The Upper City Council closed the chapter on Kestrel Aircraft Company on Tuesday, March 2.
The company had hoped to revolutionize the general aviation industry by building its K-350 – a carbon composite turboprop aircraft – at Superior, creating 600 jobs. Kestrel announced that it would build its manufacturing facility in Superior in 2012. They were never built.
The project died in a dispute between company founder Alan Klapmeier and the state of Wisconsin.
Councilors approved repayment of the $ 2.66 million bond the city obtained on behalf of the company a year earlier.
“It’s, I think, kind of a big moment,” said Mayor Jim Paine. “This will allow us to pay off the Kestrel loan sooner. This will end our business with Kestrel.
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Kestrel Aircraft defaulted on its loan payments to Superior in 2016; the last payment was received in October 2015.
The city has since repaid the bond at a cost of approximately $ 365,000 per year using the money normally set aside for capital projects such as improving sidewalks, streets and parks.
The city joined the Douglas County Revolving Loan Fund and the Wisconsin Economic Development Corporation – both of which held loans that Kestrel defaulted on – in a bid to recover the money in 2018. The revolving credit fund board had approved a loan of $ 500,000 and WEDC offered a $ 2 million loan.
ONE Aviation, created by a merger between Kestrel Aircraft and Eclipse Aerospace, filed for bankruptcy, ending all chances of reimbursement for the city, county and state.
Superior was still responsible for the repayment of the bonds it had entered into on behalf of the company.