by Michael Bush,

managing editor

Quartz Mountain Aerospace, formerly Luscombe Aircraft Corporation, is the company that first came to Altus in 1997 to manufacture single engine, high wing, all metal aircraft. At that time, the City of Altus was the recipient of a Community Development Block Grant/Loan totaling $500,000. The award was to be used for wastewater improvements to support the start-up of Luscombe. The grant/loan award was to permit Luscombe to create 503 new positions over 36 months.

It was also said at the time that additional funding for the project would be provided by the City of Altus Economic Development Authority, Oklahoma Industrial Finance Authority, Altus Southwest Area Development Corporation, Southwest Technology Center and the company.

Over the years since Luscumbe/QMA has been in Altus, they have sought money on several occasions from various banks and other entities including the City of Altus. On Jan. 15, one of their creditors, First National Bank in Altus, finally filed a lawsuit against QMA in Jackson County District Court for money owed from two different loans. The suit also names, among others, the Altus Municipal Authority. The suit seeks foreclosure action against the aircraft corporation in connection with loans of $250,000 in 2005 and $200,010 in 2006. The suit also calls for earlier bank loans to be paid off ahead of later loans provided through the Municipal Authority.

Because of this, the Altus City Council/Municipal Trust Authority authorized City Attorney Catherine Coke to respond as necessary to the lawsuit.

Aside from what they may owe for fees, utilities and other loans, how much does the now failing Quartz Mountain Aerospace really owe the City of Altus? Altus City Attorney Catherine Coke said at this time she really doesn't know, only citing definitively the $200,000 promissory note that was due to them on Dec. 4, 2008 for a loan they granted to help QMA meet payroll in September 2008.

But according to minutes of the Altus/Southwest Area Economic Development Corporation Board of Directors annual meeting held Aug. 21, 2008, QMA owes another $220,000 for a “short term working capital” loan to the corporation. They were awarded the 6-month loan after initially asking for $1 million. That’s just one week before asking the Altus Municipal Trust Authority for $1 million, and less than two weeks from the time the AMTA, in a special called meeting, voted 5-3 to loan them $200,000 to meet payroll.

Those voting to grant QMA $220,000 at the EDC meeting before the special called meeting for another $200,000 included Altus Mayor T.L. Gramling, City Administrator Mike Nettles and City Councilman Dean Garrett.

In any case, QMA could be seeing more lawsuits against them in the near future if money owed the City isn’t produced soon. As for the City being named in the First National Bank loan, Coke said she filed an entity of appearance on Feb. 3 on behalf of the Trust to extend them another 20 days to prepare their case in the FNB lawsuit. She also said that the Altus/Southwest Area Economic Development Corporation isn’t really a part of the “City of Altus” so the $220,000 awarded QMA in August wouldn’t be added to the final total amount owed the City.

When QMA asked the City for the loan in September 2008, Mark Arciero CEO of QMA told the Trust Authority that there was 5.6 million dollars in assests at Quartz Mountain Aerospace, but when questioned about how much of that was pledged against it, he answered, “about 2.3 million.”

When the AMTA finally agreed to loan QMA money to cover payroll, another concern was raised by the board about whether or not QMA had plans to move the company to its Coffeyville, Kan., location. Mayor Gramling expressed his extreme disapproval for QMA moving part of its facility to the Kansas area, “because it took jobs away from Altus citizens and we (the Mayor and City Attorney, Mike Nettles) had no idea you all were doing that until the deal was almost done!” he said.

QMA entered into an agreement with Coffeyville Industries that began on July 1, 2008.

The contract was said to provide manufacturing space for the aircraft maker to expand its operations into the state of Kansas and the hiring of staff for start-up at the new facility.

Arciero’s claims about being able to repay the City are built upon a supposed investment endorsement between Riviere Jenson Securities, Ltd. of Austin, Texas, and QMA for $120,000,000.

First National Bank representatives have refused comment saying only, “What’s public record is public record.” Representative from Quartz Mountain Aerospace has not responded to phone calls or e-mails.

For those wishing to read entire minutes from both the Aug. 21, 2008 Economic Development Board meeting and the City Council meeting on Sept. 2, 2008, they can be downloaded from www.prowlingowl.com.