Possible funding source ID'd for Kestrel in Maine

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BRUNSWICK — Although Maine officials say they are working to find additional funding for Kestrel Aircraft, the company’s chief executive said there’s nothing new to report in the week since he revealed some or all of the company’s planned Brunswick’s operations could end up in New Hampshire.

Kestrel CEO Alan Klapmeier said he is still considering building composites in Berlin, N.H., where the company could take advantage of inexpensive electricity and heat from a nearby biomass boiler.

State Sen. Stan Gerzofsky, D-Brunswick, said he hopes that won’t be necessary if a new source of federal funding that offers permanent resident status to foreign investors and their families comes through.

George Gervais, commissioner of the Maine Department of Economic and Community Development, announced Tuesday that the program will soon start in Franklin County to bring investment to the skiing, tourism, and wood products industries.

Gerzofsky said the application could be amended to add aviation or aeronautic uses to the targeted industries, which would help lure investors to Kestrel – if it decides to build composites in Franklin County.

Steve Levesque, executive director of the Midcoast Regional Redevelopment Authority, said the plan is still in its early stages.

“We’re still exploring this, there’s no deal that’s been struck at all,” he said.

Although the EB-5 Immigrant Investor Program opens the door to foreign investment, it does not guarantee it, he said.

Because of that, MRRA is pursuing other ways to help Kestrel get the money it needs to keep as much of its business in Maine as possible.

One of Kestrel’s main sources of funding, the federal New Markets Tax Credit Program, didn’t provide as much capital as the company had hoped – only $20 million of its $100 million project was designated under the program, yielding $7.8 million in tax credits.

Coastal Enterprises, the Wiscasset-based private, nonprofit community development institution that facilitated Kestrel’s first round of tax credits, is unable to provide any more until at least January, when the firm receives another installment from the U.S. Treasury.

Even then, CEI Capital Management’s chief executive officer, Charlie Spies, said the program is so competitive he’s not sure how much more the company will be able to allocate to Kestrel.

Now MRRA has applied to become a New Market tax credit allocator with the hope that it could funnel further credits to the aircraft company. Levesque said he expects to hear back from the Treasury in January.

The flurry of media attention generated by Kestrel’s consideration of Berlin for a composites factory has undoubtedly worked in the company’s favor.

Gerzofsky said he’s had multiple meetings with Gervais about Kestrel, and Levesque held a meeting at MRRA on Tuesday to discuss possible funding sources for the company.

Gervais did not respond to several phone calls and an email seeking comment this week. Adrienne Bennett, Gov. Paul LePage’s spokeswoman, said neither Gervais nor LePage would provide any details at this time.

The activity has some people wondering if Klapmeier’s decision to speak with reporters about Kestrel’s consideration of Berlin for a plant was a ploy.

“We all want to see down the road how real this was,” Gerzofsky said. “Right now we’re in the crisis so we don’t worry about it.”

But Klapmeier said he would never pit one state against another for financial gain. He noted that the company did not announce its situation, but simply responded to questions from a reporter who discovered Kestrel was considering Berlin.

“If nobody had asked, would we have gone public? No,” he said.

Levesque said he didn’t think Kestrel would play one state against the other, since he knew for months that the company was struggling to secure public financing through the New Markets program. Although he said he was surprised when he heard Kestrel was considering Berlin, “the newspaper articles didn’t spur the issue of trying to help them grow,” he said.

If anyone gets shorted by the renewed push to keep all parts of the company in Maine, it might be Berlin, whose city manager, Patrick MacQueen, described the place as “the bottom of the barrel” in terms of high unemployment and poverty.

MacQueen said he hadn’t heard anything about the potential Kestrel deal before being approached by a reporter a few weeks ago, and hadn’t spoken with a representative from the company. But he said a composites plant would be a real lifeline for the area.

“Boy,” he said, “would we give our eye teeth for anything like that.”

Emily Guerin can be reached at 781-3661 ext.123 or eguerin@theforecaster.net. Follow her on Twitter: @guerinemily.

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