New Mexico pulls out stops to lure aircraft builders

 - March 29, 2007, 7:07 AM

New Mexico’s license plates proclaim it to be the “Land of Enchantment.” And a growing number of business aircraft manufacturers are enchanted with New Mexico’s efforts toward becoming an “aviation cluster” of airframe manufacturers and supporting businesses.

From Albuquerque north to San Juan Pueblo near Los Alamos National Labs, state and local leaders have been extending enticements used by others elsewhere, in addition to a couple they’ve invented themselves. So far, Eclipse Aviation has already set up shop in Albuquerque, and Aviation Technology Group, developer of the Javelin jet trainer, has announced plans to manufacture its airplane there as well. American Utilicraft of Lawrenceville, Ga., this year made a commitment to establish an assembly facility in northern New Mexico, and Adam Aircraft has reportedly expressed interest in moving from Colorado to New Mexico to build its A700 very light twinjet.

Six-year-old Eclipse Aviation was the first lured to New Mexico by a combination of tax breaks, facilities and infrastructure. Vern Raburn, Eclipse founder, president and CEO, told AIN that he considered a score of sites before settling on Albuquerque to base his company. Raburn, an Arizona resident before coming to New Mexico, said the Phoenix area came in second with space on the former Williams Air Force Base, now Williams Gateway Airport, but the government coalition operating the long-time pilot training center was unwilling to provide the necessary manufacturing and engineering buildings and associated infrastructure to support Eclipse 500 development and production.

“New Mexico was willing to do whatever it took to get us here,” Raburn said. “Arizona’s attitude was, ‘We’re Arizona. We don’t have to extend ourselves because people want to come here anyway.’” What New Mexico did included a tri-party deal, which resulted in Eclipse acquiring 150 acres on Albuquerque’s Double Eagle II airport at no cost. The state also waived the 3 percent “fly out” tax on aircraft sales, while the city provided favorable lease arrangements for Eclipse’s interim operations at Albuquerque International Airport. Raburn praised Gov. Bill Richardson for his efforts in persuading the New Mexico State Investment Council to extend venture-capital funding to Eclipse and Aviation Technology.

The state became an Eclipse stockholder last July by investing $10 million in the firm’s $86 million fifth and final round of capitalization. Eclipse v-p for investor relations Perry Denker noted that New Mexico is one of only five states currently with budget surpluses, and is thus able to make such capital available to encourage an influx of business and industry.

The New Mexico Business Weekly recently quoted Ron Lovato, CEO of Tsay Corp., the Native American San Juan Pueblo’s economic development arm, as saying, “Our intent is to build an aerospace industry in this state.” To that end, the community and American Utilicraft on Feb. 13 signed a memorandum of understanding under which the developer of the FF-1080 short-haul package freighter will build the aircraft in a new 80,000-sq-ft assembly plant to be erected at the dormant San Juan Pueblo Airport (Q14), approximately 25 miles north of Santa Fe. In return, San Pueblo has pledged to invest $11 million in American Utilicraft and the yet-to-be-certified turboprop twin, and to upgrade the airport on its Espanola Valley reservation.”

Lovato said, “The big issue is getting the infrastructure in the area. We’re going to be breaking ground in the spring for the airport reconstruction. It has been closed for several years. It is part of our long-range plans to use the airport as a catalyst for economic development.” He added that Tsay has also extended a proposal to Adam Aircraft.