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Farmington • Plans for a new $15 million aerospace manufacturing plant near Hill Air Force Base expected to bring in 70 jobs are on track after a recent revenue bond hearing by the Davis County Commission.
Ki Ho Military Acquisition Consulting Inc., or KIHOMAC, is a Springfield, Va.-based company whose Utah operations manufacture metal and composite parts for a variety of aircraft, from the A-10 to F-16. It's "rapid prototyping" capabilities and expertise are important to ongoing and future aircraft maintenance work at Hill, said Michael Sullivan, of the Governor's Office of Economic Development (GOED).
A public hearing held last week by the Davis County Commission was required to move forward with its issuance of $10 million in tax-exempt industrial revenue bonds to construct the planned 125,000 square-foot facility in Layton.
"Typically, private entities do not qualify for tax-exempt loans, but there are some very limited circumstances [where they do], and that's what we have here," said Eric Johnson, a Taylorsville attorney representing the company. The Internal Revenue Service, he said, uses a special exemption to encourage small manufacturers on the condition that a local public body — in this case, the Davis County Commission — will sponsor them.
Commissioner Jim Smith has called the project a "perfect fit" for county economic-development goals, adding that it would bring the "type of work and jobs we are trying to bring" and that "the aerospace component is the direction we want to go."
New positions in the company's expanded, consolidated operation will include composites engineers, program managers, skilled technicians, quality control inspectors and machinists, among others.
No one from the public spoke at the recent hearing. No further action on the bonds will be taken by the county until the plan has been approved by the Utah Private Activity Bond Authority, which is scheduled to meet early next year.
GOED's Sullivan said his agency has approved tax-credit incentives of up to $122,454, accounting for about 15 percent of the estimated $816,362 in new state taxes the company will pay over the five-year life of the agreement.
"The total wages, including medical benefits, in aggregate are expected to exceed 125 percent of the county wage," according to a GOED press release. "The projected new state wages over the life of the agreement are expected to be $14,916,129."
Johnson, representing KIHOMAC, said the company does not intend to wait for the final bond approval to start the project. The company will get underway using $5 million in bank loans it has secured.
While the Davis County Commission's name would be attached to the revenue bonds, Johnson said, covenants in the contract will exempt the county from liability.