Deal to buy Commander Premier at Cape airport close to completion, investor says

After months of waiting, the deal for a Canadian investor to take over Commander Premier Aircraft Corp. in Cape Girardeau seems poised for completion.

Ronald Strauss, founder of Aero-Base Inc., said that almost all remaining obstacles to securing the financing necessary to purchase the company have been cleared and he expects to obtain the money he has been seeking by the end of the week.

The purchase of the company, which would include paying the city's outstanding debt for the company's production building at the Cape Girardeau Regional Airport, could be completed by the first full week of April, Strauss said. The deal has been pending since July, when Strauss announced his intention to purchase the company.

"I have been committed to what we have been discussing," Strauss said. "The only issue is the delays, and hopefully they have been resolved."

City manager Scott Meyer, who said he has spoken to Strauss at least once a week recently, said he remained skeptical but feels more confident about the deal than he has for several months.

The difference, Meyer said, is that Strauss, instead of talking about the difficulties in the financial deal, is now talking about timelines. "I wouldn't say I have heard those words before," Meyer said. "Because of the amount of difficulty they have had getting the financing all the way through, I am cautiously optimistic but the proof will be when the earnest money check gets here."

Commander Premier became an issue in the contest for mayor when both Matt Hopkins, a former councilman, and Harry Rediger, a retired businessman, said at a candidate forum they wanted the matter settled before the April 6 election.

Told that a breakthrough may be coming, both Rediger and Hopkins expressed relief.

"Absolutely we want it behind us," Rediger said. "Just as I as a citizen would welcome a resolution, if it could be resolved and not be hanging over the city's head, that would be very welcome."

"That would be huge," Hopkins said. "This is an issue that has hung on for many, many years."

Along with the potential for jobs, "it would free up money for priority needs," Hopkins said.

Strauss, a Montreal-based retired banker, has pursued an international financing deal to support his purchase of Commander. In past interviews, he has said the world financial breakdown interrupted his plans, but Thursday he said the only thing needed now was signatures on the financial deal and "I am not expecting any kind of issues on that."

Commander Premier Aircraft Corp. was founded in 2005 when 50 owners of the single-engine propeller aircraft purchased the parts stock and name of a defunct Oklahoma aircraft company. They moved the operations into a 52,000-square-foot building at the Cape Girardeau Regional Airport that had been built with city revenue bonds for a company called Renaissance Aircraft.

When Commander arrived, the owners said they planned to do major overhauls of existing Commander airplanes and build new models. While the repair shop has been operating, no airplanes have been built and the 40 to 50 jobs promised never materialized.

The company was given incentives by the city to locate here, including free rent for six months and reduced payments until January 2010. The company was unable to meet even the reduced rent, making only eight of 45 scheduled payments, the most recent in December 2007. As of last week, back rent stood at $533,050, said John Richbourg, city finance director. Rent continues to accrue at the rate of $21,016.67 per month.

The next bond payment of $199,000 is due April 1.

Dwindling reserve

Making bond payments has been a major factor in a dwindling city reserve fund. Unrestricted reserves peaked at $1.4 million in 2004 but were almost depleted by the time the current fiscal year began July 1. The city has since taken several steps to shore up that account, including the planned switch to automated trash collection.

The city has been reluctant to evict Commander from the airport building while Strauss' deal was pending. The city has talked with other prospective users of the building and continue to discuss it with anyone interested, he said.

But Commander is the preferred tenant, he said. "Our focus has been on trying to make the deal work," Meyer said.

Restrictions on the bond financing, included initially to secure lower interest rates, require that tenants of the building engage in airplane manufacturing and repairs. Other activities, even those related to the airport such as an air freight operation, cannot be located in the building until the bonds are repaid. Without a deal with Strauss, semiannual bond payments will be required until April 1, 2021.

In recent weeks, Meyer turned up the pressure on Commander Premier by notifying the company that it needs to make room for airplanes needing overnight, indoor accommodations at the airport. Traffic at the airport sometimes means hangar space isn't available in other buildings.

The upbeat news from Strauss won't change that demand, Meyer said.

"That is still our stand," Meyer said. "We have been making the payments. If we can rent out the front part of their place, use that and keep the pressure on, we will."

Neither Strauss nor Meyer would disclose details of how the deal is being financed, except that it is not a simple transaction. "The funding was a difficult, highly unusual funding mechanism," Meyer said. "It is hard for me to say this is like getting a loan from the bank, because it is not."

And Strauss said that while a complete deal is now in sight, the timing for finishing every bit of the transaction isn't set. "I don't think everything will be resolved by April 5 or 6, but I know we are in a position for it to be resolved."

rkeller@semissourian.com

388-3642

Pertinent address:

Cape Girardeau Regional Airport, Cape Girardeau, MO