Last Chance for AvCraft

By Paul Gable

Nearly three years after it signed its latest economic development incentive package with Horry County, AvCraft Technical Services has one last chance to demonstrate its promises are more than hot air.

Sources within county government said AvCraft is currently three months behind in rent payments to the county. Additionally, according to those sources, AvCraft has not begun to make improvements to the fire suppression system and other improvements at the hangars it rents as agreed to in the latest incentive package.

Horry County Council voted Tuesday night to send AvCraft a “Right to Cure” notice that will specify how many days the company has to bring its rent arrearage up to current status or eviction proceedings could begin.

This wouldn’t be so bad if it wasn’t so predictable.

AvCraft was first introduced to Horry County by, then Horry County Council candidate, now Horry County School Board Chairman Joe DeFeo. Bringing AvCraft to Horry County appeared prominently in DeFeo’s 2004 campaign literature for his unsuccessful bid for the District Three seat.

AvCraft was given a multi-million dollar incentive package negotiated by Partners Economic Development Corporation and agreed to by Horry County Council. As part of that package, AvCraft promised to create 400-600 “high paying” jobs.

AvCraft Support Services, as it was then known, brought 54 employees from its former Tyler, Texas and Canton-Akron (Ohio) Airport locations when it consolidated and relocated to Horry County in early 2004. It operated at Myrtle Beach International Airport for approximately 21 months under a “space use” agreement with Horry County Department of Airports.

Shortly after the final reading was given by county council to the ordinance approving the AvCraft incentive package in Summer 2005, the company’s production line (AvCraft Aerospace GmbH) in Germany was in bankruptcy, its parent company (AvCraft Aviation) in Leesburg, VA was closed and its CEO at the time, Ben Bartel, was in jail in Germany for tax evasion. AvCraft was still employing approximately 50 people in Horry County.

But, Horry County Council went ahead and approved the incentive package because AvCraft Support Services still promised 400-600 “high paying” jobs and county council believed it. A clause in the incentive package guaranteed four years of incentive payments by Horry County to AvCraft if the company met its first employment goal of 50 employees in its first six months. AvCraft brought that many employees along in its relocation guaranteeing the incentive payments.

Within the next 12 months, AvCraft Support Services was foreclosed by Canadian bank Maple Financial, its principal lender. Maple Financial continued to provide funds to keep AvCraft Support Services operating, hoping to recover some of its investment in a future sale. AvCraft was still employing approximately 50 people in Horry County.

In 2009, Maple Financial finally sold AvCraft Support Services on the auction block and AvCraft Technical Services was born – the “new AvCraft”, according to company pronouncements at the time. AvCraft was still employing approximately 50 people in Horry County at the time.

The “new AvCraft” approached Horry County about rent reductions for the hangars and buildings it occupied at Myrtle Beach International. In 2010, AvCraft signed a new “space use” agreement with the Department of Airports, including the requested rent reductions, for a guarantee of providing only 50 new “high paying” jobs.

In January 2012, the “new AvCraft” and Horry County Council entered into a new incentive package, this time negotiated by Brad Lofton, CEO of the now Myrtle Beach Regional Economic Development Corporation.

The new incentive package provided $200,000 in cash ($100,000 each from Horry County and the State of South Carolina) along with requested rent reductions for the promise that AvCraft would hire an additional 150 new employees over the next five years. AvCraft was still employing approximately 50 people in Horry County at the time.

At the 2012 announcement of the new incentive and job creation package, the first one Lofton finalized after approximately nine months on the job at MBREDC, the following notable political pronouncements were made:

“I am thankful for the company’s commitment to Horry County and proud of our economic development team for this terrific announcement.” – Tom Rice, Horry County Council Chairman and S.C. 7th Congressional District candidate at the time.

“It’s another great day in South Carolina, and we are going to celebrate AvCraft’s decision to expand and create 150 new jobs in Horry County.” – S.C. Gov. Nikki Haley

If only it were so.

AvCraft today employs approximately 50 people in Horry County and, now, the clock is ticking.

 

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