Economy & Economic Development  September 14, 2016

Loveland-based Scion Aviation eyeing other cities for expansion

LOVELAND — Upset by what he calls a lack of cooperation by Loveland city officials, the owner of Scion Aviation is exploring sites in several Front Range cities where he can build a new manufacturing facility as business begins to heat up for the 22-year-old company.

At issue is an annexation agreement signed by the city and Scion founder Jim Sampson in 2005. As a condition of annexing Scion’s 35-acre site on the north side of the Northern Colorado Regional Airport into the city, that agreement requires Scion to install a left-turn lane into its property off of County Road 30 if future expansion increases the amount of traffic entering and exiting the site.

Sampson said this week that the requirement is cost-prohibitive for a company the size of his. In the meantime, he said he’s identified sites in Fort Collins, Windsor, Johnstown and Cheyenne, Wyo., that would be suitable for the facility, which he says could initially employ 50 to 100 people.

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Scion currently operates out of a 23,000-square-foot building at 3693 County Road 30, and has 20 employees.

“We’ve chosen not to build here until the city decides to pay for the lane themselves or waive any road expansion fees,” Sampson said in an interview.

Assistant city manager Rod Wensing, who is also the acting director of economic development for the city, said Loveland would be sorry to miss out on such an expansion. But he contends that the city has been flexible regarding the annexation agreement, including amending it last year to accommodate a 12,000-square-foot warehouse that Sampson was proposing at the time. Wensing added that the city would me more than willing to discuss incentives related to the cost of installing the turn lane if Scion were to make a formal proposal on the expansion to the city’s economic-development department. But he said the only discussions with Sampson over the years have been informal.

“We would be happy to help out any way that we can,” Wensing said.

There are actually three companies that operate under the Scion umbrella at the County Road 30 site. Founded in 1994, Scion Aviation is a contract manufacturer of parts and airframes for other aviation companies. Scion UAS, formed in 2011 by Sampson and a group of partners, takes Aviation’s airframes and builds them into unmanned helicopter systems for military and civilian users. Scion Helicopters, meanwhile, spun off last year, is working on a more traditional civilian helicopter for pilot training and utility work.

Sampson said multiple contracts won by Scion in recent months have created an urgent need for the new manufacturing space. In July, Scion won a contract to develop a prototype of Denver-based XTI Aircraft Co.’s TriFan 600 aircraft that is touted to have the speed, range and comfort of a business jet but also the ability to take off and land vertically like a helicopter. Sampson said Scion is also working on a program to begin manufacturing helicopters for Swiss firm Marenco as early as 2018 or 2019. Those deals are in addition to increased demand for Scion’s own unmanned helicopter drones that are largely targeted toward military customers now but could break into several commercial markets as the Federal Aviation Administration incorporates unmanned vehicles into U.S. air space, Sampson said.

Sampson said he expects Scion to eclipse $10 million in annual revenue by the end of next year as revenue from the new contracts comes to fruition. He said he expects that the company will more than double to around 50 employees by the end of next year, adding mostly engineering and other technical positions.

The new manufacturing facility Sampson is hoping to build could be as large as 50,000 square feet. He said it’s likely that the company will need to expand into temporary space while the new facility is built. Scion owns its land adjacent to Northern Colorado Regional Airport, and Sampson said such proximity to an airport is advantageous. But he’s exploring his options.

While the turn lane is a sticking point with the city, he said he’s interested to see what other incentives might be available elsewhere as well.

“Loveland has been anything but cooperative over the 17 years we’ve been in this location,” Sampson said. “Basically, we’re going to put it up for bid, see who wants us the most, let (cities) fight for us.”

Scion’s original annexation agreement with Loveland in 2005 dictated that before the company could acquire another building permit, it would have to install the turn lane. But the city and Sampson last year amended the agreement so that the turn lane requirement would instead be triggered not by a building permit but by the amount of traffic entering and leaving Scion’s site — specifically once traffic exceeds 20 trips per peak hour or 200 total trips per day.

Sampson met with city planners for a concept review meeting last year at which he proposed a 12,000-square-foot warehouse on the site. Wensing said that as long as traffic didn’t surpass the threshold in the amended annexation agreement, such a facility would merely require Scion to pull building permits. But Scion never moved forward with the warehouse, instead shifting its focus to the idea of the larger manufacturing facility.

Sampson said he fears Scion will hit the traffic threshold by the end of this year regardless of what is built.

Wensing, meanwhile, said no discussions were ever had about incentives tied to the warehouse because that in itself wouldn’t likely be eligible for incentives like the larger manufacturing facility that is a significant job-creator would be.

Wensing said the city has several economic-development “tools” it could use to ease the cost of the turn lane for Scion based on the number of proposed jobs to be created. Those include cost sharing, where the city would pay for some or all of the improvements, reimbursement over time, and fee waivers, among others.

But Wensing said Scion has filed no formal economic-development application with the city related to the manufacturing facility. And, unlike the warehouse, the larger manufacturing building would be required to go through a more formal development-review process that would include conducting a traffic impact study.

“From the city’s standpoint, we like manufacturing jobs in the city,” Wensing said. “So we would look forward to looking at his proposal and then coming up with the appropriate incentive package that would address these types of things. … We need more information to better understand what his project is and what he wants to do.”

The Northern Colorado Regional Airport, jointly owned by the cities of Loveland and Fort Collins, set up an airport commission last year tasked with development and growth around the airport, as well as oversight of airport operations as a whole.

Airport director Jason Licon said the commission obviously tries to encourage aviation uses both on airport property and adjacent to it. But he said the commission is so young that it doesn’t have much precedent set yet for how it might get involved with companies like Scion that want to locate or expand on airport ground or, in this case, adjacent to it.

“We would be happy to help out any way that we can,” Licon said.

LOVELAND — Upset by what he calls a lack of cooperation by Loveland city officials, the owner of Scion Aviation is exploring sites in several Front Range cities where he can build a new manufacturing facility as business begins to heat up for the 22-year-old company.

At issue is an annexation agreement signed by the city and Scion founder Jim Sampson in 2005. As a condition of annexing Scion’s 35-acre site on the north side of the Northern Colorado Regional Airport into the city, that agreement requires Scion to install a left-turn lane into its property off of County Road 30…

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