BRUNSWICK — Facing difficulties in obtaining financing, Kestrel Aircraft CEO Alan Klapmeier said Wednesday that his company is looking at Berlin, N.H., as a possible site to build the composites for its turboprop airplanes.

That would leave assembly and maintenance and repair operations at Brunswick Landing, the former naval station.

Although Klapmeier said he was initially drawn to the area because of the concentration of composite companies and an experienced labor pool, he said Kestrel has been unable to secure the financing to keep the entire aircraft production arm of the company in town.

Now the company is looking at places, including Berlin, N.H., to do what Klapmeier in September 2010 told the Town Council he would do in Brunswick: build composites.

Working through Coastal Enterprises, a Wiscasset-based private, nonprofit community development institution, the company was hoping to fund its $100 million project through the federal New Market Tax Credit program. The program helps bring jobs and investments into low-income or distressed areas, as identified in the U.S. Census.

If awarded the full amount, Kestrel would have received $39 million in tax credits that CEI could turn around and sell at a discount to investors.

But Kestrel has only received a fifth of the amount it was seeking. In April, the company was allocated $7.8 million in tax credits, enough to get Kestrel Aeroworks – the maintenance and repair operation – off the ground, but not enough to start manufacturing airplanes.

According to Charles Spies, chief executive of CEI Capital Management, there are no more tax credits available at CEI until January 2012. But even then, Spies isn’t sure CEI will receive any more credits to allocate because the New Markets program is so competitive.

As a result, Klapmeier has started looking around to see if other states may be able to provide more funding to get the project off the ground.

What makes Berlin attractive is that, like the former BNAS census tract, it qualifies for New Market. But because it is more rural than Brunswick, and 20 percent of New Market’s allocations must go to non-metropolitan areas, Klapmeier said Kestrel would have a better chance of receiving the rest of its tax credits.

Moreover, Berlin is designated a severely distressed area, while the census tract in Brunswick is merely eligible for the tax credits. Additionally, there may be other funding opportunities in New Hampshire separate from New Market, Klapmeier said.

Berlin also has a new biomass energy plant that could supply cheap heat and power to Kestrel. Because building composites is the most energy-intensive part of the airplane construction process, Klapmeier said it makes sense to consider putting a plant close to the energy source in Berlin.

“We’re looking at New Hampshire, (and) we’re looking at several other locations” where there are tax credits available that are not available in Brunswick, Klapmeier said, although he wouldn’t say where.

Even if Kestrel builds composites in Berlin, Klapmeier said he intends to transport the finished parts to Brunswick for assembly. He said he also expects to utilize Southern Maine Community College’s composite program to train employees.

“Part of our view of Berlin is that it’s close to (Brunswick), 67 nautical miles in the airplane,” he said. “We would still be training people here, moving people back and forth, we would see this as being relatively co-located.”

But he acknowledged that building a composites plant in Berlin would mean fewer jobs in Brunswick. However, there is a possibility, although not a certainty, that more than 300 jobs would still be created in Brunswick, he said.

If Berlin falls through, however, Kestrel could move not only its composite plant, but its entire aircraft manufacturing company out of Brunswick Landing.

The Berlin deal “is clearly our first choice,” Klapmeier said. “We’re not going to say it’s our only choice and we’re not going to go out of business if we can’t get the financing.”

At the very least, Kestrel Aeroworks has to stay at Brunswick Landing for seven years under the conditions of the New Market tax credits already received. Klapmeier has also signed a 20-year lease for half of Hangar 6 at the former air base.

According to state Sen. Stan Gerzofsky, D-Brunswick, Maine’s congressional delegation and state officials are mobilizing to try and keep all of Kestrel in Maine.

“We’re not losing jobs to New Hampshire, period,” Gerzofsky said Wednesday.

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