A month ago, I suggested there was something fishy in Manitowoc
, where an aircraft manufacturer dangled a potential new production facility, with lots of jobs, and then quickly snatched it away. It was cited by Republicans as more evidence of Wisconsin's bad business climate.
File this Manitowoc Herald-Times Reporter story
under Suspicions Confirmed. The whole deal reeks from top to bottom. The company was trying to play communities off against one another when, in fact, it probably has no plans or money to pull off any development of the scope it was talking about.
What Manitowoc's economic development head, Ken Stubbe, discovered, he said in an e-mail to local officials was:
During our due diligence we heard from their home community that the company is at least $20-30 million and years away from getting their new model plane FAA certified for manufacture, they currently have less than 20 employees, they have no experience in large scale manufacturing and distribution and they have no investors to make all of this happen.
That's the report on the company that was talking about providing 300 new jobs to Manitowoc. Here's the newspaper story:
EDC official criticizes plane maker Stubbe says LoPresti Aviation started an artificial bidding war among potential plant sites
MANITOWOC --LoPresti Aviation engaged in an artificial bidding war among prospective host cities for an airplane manufacturing facility, a leading economic development official in Manitowoc County said Friday.
Manitowoc County Economic Development Corporation Executive Director Ken Stubbe said officials of LoPresti, based in Vero Beach, Fla, have been unfair in dealing with local officials.
LoPresti said it has numerous suitors throughout the country seeking to build its "Fury," a single-engine sport plane.
Stubbe said Friday he was unable to confirm claims by R.J. Siegel, LoPresti's Milwaukee-based vice president of operations, that other cities have offered multi-million-dollar economic development packages.
Stubbe said there was concern from the beginning that LoPresti might have been trying to create an artificial bidding environment among communities seeking the plane manufacturing plant and its 300 associated jobs.
"The normal entrepreneur is exuberant and tends to exaggerate. That wouldn't surprise me and you kind of ignore it, but when it goes over the pale, you have to consider that a red flag," Stubbe said.
He said calls were made to five cities mentioned by Siegel as having offered substantial economic package offers for the plant.
"None of the community leaders confirmed anything near the $16 million to $18 million mentioned by Siegel. The highest confirmed was about $600,000," Stubbe wrote in an e-mail distributed Thursday to the EDC board, and other civic and business members.
Stubbe said LoPresti might have a community partner, but added, "I just never saw any evidence of it."
On Tuesday, Stubbe and Siegel made conflicting statements on the status of Manitowoc's bid for the plant.
Stubbe announced LoPresti had turned down Manitowoc's incentive package.
In response, Siegel told the Herald Times Reporter
: "We never said, 'Nope, sorry, goodbye.'"
The HTR has obtained a copy of a July 14 e-mail from Siegel to Crawford that, despite nuanced wording open to some interpretation, indicates LoPresti had rejected the Manitowoc incentive package.
"While it does not seem economically feasible based on your available resources to provide that (manufacturing) opportunity, that does not in any way detract from our positive appraisal of the community," Siegel wrote after reviewing the EDC's proposal, which included local and state financial incentives.
On Tuesday, Siegel said he had sent Manitowoc officials copies of specific bids from other community suitors, to help Manitowoc learn how it could be more competitive in luring the plant.
In his e-mail, labeled "LoPresti inaccuracies," Stubbe wrote, "Neither I nor anyone else on the local team that I know of has copies of detailed proposals from other communities. When Siegel was in town on June 26, he said he would send these proposals but he never did."
No business plan
"Our due diligence showed inconsistencies in what was being said (by LoPresti Aviation). Probably, the company very likely didn't have the economic wherewithal to make the project happen," Stubbe said.
"LoPresti didn't seem willing or able to provide a detailed business plan to us, and that's what we should have before we put together a proposal," he said.
After Todd Lohenry, LoPresti's Algoma-based business operations manager, publicly encouraged Manitowoc's bid for the plant, Stubbe said he felt "pressure" to respond with an offer.
In his e-mail Stubbe said, "Despite never having seen a business plan or financial information, the Manitowoc team offered incentives in our proposal equal to other recent large-scale local projects."
Much of the aircraft industry's infrastructure and workforce skills are clustered in Kansas, Texas, Florida, California and Seattle, which "makes it exceedingly difficult to start a new plant in Wisconsin; especially, a completely new company," Stubbe wrote.
Asked whether he felt LoPresti executives had dealt with Manitowoc officials in a fair and honest manner, Stubbe said, "No," but chose not to elaborate.
Nevertheless, "I wish them well," Stubbe said.
LoPresti officials did not return several phone calls placed Friday. It's pretty charitable of Stubbe to say that about a company that has just done its best to play his community for a fool.
You can bet LoPresti won't be returning those phone calls anytime soon, either.