Superior City Council Pays Off $2.66 Million Kestrel Loan
Sometimes you need to move forward. One of those forward-looking steps for the Superior City Council was to pay off the $2.66 million bond that they had secured on behalf of Kestrel Aircraft Company in 2012 - when the company was trying to build a manufacturing plant in the city; that deal dissolved when the company's leadership had a dispute with the State of Wisconsin. The move to pay off the bond was approved by the Superior City Council at their meeting on March 2.
The plans for Kestrel Aircraft and Superior were large in scope. Details released by the Superior Telegram show that there had been a promise of "600 jobs" at a plant where Kestrel would build its K-350 model - a "turboprop, carbon composite airplane". Kestrel had been making payments on the $2.66 million bond it had secured until October 2015. Since that time, the company has been in default on the loan.
Since the default, the City of Superior picked up the financial-slack for the company. The Telegram explains how the city has been "repaying the bond at a cost of about $365,000 annually using money normally set aside for capital projects such as sidewalk, street, and park improvements". This decision by the City Council will have the municipality paying off the balance of the loan about "one year early".
Superior Mayor Jim Paine sees the move as a positive step in the forward direction. "This is, I think, kind of a big moment. This will have us paying off the Kestrel loan early. It will end our business with Kestrel".
Superior's involvement in the finances of the bond started in 2018 when it entered into an agreement with the Douglas County Revolving Loan Fund and Wisconsin Economic Development Corporation in an effort to recoup the money from Kestrel. Meanwhile, ONE Aviation - a company created by the merger of Kestrel Aircraft and Eclipse Aircraft ended up filing for bankruptcy. Even after that bankruptcy, the City of Superior was held responsible for repaying the funds owed on the bonds it had taken out on the company's behalf.