Cape council holds fate of plane maker

Financially troubled Renaissance Aircraft will have until Oct. 1 to get its airplane manufacturing business up and running at the Cape Girardeau Regional Airport if the city council approves an amended lease agreement Monday night.

City attorney Eric Cunningham said John Dearden, president of Renaissance Aircraft, has agreed in principal to the revisions regarding lease payments to the city that are crucial to retiring bonds used to finance construction of the manufacturing plant.

"We want to give him every opportunity to be successful," said airport manager Bruce Loy. "It is to everybody's benefit."

If he's not successful, the city will become responsible for payments earlier estimated at $250,000 a year for more than $2 million in bonds.

Renaissance Aircraft relocated from Eastman, Ga., to Cape Girardeau in 2001 with promises of manufacturing hundreds of planes a year and creating at least 200 new jobs. The city sold $2.6 million in bonds to construct a hangar for Renaissance at the regional airport and to pay for the extension of water and sewer lines to serve the business.

The Missouri Department of Economic Development approved a grant of nearly $480,000 to assist the city with constructing a major water line to the Nash Road area near the airport and a $750,000 loan for working capital for Renaissance Aircraft.

After operating temporarily out of various buildings,the company moved into its new hangar in October 2002.

So far, there's little to show for the state and local investment except the 48,000-square-foot hangar, which is owned by the city and leased to Renaissance Aircraft. The city also owns the land on which the hangar sits.

The company, effectively shut down by litigation for several years, was scheduled to start making monthly lease payments to the city on April 1. But Renaissance Aircraft so far has made no payments to the city.

Under the revised agreement, the city will use $139,557 left over in bond proceeds to cover the facility rent payments through September and make the bond payments in October.

As of Oct. 1, Renaissance Aircraft will be required to pay $4,655 in property lease payments dating back to April along with over $38,000 the city spent from its own funds to aid the project because of lower-than-expected interest gained on the bond proceeds. Also, the company will be expected to begin paying the city a monthly amount of over $21,000 in building and property lease payments. The payment schedule extends over the next 17 years.

The company was hurt financially by a legal battle with the Arizona-based Don Luscombe Aviation History Foundation, which sued over Renaissance Aircraft's plan to manufacture the Luscombe 8F airplane.

Cunningham said city officials have been told that Renaissance Aircraft now has clear rights to manufacture the plane. The two-seat, recreational airplane's design dates to the 1930s.

Loy said the conclusion of litigation in Arizona should help. "They have an opportunity for people to come on board with financing," he said.

The company, which at one time had 20 employees, currently has no full-time workers.

Dearden said in January that he was looking for investors to provide an infusion of cash so the company can meet its financial obligations.

If that doesn't happen, the city would take possession of the Renaissance Aircraft hangar at the Cape Girardeau Regional Airport and seek to lease it to someone else to secure the income needed to make the bond payments.

But Mayor Jay Knudtson said the bond restrictions limit what the city can do. While it owns the hangar, it can only lease the building for aviation manufacturing, he said.

"That really has us to a certain degree behind the eight-ball," Knudtson said.

mbliss@semissourian.com

335-6611, extension 123