OXFORD – The town of Sanford will hold a public meeting Tuesday on an application by Oxford Aviation for a $400,000 community development block grant to expand its business.

According to a notice issued by the town, the loan is part of an $800,000 public/private investment at the Sanford Regional Airport to create a new division focusing exclusively on refurbishing tractor-trailer trucks and 14 new jobs.

“Maybe that’s a good training tool for people who will eventually paint million-dollar airplanes,” said Evan McDougal, Sanford’s airport manager.

Oxford Aviation recently clashed with Oxford County commissioners over the same issue. Oxford Aviation rents space at the Oxford County Regional Airport in Oxford from the county.

The county issued a notice of default to Jim Horowitz, president of Oxford Aviation, on July 13 after learning that he was refurbishing trucks at the airport. According to the terms of Oxford Aviation’s lease, it may engage in secondary uses at the airport provided the primary use of the premises is related to aviation in all cases.

The notice of default threatens to terminate the county’s lease with Oxford Aviation if it does not cease work on the vehicles within 90 days of its receipt.

Steve Merrill, chairman of the county commissioners, said the truck refurbishing work violates the lease and threatens to halt funding to the airport from the Federal Aviation Administration.

Merrill was uncertain whether a refurbishing business at the Sanford airport would threaten its federal funds.

“I think that’s something he needs to check in on,” Merrill said. “That might be a real issue of concern.”

McDougal said Sanford raised about $1 million to get a matching Economic Development Activity grant in December. This grant prepared the site of a 68,000-square-foot building at the Sanford airport to be used by Oxford Aviation.

McDougal said the negotiated lease between Oxford Aviation and the airport allows up to 10 percent of the building’s floor space to be used for nonaviation purposes.

According to Oxford Aviation’s Web site, the building at Sanford Regional Airport will be the home of the Sanford Jet Division, which will be equipped to refurbish larger aircraft. The project is estimated to cost $7 million and create 200 jobs. A groundbreaking ceremony was held in November, and the building is expected to be completed in December.

Although the Web site states that the company will move its corporate headquarters to the building at Sanford, the company will remain at the Oxford airport.

Merrill and McDougal both said that Horowitz had not expressed any interest in moving the refurbishing activities at Oxford to Sanford. The Oxford Aviation Web site states that the Oxford facility, as well as the fixed-base and maintenance operations the business runs at the Eastern Slopes Regional Airport in Fryeburg, will remain open.

McDougal also said that the Economic Development Activity grant required new jobs to be created in the area, not to be moved from elsewhere.

Oxford Aviation was founded by Horowitz in 1989, and two years ago reported it had more than 60 employees at Oxford and Fryeburg sites.

Sanford Regional Airport is also the home to Southern Maine Aviation, MAS Hangars, and the Cockpit Cafe.

The hearing will take place at 7 p.m. Tuesday at the Sanford Town Hall.