10-year lease on 93,000-square-feet of hanger space at the former Naval Air Station. It’s unclear what aspect of manufacturing would occur in Maine versus Superior. In an Oct. 20 story, however, The Reader Weekly reported the Maine facility might be used for a separate Kestrel division that will refurbish aircraft made by other firms.
State and local officials, including Mayor Bruce Hagen and Gov. Scott Walker, have acknowledged the negotiations for months but declined to address them publicly. They reportedly involve up to $100 million in financing or tax credits that would be issued by the Wisconsin Economic Development Corp. Last week, Kestrel spokeswoman Kate Dougherty also acknowledged the negotiations but said the company would not comment further until economic developers take formal action. She formerly was Cirrus' director of public relations.
A person close to the negotiations said a Superior development, if it occurs, would be in the city’s new industrial park north of AMSOIL Inc. A key negotiator for the city is Jim Caesar, former interim director of The Development Association. When the association named Michelle Hostetler its permanent director in August, Hagen hired Caesar to continue pursuing Kestrel.
The Reader Weekly reported another site might be under consideration – the Douglas County Fairgrounds site adjacent to the city's municipal airport. Over time, the size of the Head of the Lakes Fair has gradually declined, along with resources available to maintain structures on the site.
According to the Kestrel web site, Alan Klapmeier was responsible for the certification of the Cirrus SR 20 in 1998 and, two years later, the Cirrus SR 22.
Farnborough was founded in 1998 to develop a six-seat air taxi, said Adrian Norris, who was director of business development at Farnborough Aircraft and now sits on the Kestrel board. The Kestrel JP-10, he explaines in an Aero-TV video, evolved from the amateur-built Epic LT. It can fly at about 25,000 feet. About $20 million was invested in developing the aircraft, with total costs expected to reach about $100 million, according to the aviation magazine “Flying.” The aircraft is expected to fly at 300 knots and sell for about $2.8 million.
The product Kestrel intends to manufacture is somewhat larger than current models offered by Cirrus but similar in size to the Duluth company’s proposed SJ-50 lightweight personal jet, which Alan Klapmeier was in the midst of developing when he departed Cirrus in 2009. He and Ed Underwood sought unsuccessfully to obtain development rights to that design. Underwood, a retired executive director of Arcapita, the Bahrain-based firm that had invested in Cirrus before its sale to the China-based CAIGA, now is on Alan Klapmeier’s management team at Kestrel.
Depending on configuration, the carbon-fiber Kestrel seats from six to eight persons versus four in the Cirrus SR20 and SR22 models and seven in the SJ-50, which is not yet certified. It’s also powered by a turboprop engine versus gas internal combustion engines currently used in the smaller Cirrus airplanes.
Klapmeier told Aero-TV the JP-10 has several advantages over lightweight jets. It will carry more weight, have a longer range and get in and out of shorter runways, he said. Eventually, it will be part of a family of airplanes allowing the company to spread out its costs among several products.
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