December 2, 2007

MD Helilcopters may be on the Move

by BOB COX Star-Telegram staff writer

MD Helicopters, the Mesa, Ariz.-based helicopter manufacturer, may be looking for a new home, and Grand Prairie could be on the short list.

Unhappy over a proposed rent increase at the company's headquarters at Mesa's Falcon Field, MD executive Lynn Tilton is threatening to move the company that she has spent tens of millions of dollars reviving.

"We made a decision to look around and see who would give us the biggest incentives," said Tilton, chairwoman and chief executive of Patriarch Partners, the New York holding company that owns MD, Heritage Aviation of Grand Prairie and Snelling Staffing Services of Dallas.

Tilton said she has retained the Cushman & Wakefield real estate consulting firm, which will soon issue a request for proposals from cities.

Since she bought the nearly defunct company in 2005, Tilton has pumped cash into the firm to pay off creditors, buy and stockpile parts, and resume production of new helicopters.

The company expects to deliver 33 helicopters this year, up from 13 in 2006, with a goal of producing 80 in 2008.

"The city just quadrupled my rent, and they wouldn't negotiate," Tilton said. "I just created 400 jobs and pulled this company out of the ashes."

Mesa officials have recently come forward with a cheaper proposal, but Tilton said that by then she had already decided to look at other options. She didn't rule out staying in Mesa.

Bob O'Neal, Grand Prairie's economic-development director, said the city has had contact with Tilton but had not entered into any negotiation over terms and incentives.

"We hope they expand their company to Grand Prairie. It's a nice place for Bell Helicopter and American Eurocopter. We think [Mesa] would enjoy it here."

Heritage Aviation, which Tilton bought in 2006, modifies helicopters at its Grand Prairie Municipal Airport location.

Two factors could work against MD moving. The first is that the helicopter industry is enjoying strong demand for new aircraft and parts for old ones, and all manufacturers are struggling to meet the demands. So a move could cause serious disruptions.

And moving the company to Grand Prairie would put it in competition for employees with companies like Bell and Eurocopter, as well as Lockheed Martin and Vought Aircraft Industries.