By Renee Worthing
Register Reporter
   Sanford’s Director of Economic Affairs Les Stevens said higher than anticipated development costs created a funding gap in the Oxford Aviation project thus slowing its progress. However, Burlington, Mass. based OSO, LLC has stepped up to partner with Oxford Aviation.
   As Oxford Aviation entered the “Project Development Stage,” a public hearing during the Oct. 30 Sanford Town Council meeting provided an opportunity for Stevens and officials from the two companies to explain the partnership, financing and the delays.
   “This is the third bite of the apple of this particular $400,000 grant,” Stevens said.
   Because federal funds are distributed to the state, then the town and then Oxford Aviation, certain rules and regulations apply, including a public hearing, which did not require any action on the part of the council.
   “I wanted to elaborate on the delay. I know all of us who have worked on this project wish it was up now, wish the brick and mortar were up,” Stevens said. “I want to commend the council and the people for their patience. I feel we owe them an explanation as to why the project isn’t up.”
   He said the Department of Environmental Protection’s “soft” costs associated with permitting drove up the project costs, as well as permitting conditions and the time of year the bidding was done “raised the costs and created some funding gaps.”
   “No lender wants to be in there alone,” he said. “The lenders want to make sure when they go forward with a project, every dime, every dollar is there to do it.”
   He said the rising costs precipitated a suggestion for Oxford Aviation to partner with a strong financial partner.
   “That took time. All of those (proposed partnerships) require due diligence,” Stevens said. “They have to learn about the deal, structure of the deal, the project, about Sanford, about the state. The result of meetings and phone negotiations and a certain amount of down-the-road due diligence is that now we’re at the point where there is a letter of intent between Oxford Aviation and OSO to form a financial partnership.”
   He said further due diligence is required, but said he is confident the partnership will move forward.
   “There is a spirit and a will on the part of part Oxford Aviation and OSO, LLC to wrap up that due diligence and close on a partnership to move the project forward,” he said.
   He said the project would be strengthened by “marrying the two corporate cultures and skill sets of Oxford Aviation and OSO.
   “What we’re doing is bringing together, under an umbrella, a broader set of skills and strengths,” Stevens said. “Both companies share a vision of the aviation future.”
   He said the partnership will not alter the fundamental nature of the project.
   Oxford Aviation President Jim Horowitz said there have been “lots of sleepless nights,” but said one of the “great outcomes” is the relationship with OSO.
   “One thing I’d like to say is thank you to the council, Mark Green and Les Stevens for patience and not giving up on the project. My Sincere appreciation for opportunity given to me and my colleagues,” Horowitz said.
   “If people work together, they get a heck of a lot more done,” OSO Vice President Marshall Frankel said. “I want to see what we can do in Sanford. I love Maine. I want to create jobs for Maine people so they don’t have to go out of state to get jobs.”
   Stevens said the project is comprised of two components, the public airport site component (to improve the site) and the private hangar component.
   “It’s been awhile since we got into the guts (of this project),” Stevens said.
   Stevens said $250,000 of money paid by Sanford that isn't bonded, as well as a general obligation bond of $670,000 approved at Town Meeting, $47,000 from the Department of Environmental Protection Brownfield’s Grant, more than $1.1 million EDA Public Works Grant and $208,000 from Oxford Aviation is designated for the project.
   But, Stevens said there have been misunderstandings about how much money has been spent.
   “Of those sources of public monies going into public side of improvements, about $300,000 has been spent. That would be $250,000 of the cash,” Stevens said.
   He said the $47,000 of Brownfield’s money was also spent, but because it is state money, it didn’t count it as “Sanford money.”
   He said the total amount of Sanford money that will be going into the project is $920,000.
   “That is basically the sum of $250,000 cash and the  $670,000 general obligation bond,” he said.
   However, Stevens said the general obligation bond has not been touched.
   “Overall, a little bit less than a million dollars which is pretty good leverage if you’re looking at an $8 million project,” he said. “We’re doing a project on non-Sanford money.”
   He said funding for the private hangar component consisted of $400,000 for each of two Community Development Block Grant business assistance grants, a Maine Rural Development authority loan for $500,000, a Finance Authority of Maine, (FAME) loan for $500,000 to $700,000, a Maine Bank and Trust loan for $3.5 million, an Efficiency Maine grant for $10,000 and monies from Oxford Aviation.
   Stevens said he wanted to clarify the job creation portion of the project.
   He said the project will create 200 jobs.
   “Each individual grant has certain a job creation number attached to it,” Stevens said. “The first business assistance grant was 15. Part II, the one before you tonight for the public hearing is 86. To close out this particular grant, 86 jobs must be created.”
   He said contingent mechanisms were in place as well, including a development fund loan of $400,000 and a third $400,000 CDBG business assistant grant.
   Additionally, the project includes long-term incentives such as a15-year tax increment financing and 10 years of Pine Tree Zone designation.