Tue, May 13 2008
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Published May 08, 2008 12:04 am - JEFFERSON CITY, Mo. — A $240 million plan to entice a Canadian airplane maker to Kansas City flew through the Legislature on Wednesday as politicians praised it as Missouri’s best-ever chance to land a super-sized development deal. Missouri: Lawmakers back tax breaks for Canadian airplane maker The Associated Press
JEFFERSON CITY, Mo. — A $240 million plan to entice a Canadian airplane maker to Kansas City flew through the Legislature on Wednesday as politicians praised it as Missouri’s best-ever chance to land a super-sized development deal. Political optimism aside, there is no guarantee that Bombardier Aerospace will choose to take Missouri’s incentives instead of those offered by its home country. Bombardier, the world’s third-largest civilian plane manufacturer, is looking for a place to make its new series of 110- or 130-seat passenger jets. Missouri is offering a large swath of grassland near Kansas City International Airport as an alternative to Bombardier’s previously expressed preference of Mirabel, Canada, just north of its Montreal headquarters. Missouri’s deal would provide up to $240 million in tax credits over eight years, beginning in 2013, based on the number of employees hired at the assembly plant. Bombardier would repay the tax credits, plus a 5.1 percent rate of return, by giving Missouri a fixed amount of money for each plane it sells from the plant. Along with the state aid, Kansas City would issue bonds under which the city owns the property and leases it back to Bombardier. Sponsoring Rep. Ron Richard predicted Missouri has about a 75 percent chance of landing the assembly plant. “This is a large scale project — something Missouri’s never had the ability to attract in a global economy,” said Richard, R-Joplin, chairman of the House Job Creation and Economic Development Committee. The House gave final approval to the legislation authorizing the tax incentives by a 138-14 vote Wednesday, sending it to Gov. Matt Blunt, who’s expected to sign it. Senators passed the bill 24-8 last week, but only after state economic development officials scaled back the incentives, delayed the startup of the tax credits and added greater taxpayer protections. Bombardier wants to build a projected $400 million assembly plant and flight testing site that eventually could employ 2,100 people with an average wage of $63,000. Economic development officials project the assembly plant could lead to the creation of an additional 5,000 jobs connected to its operations. Bombardier announced in May 2005 that it had signed letters of intent with the Canadian and Quebec governments to assemble its new C-Series planes in the Montreal area in exchange for about $350 million in government incentives. That came after the company had winnowed down more than a dozen proposals to sites in Quebec, Ontario, New Mexico and Northern Ireland. But the declining value of the U.S. dollar led Bombardier to reconsider locating in the United States. Top Bombardier executives toured the Kansas City site last week and dined at the Governor’s Mansion with Blunt and other Missouri officials. They helped negotiate the Missouri incentive package while also continuing talks with Canadian officials. “We expect the Missouri offer to be a very serious one, specifically because it eliminates the hedging problem we currently have in Canada,” Bombardier spokesman Marc Duchesne said in a telephone interview from Belfast, Ireland, where company officials were visiting one of their production plants. Because Bombardier sells its planes in U.S. dollars, it could prove more profitable to also pay for their assembly with U.S. currency, instead of Canadian money. 
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