Brunswick council initiates grant for Kestrel; councilor questions drone connection
BRUNSWICK — The town is being asked to help seal a deal to bring a major anchor tenant to Brunswick Naval Air Station.
On Monday, the Town Council initiated a $400,000 grant application on behalf of the Midcoast Regional Redevelopment Authority to help fund facility improvements for Kestrel Aircraft.
The start-up company is headed by Alan Klapmeier, the co-founder of Cirrus Design, who last week signed a six-month lease option with the redevelopment agency to develop, test and manufacture a prototype airplane, the Kestrel, at the soon-to-be-decommissioned Navy base.
MRRA and state officials say the $100 million project will create up to 300 jobs at what will be called Brunswick Landing after the base closes next May.
The company is expected to contribute $90 million toward the project through equity investment and debt. The state will assist by seeking $10 million in bonds for Kestrel, potentially through the Finance Authority of Maine and other entities with access to low-interest bond markets.
An additional $1.5 million is being sought to ready and upgrade Hangar 6 for Kestrel's operations. Included in that amount is a $400,000 Community Development Block Grant, which has to be applied for and authorized by the Town Council.
According to MRRA officials, the grant, plus another $200,000 development fund loan, will be used to purchase a paint booth and other equipment for Kestrel.
During a July 23 press conference in Augusta to announce the Kestrel deal, council Chairwoman Joanne King told state and local officials that the Town Council would do whatever it could to support the Kestrel project.
On Monday, that sentiment remained, but not before councilors asked for more information about the grant, including associated job-creation requirements.
Klapmeier and MRRA officials have said Kestrel hopes to hire 50 to 70 engineers as soon as the company moves to Hangar 6. It hopes to reach 300 workers when the airplane goes into production, which Klapmeier last week hinted could take up to three years.
During the meeting, Vice Chairwoman Debbie Atwood echoed concerns from constituents about the deal. Atwood is a member of PeaceWorks of Greater Brunswick, an organization that has previously opposed development of aerial drones at BNAS.
Cirrus Design, the company Klapmeier co-founded in 1984 with his brother Dale, in 1996 was one of 100 subcontractors involved in the development of the U.S. Army Outrider drone. A 1998 story in the Minneapolis Star Tribune reported Cirrus produced the Outrider's airframe.
The Department of Defense cancelled the Outrider program in 1999, following engine issues and a critical report by the U.S. Government Accountability Office.
On Tuesday, Atwood said she found Klapmeier both charismatic and inspiring. However, she wanted assurances that Kestrel won't participate in drone development.
"By all accounts, (Klapmeier) is highly thought of and I genuinely hope to be able to support this venture," she said, adding that she didn't find fault with airplane manufacturers who participated in drone production because "that's where the money is."
Such an assurance is unlikely, she said, but without it she would be hesitant to support the grant request.
"I don't expect some big victory out of this," Atwood said. "I expect people will be very upset by my position, and in some ways I feel bad for darkening this very bright cloud."
On Monday, she pressed town and MRRA officials for more information about Kestrel's grant application, which unlike a separate $300,000 CDBG request for Maine Tool & Machine, did not contain specific uses for the funding.
MRRA Executive Director Steve Levesque said Tuesday that the agency omitted the details because they are yet to be hashed out.
"We just had to get in before the (Aug. 31) deadline," Levesque said. "We are scrambling to pull this together. More details are coming."
The agency also released lease terms with Kestrel immediately following MRRA's unanimous vote to enter the deal. Initially, the company will sign a six-month lease option, after which a 10-year lease will go into effect.
At $2 per square foot – the market rate for hangar space according to Levesque – Kestrel will pay $186,000 per year to lease 93,000 square feet of Hangar 6. The cost could increase if Kestrel expands to occupy all of the 174,000-square-foot facility.
The agreement also requires Kestrel to work with Southern Maine Community College and the state to create specific training programs for new employees. SMCC and the University of Maine's engineering school will have a campus at BNAS designed to tailor curriculum to needs of incoming companies.
The council will also consider the $300,000 CDBG for Maine Tool & Machine, which is moving from Industry Road to the base.
Last year, the council approved a $50,000 grant for the company to relocate to the Brunswick Commerce Center on Old Portland Road, but the company has since reconsidered. According to grant documents, the funding will allow Maine Tool & Machine to expand and extend three-phase power while adding 10 employees.
In other business, the council voted unanimously to authorize the purchase of three emergency vehicles for the Brunswick Fire Department. The expenditure, outlined in the town's Capital Improvement Program, is set to for $105,000.
Steve Mistler can be reached at 373-9060 ext. 123 or email@example.com