Falls aerospace development gets IDA benefit extension

Dec. 15—Stavatti Aerospace's plans for producing aircraft in Niagara Falls and creating hundreds of jobs have hit some delays which company officials blame on issues on the world stage.

In a letter addressed to the Niagara County Industrial Development Agency, Stavatti President and CEO Christoper Beskar said while they intended to fully complete work by the end of this year, only a small portion of renovations, demolitions and design work has been completed.

He attributed the hold-up to delays from Congress on funding Stavatti purchase orders, contracts for the Ukrainian military impacting their schedule and issues with fundraising undertaken by investment banking firm Delmorgan & Co.

"Our plans remain as stated in the NCIDA application for assistance submitted in the fall of 2020," Beskar wrote.

The IDA originally approved $2.15 million in project incentives in Oct. 2020, with $1.37 million in property tax benefits, $604,000 in sales tax benefits, and $174,656 in mortgage tax benefits. Those benefits Stavatti received are due to expire Dec. 31, with the company requesting a two-year extension.

John Simon, president of subsidiary Stavatti Niagara, further added Wednesday before the Niagara County IDA that the Department of Defense's attention is more on the wars happening in the Ukraine and with Israel and that, along with the pandemic, has caused the process of approving export and market in certain countries to slow down.

"The Department of Defense is extremely involved with our allies and they're very busy," Simon said.

Simon, who was a previous IDA executive director, said project specifics are classified information. The company would be working on civil, commercial and military aircraft, which Simon said would be sold to the U.S. military and the militaries of other countries.

"Based on what's currently going on and our relationship with the Department of Defense, we should start active manufacturing of a prototype hopefully early this coming year," Simon said.

Beskar was not present at the IDA meeting, as he was said to be in Washington D.C. meeting with Department of Defense officials.

IDA counsel Mark Gabriele said that as part of Stavatti's agreement with the agency, the project has to be completed and have employment and investment numbers in three years' time, or February 2024.

Stavatti acquired the former U.S. Army Reserve Station at 9400 Porter Road, next to the Niagara Falls International Airport/Air Reserve Station, in late 2020 for the development and production of prototype military aircraft. Demolition and renovation have already happened, with three of the 10 buildings knocked down.

Outside of Stavatti, there are four other tenants operating at the Porter Road site.

The original cost of project documents was $25.875 million, raised through private funding with Stavatti reportedly having spent a few million so far. Simon acknowledged that costs have gone up since then.

It was also allocated 2,700-kW in low-cost power from the Niagara Power Project in January 2021, having been granted an extension.

The main concern at the moment is working with National Grid to replace a substation on the property at a price tag of $2 million over the next three years. Water, sewer and gas lines also need addressing.

Inside the main 47,000-square-foot hanger where the prototypes would be built, the east doors were rewired, new insulation was installed, and work on the west doors was in progress before Stavatti ran out of money.

Gabriele said so far, Stavatti has no full-time employees at the site and it spent less than $2,000 of the sales tax benefits received. If the project ends up not going forward, and the applicant takes advantage of sales tax benefits, there is a clawback provision where the IDA would, on behalf of the state and county, reclaim all the benefits the company received.

Project documents state 363 new jobs would be created in Niagara County within three years of completion, Simon hoping for rapid onboarding of personnel in 2024.

To ensure a stream of local workers, Stavatti worked on creating partnerships with Niagara County Community College and Niagara Falls High School. That helped create a new $5 million welding facility at NCCC and a Pathways to Technology program at the high school.

NCCC President William Murabito said the school still intends on partnering with a flight academy to train pilots, first announced in November 2021.

The IDA granted Stavatti a 90-day extension for its benefits, lasting through the end of March. Gabriele said they would have to come before the board again before that extension expires for the IDA to decide whether its benefits would be terminated.