Mississippi County will be relinquishing its hold on a $2 million debt owed by Aviation Repair Technologies (ART), per a vote by the quorum court's planning and development committee Wednesday morning.
According to a report by Economic Developer Clif Chitwood, ART has been unable to meet the terms of its economic development contracts both with the county and the Arkansas Economic Development Commission. Chitwood said the state is considering a similar arrangement to forgive debt, since pressing for payment from either the state or county will likely result in ART closing down, terminating the 80 jobs being held by Mississippi County residents and leaving its facility empty and unprotected.
"We technically have a $2 million claim on them, but it's preventing them from drawing new business," he said. "In recognition of that, the AEDC has negotiated with them and will be satisfied on mortgages they currently hold. The equipment will be sold to the county by the state when those mortgages are satisfied. This may never happen, but the state is confident that this arrangement will prevent them from walking off with this equipment. Under a new contract, ART will stay open, continue paying rent to the Aeroplex, and maintain 100 jobs. Plus, this will keep the facility occupied and prevent vandalism of the property. If we press for our money, they are likely to just load up and leave."
Barry Ball commented that ART will likely not meet the terms of this new agreement either, and Chitwood agreed, but said his objective is to make sure that both the state and county's investments are at least protected.
He added he does not think the company will settle for part of the $2 million.
"All aircraft maintenance companies are under terrible stress right now, so no, that's not going to happen," he said. "I think honestly, this is the best deal we're going to get. At least we have these assets. Those buildings are in great shape, and they're not going to walk away. They haven't invested any of their capital in refurbishing those buildings. But they have put out around $14 million in payroll since they got to town. It hasn't been nearly the return we were hoping for, but it isn't slouchy. Our people have gotten back more money than we put in, and we still have these buildings in good shape."
A motion was passed to void the current contract with ART and draw up a new one which forgives debt and requires maintenance of 100 jobs. The motion will be brought to the full court next week for a vote.
The committee also voted its support for a new economic development project. Five Star Hydraulics, located on the airbase, has expressed an interest in moving its headquarters from Indiana to Blytheville. This would add 35 high-paying jobs, according to Chitwood. The company has requested a commitment of $10,000 per job, and wishes to purchase the building it is currently renting from the airport authority.
"We think the state is going to match this investment," he said. "We obviously don't have the money right now, as we are finishing up our commitment to Big River Steel, but I think by August, we'd at least have enough money to start with them [Five Star]. It's not a huge amount of money and it's not a huge amount of people but it's a good solid company."
Committee chair Bill Nelson said he did not wish the committee to promise funds that it does not already have in the bank.
"I despise deficit spending," he said. "I can't stand it, and I don't think we should be involved with it. When we commit money we don't have there's a problem. We see the problem our federal government is in for doing this. I think these things down the road are great. But here we are about to commit this money and having to tell anyone else wanting to come in to get in line when we have money down the road. Deficit spending is a cancer. We're already in it, and it looks like we're about to dig the hole deeper."
County Judge Randy Carney countered Nelson, saying he felt deficit spending was a good problem to have in this situation, since it brings new jobs into the county. A consensus was reached by the committee to officially express support for the project, but not commit any funds until they become available.
sspears@blythevillecourier.com