Why Eclipse Landed in Albuquerque

New Mexico Business Journal,  Feb, 2001  by Vern Raburn

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The CEO says the city had what was needed, but some problems still demand solving.

THE STORY OF NEW MEXICO and Aviation began in late 1999. We had sent a confidential solicitation for location proposals to more than 60 cities. Of the early respondents, Albuquerque was a leader. Following several extensive visits during late 1999 and early 2000. Eclipse announced its decision to come to Albuquerque on May 8,2000. Like all journeys worth taking, this announcement was but the first step in what will be a long road to success. Why did Eclipse choose Albuquerque and New Mexico, and how does that decision look after being here for eight months?

When Eclipse started searching for a permanent home, we developed 18 criteria to measure each location's potential. Some of these criteria were obvious, like a great airport (we didn't want to build the proverbial "airplane in a basement and no place to fly it from"), reasonable flying weather, good economic incentives, viable work force, etc. Other things were not so obvious, such as tax laws that did not penalize aircraft manufacturers, a positive political environment, and room for manufacturing facilities growth. Albuquerque really excelled in several of these areas.

Let's take a closer look at the obvious and not so obvious positive factors of this state. Without question, the weather is a huge plus. All we were looking for was reasonable weather, Nearly 340 perfect flying days per year were a tremendous draw to a company that plans to make several aircraft per day. The existence of great facilities at the Albuquerque International Sunport, and almost limitless expansion room at Double Eagle II, were also huge draws. The facilities we now live in at the Sunport represent a tremendous time and cost savings to Eclipse, during a period when both are in short supply. Being able to start business in one place, and then move (as we plan to do in 2005) to a perfect long-term home was almost too good to be true. The accessibility of organizations like Sandia Labs, TVI, and the University of New Mexico was also a big factor in the Albuquerque decision. Between the City of Albuquerque and the State of New Mexico, encouraged by the Albuquerque Economic Development Corporation, the economic incentive package assembled for Eclipse was one of the best offered by any city or state.

But there were some initial problems.

New Mexico did not have a "fly away" sales tax exemption. This presented a serious roadblock to Eclipse. Many states have a sales tax (or in the case of New Mexico, a gross receipts tax) exemption for vehicles that are manufactured, purchased, and delivered to individuals and companies who are not state residents. Thus the term, Fly Away: you buy the aircraft and fly it away to your home state. The logic behind the exemption is straightforward, particularly in a state with a personal income tax. Non-residents should not have to pay taxes for services from which they do not benefit. In fact, some of the surrounding and nearby states, for example, Arizona, Utah, Oklahoma, and Texas, all have such fly away tax exemptions. New Mexico and Colorado did not. If someone bought an Eclipse 500 in, say, New Mexico or Colorado, he or she would have to pay sales tax before leaving the state. Since this tax would have represented a multi-hundred million dollar cost to either Eclipse or its customers, we requested that a g ross receipts sales tax exemption be passed by each state's legislature.

In Colorado, after initial assurances that passage of such relief would not be a problem, the issue became a political football under the moniker of "More Corporate Welfare." However, in New Mexico, a political coalition from both sides of the aisle emerged in the Roundhouse. With Governor Gary Johnson's support and encouragement, Speaker Raymond Sanchez introduced a bill providing for a fly away tax. The legislature wisely realized that the bill did not represent a loss of revenue, since with an aircraft manufacturer in the state, it was a tax that had never been collected. More important, the establishment of an aircraft manufacturer in New Mexico would provide untold long-term benefits to the people of the state. The bill was introduced, debated, voted on, and signed into law within six days. Meanwhile, in Colorado, we were being told to "wait until next year's legislative session, and we'll get it through then"--right. It was at this point that we knew our home was going to be New Mexico.

So now that we have been "home" for nearly eight months, how are things looking?

First, there is not an ounce of buyer's remorse. Virtually every day that goes by, our employees (myself included) grow more in love with the Land of Enchantment. In addition to the glorious vistas, magical skies, and wonderful weather, the people of Albuquerque and New Mexico have opened their hearts and homes to us. In the 10-plus cities I have lived in over the last 30 years, nothing has come close to the feeling of welcome and warmth that I have received in Albuquerque. And our new employees from Vermont, Michigan, Texas, Colorado, Florida, Arizona, and Illinois all feel the same.