News that Texas-based Otto Aviation had short-listed Jacksonville as a site for its proposed $430 million manufacturing and production facility drew praise May 19 from community leaders after the Jacksonville Aviation Authority board approved a $34.9 million package of investment and incentives for the project.
The private company is considering moving its headquarters to Jacksonville, where it would open at Cecil Airport in a two-phase plan in which Otto would first build-out in a vacant hangar previously used by the Boeing Co. and then construct a new plant on 80 to 90 acres of property at the airfield.
Otto, which is developing a corporate jet it aims to bring to market in 2030, says it plans to employ a workforce of 1,200 who would earn an average salary of $90,000, not including benefits. The company was identified as Project Bluebird in incentive requests from JAA, the city of Jacksonville and state of Florida.
“It’s a fantastic deal for our community, for JAA, for the city of Jacksonville and for local industries and families alike,” said Jacksonville City Council member Nick Howland, the Council’s liaison to the JAA board.
“It’s further establishing Cecil as an aerospace and defense cluster. Creating aerospace and defense jobs is critical to Jacksonville’s future growth, and Project Bluebird goes a long way in doing that.”
JAA board Chair Michelle Barnett joked with Otto possibly relocating to Florida, saying “What that means to me is that things aren’t always bigger and better in Texas.”
“Short and sweet, this is the biggest project on the history of the aviation department and probably Jacksonville,” said JAA CEO Mark VanLoh. “I mean, you’re talking a $400 million investment. They’re going to be building airplanes in Jacksonville, something that no one has ever thought of before.”
He said JAA officials will travel with Otto to the June 16-22 International Paris Air Show, an aviation event that brings together stakeholders from across the industry.
“We’re going to announce this deal to the world,” VanLoh said.
Otto Aviation incentives
The JAA board voted 7-0 to approve an incentive package that comprises:
• A $22.5 million investment by JAA for site preparation and design/construction to extend taxiway E-1 to the property where Otto plans to build its facility.
• Abatements on rent and common area maintenance fees on Hangar 825, worth $3.73 million.
• Rent credits on Hangar 825, worth $1.5 million.
• Abatements on rent and common area maintenance on the development site for the new plant, worth $7.18 million.
On May 12, the Mayor’s Budget Review Committee voted to allow the city Office of Economic Development to file legislation with the city of Jacksonville to add a 20-year, 75% Recapture Enhanced Value Grant of up to $20 million on $140 million in tangible personal property at the facility, such as machinery and office equipment.
That legislation is expected to be filed by May 21 on a timetable that would put it up for a full Council vote in June.
Howland praised JAX Chamber economic-development division JAXUSA Partnership, the Office of Economic Development and others involved in creating the incentives packages. He said he was pleased that the city request did not involve completion grants that would be drawn from the city’s general fund, a pot of tax revenue that pays for a broad array of city services.
Although the city will give up incoming tax revenue from the REV grant, it will not have to expend money from the city budget to supply the incentive.
“I’m excited that the incentive split is a little bit higher” on JAA’s side, Howland said. “JAA is truly co-investing in this city to create jobs and bring a wonderful business to the city.”
Howland said JAA has amassed about $300 million in reserve funds, which is proportionally more than the city’s reserves. Therefore, he said, it was appropriate for JAA to contribute more to recruit Otto.
“JAA is over-reserved, so a dollar from the airport is cheaper than a dollar from the city,” he said.
The city's chief communications officer, Phil Perry, said in an emailed statement that Mayor Donna Deegan is "committed to growing Jacksonville's aerospace industry with an eye toward industries of the future, from defense technology to hypersonic air travel."
"The addition of sustainable passenger jet manufacturing is another exciting step in that direction that will deliver good-paying jobs and new business opportunities."
In an emailed statement, JAXUSA President Aundra Wallace said the organization was grateful to JAA for supporting the project and would "look forward to the legislative process with the City of Jacksonville.”
About Otto Aviation
Otto says its jet, the Phantom 3500, is a “super-midsized” twin-engined craft with a lightweight, low-drag design that burns up to 60% less fuel than rival jets while producing 92% less emissions.
Aircraft in the super-midsized category typically carry eight to 10 passengers.
The company developed the plane based partly on testing of its experimental Celera 500L, a propeller-driven aircraft with a distinctive fuselage shaped more like a football than the standard tube-style design. The shape is designed to reduce drag and maximize fuel efficiency.
Jay Cunio, chief development officer for JAA, told board members that through a three-year flight testing program, Celera provided proof of concept for the Phantom jet.
“They have an aircraft that has logged hours and has been successful,” he said.
Cunio said Otto also impressed local officials through “demonstrated ability to raise capital,” but he declined to answer a question seeking details about how the company had displayed that ability.
Cunio said JAA’s investment in the taxiway extension would not only serve Otto but would open the eastern portion of Cecil to further development.
Could draw more companies
Adam Slepian, Otto’s chief strategy officer, said the plant could draw related companies to Jacksonville. He said the company would likely encourage its suppliers to co-locate to the city, where final assembly of the aircraft would take place.
Slepian said Otto looked at about 50 cities over time before narrowing the list.
He has declined to say how many other cities Otto is considering as finalists, or whether the company has been offered other incentives.
“We’re really happy and hoping to wrap this up. We are definitely interested in tapping into Jacksonville,” he said.
He said the immediate availability of Hangar 825 was part of what attracted Otto to Jacksonville during a yearslong process to identify sites. The 116,478-square-foot hangar includes a 59,939-square-foot ramp and 19,159 square feet of parking.
Otto draws its name from that of its founder, William “Bill” Otto, who established the company after previously starting a successful company that analyzes evidence at crash sites to determine the cause.
Otto’s website says Bill Otto traveled extensively in his business and became frustrated over the high costs and significant environmental impact of private air travel.
The company’s board is chaired by former Boeing CEO Dennis Muilenburg and includes such members as Mike Pompeo, former U.S. secretary of state and CIA director, and Marion Blakey, former FAA administrator.