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Fri, May 25, 2007

Big Money Being Offered To Attract PiperJet Plant

Antes... Er, Bids... Reach $90 Million

Piper is searching for a home for its new PiperJet aircraft manufacturing plant, the accompanying 1500 jobs, and possibly its corporate headquarters.

Two Florida cities have unveiled details of incentive-laden proposals designed to entice the Vero Beach-based company to stay in-state... and they're quite serious about it. One plan has reportedly reached $90 million. New Mexico officials are now confirming the state's place as a bidder for the aircraft company, according to The Albuquerque Tribune.

"I will tell you that we are clearly very, very interested in Piper and we would be delighted if they were to choose New Mexico as a site for their facility," said Kelly O'Donnell, the state's acting secretary of economic development. "We feel we present a very competitive package, and clearly New Mexico is becoming increasingly desirable as a place to do business."

Piper spokesman Mark Miller confirmed Wednesday Albuquerque is one of the five cities that are on the short list for the site. A visit to Albuquerque by Piper officials for an assessment is scheduled Friday.

"We are continuing to explore our options," Miller said. "Albuquerque is part of our serious consideration for site selection."

Piper said it narrowed its list of potential sites last month down to five, but would only confirm its hometown of Vero Beach as one. Various media reports list Oklahoma City; Tallahassee, FL; and Columbia, SC as rounding out the short list.

As Florida's public records laws are a bit more rigorous than some, officials in Tallahassee and Indian River County, which includes Vero Beach, have disclosed details of their proposed incentive packages.

The Vero Beach proposal package tops out at $50 million and includes such incentives as purchasing Piper's existing facilities and leasing it back to the company and building a new facility for building the PiperJet, along with the impact fees associated with the construction and possibly a reduced utility rate, said Helene Caseltine, economic development director for the Indian River County Chamber of Commerce.

Caseltine said the Indian River County Board of Commissioners and the Vero Beach City Council have approved the plan in concept and a vote for final approval would happen only if the city is chosen by Piper.

"That's a ballpark figure," Caseltine said of the $50 million. "We're not going to release our entire package to the media. That would be silly. I don't want our competitors to know the details."

Tallahassee City Commission is scheduled to meet on Wednesday to consider an estimated $90 million proposal created by city economic development officials. The plan includes building a 593,000-square-foot manufacturing space and around 122,000 square feet of corporate office space.

That construction would cost about $65 million, with an additional $15-20 million to cover capitalized interest through 2013. Another $5 million would be used for airport improvements and Piper would provide lease payments over 30 years to cover the debt, according to the proposal.

Published reports in Florida indicate the state would also throw in another $20 million to keep Piper home. Enterprise Florida officials, the state's economic development arm, declined to confirm or deny those reports to the Tribune.

Oklahoma and South Carolina declined to comment on specific numbers to the Tribune, as did New Mexico.

Vero Beach City Manager Jim Gabbard was quoted in The (Vero Beach) Press Journal on Wednesday saying, "We know there are other proposals out there like the $70 million from Albuquerque."

O'Donnell wouldn't spill an exact value of what that state might offer. "However, the total value of the package, including tax abatements, could total $70 million over a number of years," O'Donnell said. "I'm not confirming nor denying, however I could see that our package, with everything included, could total that amount over a certain number of years."

O'Donnell went on to say the state of New Mexico has "an arsenal" of incentives it is authorized to offer including industrial revenue bonds, a program to provide reimbursement for certain training costs, and tax credits for providing high wage jobs and on the value of equipment they bring into the state.

Richard Aboulafia, an aviation analyst with the Teal Group, doesn't like New Mexico's history of directly investing in an aviation venture like Eclipse Aviation and the planned spaceport.

"There's a fine line between infrastructure and tax breaks and outright subsidies," Aboulafia said. "You have to watch that you're not giving away the store."

But, he said New Mexico's chance of outbidding its competitors was "very good."

"The New Mexican taxpayer is a remarkably generous creature," he said.

Vero Beach stands to lose the most should the vote not swing their way. Piper employs 1,029 people and is Indian River County's largest private employer, Caseltine said. It has been in Vero Beach since 1957.

An economic impact study released last month concluded that the company has a $518 million impact on the local community, Caseltine said.

"If Albuquerque or whoever loses out, they just move on to the next project. No big deal," Caseltine said. "If we lose out, it's devastating."

FMI: www.piper.com, www.cabq.gov, www.eflorida.com

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