PLATTSBURGH — Laurentian Aerospace Corp. has lined up the funding it needs for liftoff.
Laurentian Senior Vice President of Finance and Chief Financial Officer Andrew Edwards was in Plattsburgh Friday to deliver the news the region has been waiting for since 2006.
"Verdant Capital Group will invest, alongside the management group, the capital required to allow Laurentian to begin the project," Edwards said at a news conference held at the Plattsburgh-North Country Chamber of Commerce.
UP TO 900 JOBS
The $175 million project will supply state-of-the-art maintenance, repair and overhaul to wide-body aircraft at Plattsburgh International Airport.
About 900 good-paying jobs — the highest level mechanics can expect to earn $75,000 to $80,000 per year — are expected to be created within two years of construction completion.
The company looks to start out with 200 to 300 jobs. The exact number will be based on contracts with airlines and employee training.
The closing of financing is expected to take place on or before March 1. It is subject to a number of conditions, including Verdant's completion of final due diligence, updating and execution of agreement documentation.
Edwards cautioned that there is always a possibility of market volatility again affecting the plan, as it did in late 2007.
"I wouldn't be standing here today if I wasn't confident it would get done," Edwards said.
He said construction would then start about April 1. It is expected to take about 18 months.
'EMBRACED THE IDEA'
By phone later Friday, Laurentian Aerospace President and CEO Robin Wohnsigl said the company remains excited about the opportunity in Plattsburgh.
"I think all in all, it's a good story and good news, especially right before Christmas," he said.
The quality of the relationship with Verdant Capital has been impressive from the start, Wohnsigl said.
"When I first met these guys and they started talking, it was apparent they had an affinity for the North Country. They have embraced the idea to create a world-class MRO center."
Laurentian Aerospace announced plans in 2006 for a 273,000-square-foot, two-bay hangar to be built at Plattsburgh International Airport.
Workers at the hangar would perform specialized maintenance, repair and overhaul operations on large body aircraft such as 747s.
Each bay would feature a computer-operated laser-guided docking system capable of moving scaffoldings and work stations within one centimeter of the aircraft within 30 minutes of arrival.
That saves about one day on each end of the process; airlines lose about $200,000 for each day a plane is out of service.
Edwards said the docking system and their exclusive use of it will result in a critical competitive advantage for the company.
"We can get our system up in about half an hour, and others, it can take up to a day."
Edwards said the company has talked with all major airlines in North America and has had significant interest from almost all of them.
Company officials say Plattsburgh makes an ideal location because of its proximity to major North American airports in the Northeast and the weather.
"The number of flying days here is truly astonishing," Edwards said.
The only facilities with similar docking systems are in the Middle East. The time savings with the new docking system will allow Laurentian to compete with facilities where wages allow companies to charge less for the service, especially those in the Far East.
Rising fuel costs will provide another cost savings, as airlines won't now have to send jets overseas for service. Wohnsigl said it may even allow Laurentian Aerospace to compete for business with airlines based in Western Europe.
ROOM TO GROW
Edwards said the site has plenty of room for expansion, with room for two additional hangars if needed.
There is a possibility Laurentian Aerospace could seek military contracts, but for now it is focused on commercial aircraft.
Most of the project would be financed with tax-exempt bonds issued by the County of Clinton Industrial Development Agency. The company will also make payments in lieu of taxes to Clinton County.
Empire State Development North Country Regional Director Peter Wohl said it is a terrific day for Laurentian and the community. He said the community partners really rallied to help Laurentian Aerospace and that Empire State Development was pleased to help.
"We realized from the get-go the importance of this initiative and have stood by it throughout the process," Wohl said.
Empire State Development has approved funding to provide Laurentian Aerospace with a $12 million loan as a line of credit to replenish its startup reserve fund. It also approved a $4.1 million grant for construction capital expenditures in Phase 1 and a $2 million grant to Clinton County, sponsored by Sen. Betty Little.
Laurentian Aerospace officials initially expected to start construction in October 2006 and be in operation by April 2008.
The company has long had enough equity funding lined up for the project but had difficulty finding a lead investor to perform due diligence and insure other investors their money would be safe.
That task became more difficult after the financial crises that hit in 2008.
The project cost was initially estimated at $65 million. That price tag has risen steadily and now sits at the $175 million mark, but Edwards did not reveal how the cost would be broken up.
GIFT TO AREA
Plattsburgh-North Country Chamber of Commerce President Garry Douglas said it was great to see the project finally come together after a four-year journey through numerous peaks and valleys.
It is a tribute not only to the Laurentian Aerospace team, he said, but also the coalition or federal, state and local officials who worked to pull it off.
"I'm not sure if this is an early Christmas or a late Thanksgiving, or a combination of both."
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