LEWISTON – The collapse of financing for a $7 million jet refurbishing operation in Sanford has some people connected with the Twin Cities airport wondering what happens next.

The Auburn airport had been in the running for the Oxford Aviation facility three years ago.

Oxford Aviation’s plan to build a 90,000-square-foot facility at Sanford Regional Airport to refurbish jets and bigger planes hit the skids last month when its Boston-based financing partner pulled out. No reason was given by OSO LLC officials about why the deal fell through, after it had reportedly sunk $400,000 into the project.

Likewise, Sanford’s economic development director wouldn’t comment on specifics of the breakdown. That city had spent $300,000 readying the site for Oxford Aviation and received approval for a $670,000 bond.

The project also got a federal Economic Development Administration grant of $1.75 million.

According to the Sanford News, town Director of Economic Affairs Les Stevens told councilors in February that he expected Oxford Aviation and OSO to finalize their partnership by the end of the month and that construction could begin in the summer. But in late July, Stevens said that the partnership was not going to happen.

Oxford Aviation President Jim Horowitz did not return calls seeking comment. He had been in discussions with the Lewiston-Auburn Economic Growth Council about three years ago, eyeing the Auburn-Lewiston Municipal Airport as a possible site for the jet refurbishing operation, said Lucien Gosselin, growth council president. A confidentiality agreement precludes him from revealing any of the details of the negotiations.

“We tried hard to induce them to come here, but it didn’t work out,” said Gosselin. “Our door is always open if they want to reconsider.”

Gosselin said a project the size and scale of a jet refurbishing business is extremely expensive. For instance, the lighting has to be explosion-proof and specialized ventilation systems installed for painting the aircraft.

“It’s very difficult; there are extensive safety and environmental issues,” he said.

But the local airport could accommodate that or another operation. Rick Cloutier, airport manager, said Sanford and Auburn-Lewiston airports are similar in size and amenities. Both have 6,000-foot runways (twice as long as Oxford Regional Airport’s runway). Both are designated Pine Tree Zones, making them eligible for state-backed incentives. Both have communities willing to make substantial investments and available land.

“We have the space and facilities for it,” said Cloutier.

He noted, however, that Horowitz has not contacted the airport since the Sanford financing fell apart.

The Auburn airport already has a refurbishing operation under way. This spring a team of engineers arrived from Germany to restore historic Lufthansa aircraft. Last month the city’s Planning Board approved plans for a $2 million hangar that will be built by developer George Schott to refurbish the 1950s aircraft – Germany’s equivalent of Air Force One.

The project is expected to take until 2010. Once it’s finished, the airport hopes to find another tenant for the 27,000-square-foot hangar.

“It’s a perfect example (of a suitable refurbishing project),” said Cloutier. “They’re doing quite well here.”

According to Oxford Aviation’s Web site, its facility would have offered custom paint, interior refurbishing, custom cabinetry, design services, maintenance and avionics for jets. It had been expected to open in March 2008.

Oxford Aviation employs about 60 people in its existing refurbishing facility in Oxford and an aviation maintenance business in Fryeburg.

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