Wichita City Council OKs bonds for Bombardier, Cessna

07/03/2012 5:00 AM

08/08/2014 10:11 AM

The Wichita City Council doubled down Tuesday on its commitment to two of the city’s largest planemakers, approving bond issues for product diversification and expansion.

The council voted 6-0, with council member Pete Meitzner absent, to approve bond issues, and the extension of property tax abatements, for Bombardier Learjet and Cessna Aircraft.

“It’s important for us to reaffirm our commitment to these businesses and the jobs they are creating for the city of Wichita,” council member James Clendenin said after the vote.

Bombardier Learjet sought industrial revenue bonds of up to $5.9 million to finance capital investments in the first half of the year, many stemming from a $52.7 million expansion that is the largest Wichita project in the company’s history. It includes a Flight Test Center, the establishment of Bombardier Centers of Excellence for Engineering and Information Technology, new facilities for paint and production flight testing, a new delivery center and parking lots. The city and Sedgwick County each have provided $1 million grants to defray costs of the parking lots.

The project will help the Bombardier site at Mid-Continent Airport make room for the company’s newest business jet, the Learjet 85, and will mean 450 jobs at the facility.

Included in the Bombardier package is recent work that emphasizes aviation engineering and IT, a big step, council members said, as the city diversifies the aviation cluster beyond manufacturing.

“It will provide us with some new opportunities,” Mayor Carl Brewer said. “That’s one of the things we’ve heard from the community for years, that we need to diversify what we have and do some things differently. In this case, what Bombardier is doing is a huge coup for the citizens of Wichita and for the entire industry, in the new jobs it will create and the quality of those jobs. We will be demonstrating to the industry that we can do a lot more things in Wichita than we have in the past.”

Cessna sought the reinstatement of a 2006 $800 million letter of intent that has an unused balance of a little more than $521 million. Proceeds from this bond issue have been used for building improvements, furniture, fixtures and tooling in the expansion of Cessna’s Wichita facilities. Included have been technology and manufacturing equipment to accommodate more employees and space to build four business jets here.

Both companies, longtime partners with the city in ongoing bond issues to finance growth, also maintain five-year, 100 percent property tax abatements on all property financed with bond proceeds. Those abatements are renewable for another five years if city officials determine the bonds are producing job growth.

The two companies have longstanding bond agreements with the city, Bombardier dating back to its 1961 Learjet days and Cessna dating back to 1990. Allen Bell, the city’s urban development director, said the council has issued more than $1.2 billion in IRBs for Cessna since 1990 to finance the expansion and modernization of its facilities.

Bell said the Cessna reinstatement comes in lieu of a longer-term growth plan in Wichita that remains in the works. He offered no specifics about Cessna’s future plans in Wichita.

Council member Jeff Longwell said the action is an acknowledgement of what Bombardier and Cessna add to the community.

“We’ve been pushing for job diversification for quite some time, and sometimes it takes a lot of different incentive packages to make that happen,” he said.

“What’s a breath of fresh air is we had a unanimous vote from the council, even knowing that some typically vote against most of the incentives that come before us. There was no opposition here today, so I think people understand the importance of reinvesting and the opportunities these companies bring to the local job market.”

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