Mike Parker: Investment in aviation company produces soaring dividends
A little more than a year ago, LGM Enterprises, LLC, collaborated with the North Carolina Department of Commerce, the Economic Development Partnership of N.C. (EDPNC), and the North Carolina Global TransPark Authority to launch a company to paint and refurbish aircraft at the TransPark here in Kinston. This partnership enabled LGM Enterprises to obtain a Job Development Investment Grant (JDIG) to support the company’s investments in the project.
When the partnership was first announced, expected job creation was 145. In just under a year, flyExclusive, the Kinston branch of LGM Enterprises, not only met that goal, but exceeded that estimate by adding 150 employees.
The initial announcement said flyExclusive aimed at providing an average salary of $59,245, a figure nearly $24,000 higher than the current Lenoir County average wage of $35,543. Officials said the company exceeded that expectation, as well. The 12-year JDIG grant of $2.346 million was matched by company investments of $10.6 million.
Aircraft must be refurbished every seven years. Until the Kinston facility opened, flyExclusive had to send its aircraft out of state to undergo the refurbishing process. Company leaders thought opening a facility in Kinston made sense. After all, flyExclusive is the fifth largest charter operator in the United States, and the company is on pace to become the third largest by 2022.
In fact, flyExclusive owns and operates 76 total aircraft, ranging from Light, Midsize, Super-Midsize, and Large cabin sizes. Every aircraft is equipped with complimentary WiFi. Just recently, the company added 12 new Cessna Citation aircraft to its floating fleet, becoming the second largest owner-operator of Cessna Citation aircraft in the world.
The grant and company investment resulted in two new hangars specifically designed for full exterior stripping and painting. Both facilities feature state-of-art electrostatic paint and coating methods that reduce hazardous waste, minimize environmental impacts, and produce the highest quality paint services in the market today. These spacious facilities were built to accommodate large charter and private aircraft, including the Gulfstream G-IV.
The current facilities allow flyExclusive to provide services to 18 aircraft per year, so meeting the needs of current flyExclusive aircraft will take a little over four years. At that point, the company will reach out to other companies to provide refurbishing services.
Given the geographic advantage of Kinston and the eastern seaboard relative to several major markets, flyExclusive has positioned itself to provide comprehensive full paint and interior services in a cost-effective manner for aircraft owners within a 30-minute to 2-hour flight time of the GTP.
Over the course of the 12-year term of this grant, the project will grow the state’s economy by an estimated $414 million. Using a formula that takes into account the tax revenues generated by the new jobs, the JDIG agreement authorizes the potential reimbursement to the company of up to $2,346,000 spread over 12 years.
However, state payments only occur when the departments of Commerce and Revenue verify that the company has met its incremental job creation and investment targets. Even after taking into consideration the grant’s reimbursement payments, JDIG projects result in positive net tax revenue to the state treasury.
The investment is already paying rich dividends. I observed the hangars for stripping and painting. I walked through another hangar that houses the work on engine refurbishment, as well as redoing the interior of the aircraft. I saw one airplane stripped on the inside, waiting for the interior to be rebuilt from the walls outward. I also observed industrious employees happy to be employed by a forward-looking company that provided good pay and job security.
Mike Parker is a columnist for the Neuse News. You can reach him at mparker16@gmail.com.
