Kestrel Aircraft could co-locate facility at Berlin Station site


October 20, 2011
BERLIN — Discussions continue between the Kestrel Aircraft Company and Cate Street Capital that could result in the start-up becoming the first manufacturing enterprise to co-locate near Berlin Station on the site of the former Burgess pulp mill. The company is now headquartered in Brunswick, Me., at the former Naval Air Station, with its design work in Duluth, Minn.

It is not a done deal, however. Other communities in both the U. S. and Canada are still energetically courting Kestrel Aircraft, however, reported David Cohan of PeaksCo, LLC, of Peaks Island, Me., who specializes in the New Markets Tax Credit program in a Monday phone interview.

"I'm optimistic that this will go forward," said John Halle, CEO-president of Cate Street Capital of Portsmouth, in a Sunday evening telephone conversation. Halle and his Cate Street team own the former mill site on the east side of the Androscoggin River and successfully put together the financial and logistical package that resulted in the Oct. 6 groundbreaking ceremony, kicking off construction of a $275 million 75-megawatt biomass plant, with an estimated 25-month completion date.

"Berlin has the assets that Kestrel needs," Halle pointed out. Assets include: hot water and the capability to make steam; at-cost electricity without any demand charge; a workforce with manufacturing skills that are used to paying attention to detail and have an excellent work ethic; White Mountains Community College that could provide a specialized training center devoted to developing composite fabrication skills; a mile-long municipally-owned airport; access to the New Markets Tax Credits (NMTC) program; and a city whose population — including its political and civic leadership — is eager to diversify its property tax and employment base and to continue to reverse its downward spiral.

Alan Klapmeier, the founder of Cirrus Design Corp. of Duluth, Minn., who built a record of success and a worldwide reputation as both an aviation visionary and a practical entrepreneur, launched Kestrel Aircraft in 2010 and serves as its CEO and chairman. Edward "Ed" Underwood serves at Kestrel's Chief Financial Officer (CFO).

Both these men flew into the Berlin airport on Tuesday, Sept. 20, and met with Halle and his project manager Alexandra Ritchie in the scale house of the former pulp mill. Also on hand were N. H. Department of Resources and Economic Development (DRED) Commissioner George Bald, state Sen. John Gallus, and Mayor Paul Grenier, plus Cohan. Klapmeier and Underwood used a PowerPoint presentation on their laptop to outline the airplane's key attributes.

Since then, Gov. John Lynch, Commissioner Bald, and Jack Donovan of the N.H. Business Finance Authority have aggressively sought to provide assistance to lure Kestrel to the North Country, Cohan said. Berlin and Cos County qualify for the NMTC program, which is designed for rural counties with a population of less than 50,000 and a high level of economic distress. Berlin Station qualified for the NMTC program, and a second venture has great appeal, Cohan explained.

The Kestrel is a carbon-fiber single-engine turboprop aircraft designed for performance, passenger comfort, and the pilot's ease of operation. Kestrel seeks to tap what the two men described as a growing market for an airplane that is particularly well-suited for long-distance business and personal travel in and out of short-runway airports, both in this country and abroad.

Kestrel (www.kestrel.aero) selected a Honeywell engine in July to power the all-composite turboprop plane that is based on original work done by Farnborough Aircraft. The latest technologies will be used to outfit the six- to eight-passenger seat plane.

The Federal Aviation Administration (FAA) certifies all aircraft, and the Kestrel is designed to meet all federal standards. Klapmeier explained that a major plus is that the federal agency is both straightforward and transparent. This means, he said, that designers and manufacturers know what standards must be met and what is expected, he said.

Some existing leased space would likely be used at first. Later a custom-built structure would be constructed on the spacious mill site, zoned industrial, to take advantage of the low-cost electricity and hot water.

In addition, Halle said, suppliers over time would also be attracted to the Androscoggin Valley in order to be close to what he expects will be a highly successful company.

"This was the experience in Duluth where Cirrus Design Corp. is located," explained Halle, adding that in that city a number of former papermakers were also able to transfer their skills to manufacturing airplanes.

Cohan explained that the company could decide to split its operations, locating its composite fabrication facilities in one place and its final assembly, testing, and pilot training facilities in another.

The entire operation would likely employ some 400 people.

The manufacturing part of the enterprise would call for highly skilled high-tech workers will make the composite parts in molds that must then be heated under pressure to dry.

The Kestrel website touts the turboprop's design features.

"The Kestrel is an impressive aircraft, whether you're flying 100 miles or across half the continent," the website description reads. "Based on a proof-of-concept airplane that has been flying for several years, Kestrel Aircraft turns a new page in turboprop performance, utility and value. Kestrel's design philosophy reflects just the type of fresh and meticulous thinking brought to the program by CEO Alan Klapmeier and his design and engineering teams.

"The six- to eight-seat Kestrel will fit your mission business or pleasure. With its broad performance envelope, pilots and passengers will enjoy an impressively short climb time to cruise altitude at maximum weight, enroute speeds comparable to similar-sized jets, and then the ability to slow comfortably to speeds that blend easily with others in the terminal area. This single-engine composite turboprop will consume less fuel and fly more efficiently than a jet, and will carry more payload, flying higher and faster than any production piston airplane, single or twin. Roomy yet compact, the Kestrel will fly into and out of smaller airports with shorter runways, while carrying more.

"The turboprop Kestrel will also be an easy transition for pilots of turbine and piston aircraft," the website reads. "Since it's not a jet, no type rating or FAA checkride is needed. And to pilots stepping up from high-performance piston airplanes, the Kestrel is designed to be accessible and easy to fly. Fact is, turbines are not more difficult to operate, and with proper training piston pilots will readily adapt to the relative simplicity of the Honeywell engine and new levels of performance and capability."

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