Posted at: 05/06/2014 7:08 PM
Updated at: 05/06/2014 10:40 PM
Securing the funding to build their project in Superior has been slower than expected for Kestrel Aircraft, but they are working with the state to change the structure of their loans, according to the company's CEO.
Kestrel CEO Alan Klapmeier said delays in financing are affecting the project.
"We're obviously still very excited about the program. We've made a lot of progress on the design, what we expect to build, what we expect to do with the FAA, but there are other frustrations. Certainly financing the project has been slower than we had hoped and expected," said Klapmeier.
He said, in terms of the design, they're still in the engineering phase.
Kestrel did secure public funding by taking out two $2 million loans with the Wisconsin Economic Development Corporation, a state agency.
WEDC CEO Reed Hall said Kestrel's payments are $6,600 monthly, but Hall said after a visit to Superior in January, he was convinced Kestrel needs more time to make their payments.
"There's no reason for us to force the company to pay something they've told us they cannot pay. We want to preserve the company, we want to make sure the company is successful in the long term," said Hall.
Hall said WEDC and Kestrel have agreed upon new terms, but haven't signed on the dotted line yet. When they do, Hall said payments will be deferred until November 2014.
Klapmeier said they've been working on this agreement with the WEDC for months, but they are finally close to signing the agreement.
The delay in financing has also impacted hiring. Last January, the company had 65 employees in Superior. Klapmeier said they are not hiring right now and have had to reduce, but he declined to say how much.