Safire Plans To Decide On Plant Site Soon
Written by Tom Harlan on June 17, 2004
By Tom Harlan
Safire Aircraft officials say they plan to choose a location for a $45 million assembly plant by the end of next month after weighing offers from other cities and states.
The Opa-locka jet manufacturer will move its operations and build an assembly plant elsewhere if Miami-Dade County doesn’t come up with the best offer, company officials said. The company plans to make its decision based on a formula that ranks sites on economic incentives and obstacles to doing business.
"It’s an elaborate methodology to compare apples with apples," said Camilo Salomon, CEO and president of Safire Aircraft.
Mr. Salomon said the company expects to choose a location after a new board of directors is briefed on site options. The new board, requested by a Swiss private equity firm expected to finance the company’s operations, will review cities’ proposals and make the site selection.
Safire is considering other sites in Florida and cities in California, Colorado, Georgia, Kansas, New Mexico and Texas.
Mr. Salomon said Miami-Dade County has made a good offer to keep the company at Opa-locka Airport but better business conditions exist elsewhere.
To be the top selection in the company’s matrix, Safire wants:
Qualified tax incentives with the highest economic value.
Miami-Dade County to compensate the company for the more-expensive supplier costs of operating a manufacturing plant in South Florida as opposed to the Midwest.
Compensation for the possibility that the company will have to conduct site testing at Colliers Airport, 40 miles west of Miami-Dade.
According to the Beacon Council, Miami-Dade’s economic development agency, the county is offering Safire a qualified tax incentive package that is competitive with offers from other sites. In May 2003, the package was reported to be worth almost $10 million. The county would deduct funds to construct facilities at Opa-locka for Safire.
Frank Nero, president and CEO of the Beacon Council, said Miami-Dade faces two main challenges if it is to keep Safire at Opa-locka Airport.
First, other potential sites have presented economic packages that include zero or little land-lease costs. The Federal Aviation Authority and the Miami-Dade Aviation Department have set high lease rates at Opa-locka, he said.
Second, other locations have an infrastructure in place for the company to build its facility and would not deduct construction costs from their incentive packages.
Mr. Nero said Safire’s request that the county offer incentives for congestion and supplier costs isn’t critical because the airport is suitable for test flights and shipping costs to Miami are similar to those at other sites.
To receive an incentive package, Safire will need a letter of credit that states the company is financially solvent, Mr. Nero said. Financing would depend on the date of availability of the aircraft being manufactured by Safire, Mr. Nero said, making it urgent that Safire make a decision soon.
Safire recently suspended operations while it secures an unspecified amount of funds from its financier. Safire expected to receive funding from the Swiss on May 31 but encountered complications with a closing, Mr. Salomon said.
Mr. Salomon said he expects to receive funding when negotiations resume in Geneva today (6/17) and doesn’t expect a significantly delayed schedule when it resumes operations.
After closing the deal with investors, Mr. Salomon said, Safire doesn’t expect to have to seek money again. The pending deal should move the firm through the Federal Aviation Authority’s certification of Safire’s jet, he said.
Safire expects its jet, priced at $1.4 million, to make its first flight this year and to be delivered in 2006.
The county will not continue discussions with the company until it is financially solvent, Mr. Nero said. If the company builds its plant in Opa-locka, it would add 800 jobs with an average annual salary of $40,000, Mr. Nero said.