Colorado community to vote on Extra plant

October 12, 2010

extra

County leaders in Montrose, Colo., are set to vote Oct. 13 on whether to approve an assembly plant for Extra’s EA500 single-engine turboprop aircraft. The six-seat composite aircraft is made in Germany by Extra, already known for high-performance composite aerobatic aircraft. Several dealers have ordered demonstrators.

A political debate erupted over a plan to give Extra land from the Montrose Economic Development Corp. (MEDC), and then have the county buy the land from Extra to provide capital to Extra for development of the plant. It all comes to a head Oct. 13 when a public hearing, one moved to a local fairgrounds building to handle the expected crowd, could end with a yea or nay vote.

Airframe components are to be assembled in Germany while other parts, such as landing gear, are to be shipped directly to Colorado by suppliers. Members of the public said there are already parcels of land at or near the airport available for purchase, without the county having to purchase additional land. Differences also arose about whether the appraisal of the land was $675,000 or $2.3 million and whether the county could legally pay more than a correct appraisal. If the lower amount were determined to be the accurate appraisal, would Extra still have enough money for the project?

In the middle of the debate, a private company hired by the county—BoydGroup International— issued a report raising concerns that Extra had not contributed enough to the venture and suggesting there is no proof the airplane will succeed on the market. Extra will provide $3 million worth of tooling plus the deposits received from four dealers and customers for the project. Extra Aircraft (United States) CEO Ken Keith, said his main concern is the impact the report could have on his customers.

“Our customers need to know we are committed to the project,” he said. “We will build the airplane in the United States. Buyers need to know we are here to stay.” He added that he would “…hate to start the process over,” but he has seven interested communities. Some of the communities came forth after, and as a result of, the BoydGroup’s report listing risks to the county associated with the project. Keith told the BoydGroup, which interviewed him while preparing the report, that the plant could potentially employ 200 workers.

In his rebuttal at the end of the report, he said the report fails to recognize the contribution of Extra through tooling to be shipped to the United States from Germany and the deposit money from the five orders now on the books. Twelve aircraft are to be produced the first year. The aircraft costs $1.65 million. Extra’s contribution, rather than negligible as reported by the BoydGroup, is closer to $8 million, Keith said.

Now there is a restructured proposal coming from the county and economic leaders that could mute the concerns raised by the BoydGroup, Keith said. He was not at liberty to discuss the new proposal. The report will not go away quietly, however. Officials at BoydGroup said they are preparing a rebuttal to Keith’s rebuttal, one that will likely come out during the Oct. 13 hearing.