A major business deal that promised to bring millions of dollars, and hundreds of jobs to Superior, might now be in jeopardy.
The Wisconsin Economic Development Corporation (WEDC) has announced they will take legal action against Kestrel, an airline manufacturer, for unpaid loans.
In 2012 Kestrel received $4 million of loans from the WEDC, as well as $18 million in Enterprise Zone Tax Credits.
That money was to be used to create an aircraft manufacturing plant in Superior, and promised to bring nearly 700 jobs, $46 million in capital investments, and $5 million in employee training through 2019.
Five years later there is no manufacturing plant, no manufacturing jobs, and WEDC says Kestrel hasn't made any payments on their loans in the past 11 months.
WEDC says Kestrel began running into payment problems in 2013 and 2014 when they were unable to make regular loan payments on their two loans.
At that time WEDC says they modified the loan, and deferred all of Kestrel's payments until November first, and Kestrel would only be responsible to make interest payments until that time.
Under the amended loan agreement, WEDC says Kestrel would pay the rest of the loan off by October first of 2020.
WEDC says, since November 2014, Kestrel has paid nearly $900,000 of interest and principal. However, WEDC says a payment has not been made since November 15th 2016, and they owe combined payments on the two loans of nearly $650,000. It was around that time, a default notice was given.
In February of this year, Kestrel was given 30 days by WEDC to remove the default by making a $180,000 payment. WEDC says that payment wasn't made, and the loan was defaulted on.
WEDC gave Kestrel an August 31st deadline on a forbearance agreement, to delay legal action and give them time to get current on their loans, but WEDC says they deadline was missed.
In a statement, WEDC says, at this time, they have not gone to court to recoup the investment, but will pursue any and all options to protect the states investment.
On Monday, Kestrel announced the closure of their operations at Brunswick airport in Maine.
Phone calls and emails to Kestrel were not returned.