Superior Mayor Jim Paine issued the following statement Thursday in response to questions about Kestrel's financial problems:
- Kestrel Aircraft received a $2.6 million working capital loan in 2012 that is being administered by the City of Superior.
- The company also received 2 loans from WEDC, 1 loan from the Douglas County Revolving Loan Fund and was certified in January 2012 to receive up to $18 million in Enterprise Zone (EZ) Tax Credits from WEDC over 8 years, contingent upon meeting job creation, capital investment and employee training goals.
- WEDC, the City and the County made the investments in Kestrel in an effort to bring hundreds of much-needed jobs to northwestern Wisconsin. At the time of the awards, the unemployment rate in Douglas County was 7.9%. WEDC was aware that providing assistance to startup companies had risks but believed in supporting startups that had the potential to make a significant impact on the regional and state economy – including companies like Kestrel.
- Because of cash flow issues, which are not uncommon in startups, the company was unable to make its payments due to the city in October 2016 and now October 2017. The company is currently past due on its loans with the city in a combined amount of approximately $736,000. The current amount outstanding on this loan is $2,044,000.
- On November 15, 2016 – a Notice of Default and Request to Cure was sent to Kestrel Aircraft from the Redevelopment Authority of Superior.
- On December 9, 2016 – individuals from WEDC, WHEDA, the City of Superior and Douglas County met with representatives of Kestrel to receive an update on the company’s status and to attempt to develop a path forward for this project.
- Early in 2017, WEDC issued 2 notices of default on their loans.
- In May 2017, WEDC, Douglas County and the City of Superior entered into a forbearance agreement with Kestrel in which there was agreement to delay legal action against the company to again give it a chance to become current on payments. That agreement had an August 31st deadline.
- Due to Kestrel’s inability to show measurable progress towards obtaining financing, WEDC is now moving forward with legal action against the company. At this point, WEDC has not gone to court to recoup the funds but will pursue any and all remedies available to them. The City of Superior will confer with the City Council to determine future direction related to the Kestrel loan.