Economic Incentives and the Kingman Airline Services Deal

July 16, 2016 5:35 AMViews: 2470

By Paul Gable

The recent announcement by Horry County officials that Kingman Airline Services will be expanding its business to Myrtle Beach International Airport is one in which enthusiasm must be tempered.

The announcement was accompanied by sparkling pronouncements from such dignitaries as Gov. Nikki Haley, Horry County Council Chairman Mark Lazarus, Myrtle Beach Mayor John Rhodes and the like.

Local media was quick to pick up on this announcement to shout ‘180 jobs coming to Horry County’ without the qualifying ‘we hope’ that this type of deal requires.

We’ve heard this type of fanfare before – do you hear AvCraft and PTR Industries among others? I do.

It’s only four short years since we heard the last “It’s a great day in Horry County” when the last AvCraft deal was announced by many of these same players.

The initial reaction I heard from several callers who contacted me was, “Is this AvCraft 2.0?”

On the surface it sounds a lot like it. A small Arizona company plans to open an aviation maintenance and repair facility (MRO) at Myrtle Beach International.

It promises to provide 180 new jobs to the area over a five year period. For that promise, Horry County and the Myrtle Beach Air Force Base Redevelopment Authority is providing a total of $250,000 in incentives (read cash payments).

According to sources familiar with the deal, the payment of the $250,000 will be phased over the five year period of the agreement and will depend on Kingman meeting targeted employment levels along the way.

Kingman will be leasing one of the former AvCraft hangars from Horry County Department of Airports. I do not know the rental amount. However, I have been assured by several county officials familiar with the discussions that the rent will be in line with market value and more than AvCraft paid.

In addition, Horry County will be spending an estimated $100,000 to repair the fire suppression system in the hangar and to repair the hangar doors.

Change a few numbers and details on the agreement a bit and that is exactly the type of incentive package AvCraft was offered several times, but never made good on.

I have been told that proper due diligence has been performed on Kingman and that the company is much more stable than AvCraft was. (There was never any real due diligence performed on AvCraft for any of the three times the economic development corporation brought deals before county council.)

Talking to people much more familiar with the aviation field than I makes it hard to believe that Myrtle Beach International is a location that can support a 180 employee MRO.

For now I will watch with a very skeptical eye. Neither Horry County Department of Airports nor the MBREDC has earned any respect for their ability to put together these types of deals.

And that skepticism doesn’t even extend to the problem of using taxpayer dollars as incentives to attract a business to locate here.

In my opinion, that is not a proper expenditure of taxpayer dollars!

I am not ready to call this AvCraft 2.0 at this time, but we better see some real progress quickly or this deal will fall into that category quickly.

 

 

 

 

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