AvCraft, Horry County reach settlement; company prepares to leave Myrtle Beach headquarters

After more than 10 years in Myrtle Beach, AvCraft Technical Services is preparing to leave its headquarters.

The company and Horry County officials reached a settlement this week that says the aircraft maintenance firm will vacate two of the three county-owned hangars it rents near Myrtle Beach International Airport by March 7. The company must leave the rest of the property by March 22. Barring an 11th hour deal between the county and the business — or a company that purchases AvCraft — the lease will be terminated.

Despite the daunting outlook, AvCraft President Mike Hill said he’s still holding out hope.

“I’m not going to give up until the very bitter end,” he said. “I’ve been doing this for 10 years now and I really like Myrtle Beach.”

For AvCraft, the signs aren’t encouraging.

The company, which averaged between 50 and 60 employees during most of its time in the area, is down to about 15 workers.

“I’ll probably be reducing that further going into next week,” Hill said.

AvCraft also owes Horry County more than $91,000 in rent payments and late fees, according to county records.

As part of the settlement, which was approved Thursday, the eviction could be avoided if the company or its buyer pays AvCraft’s debt to the county by March 22 and agrees to Horry leaders’ leasing terms.

Hill said three companies have expressed interest in purchasing AvCraft, but two of them found the county’s lease rates too high.

County officials have indicated they want to be paid $2.85 per square foot. Hill said that’s too steep.

“I can understand the county’s position,” he said. “They have an asset that belongs to the citizens and they’ve got to look at their best interests. But it’s sometimes difficult to attract business if you don’t understand the market. I’m not sure if they quite understand what the market is right now.”

AvCraft performs maintenance and repair work on small aircraft, and Hill said the demand for services like AvCraft’s is “just really bad all over the country.”

Horry County Council Chairman Mark Lazarus had said he would discuss possible solutions to AvCraft’s troubles with other county leaders, but that was before Thursday’s settlement.

County council meets Tuesday night. Lazarus could not be reached for comment.

AvCraft originally moved to the beach from Tyler, Texas, in 2003 when the Myrtle Beach Air Force Base Redevelopment Authority agreed to reimburse the company up to $750,000 for upgrades at several hangars at the airport. The county also agreed to cut its hangar rent from $5 per square foot to $2 per square foot and S.C. officials chipped in tax credits and job creation credits worth up to $281,600 annually if AvCraft hired 80 workers within its first year.

At the time, AvCraft announced plans to create 280 jobs within five years.

But after one year, AvCraft had failed to meet its projections. The company hired 65 workers instead of the 80 required under the incentives agreement. In response, the county canceled the initial deadline and gave AvCraft another six months to reach the goal. When that new deadline rolled around, AvCraft’s employee count had dropped to 53, and the company’s German production plant had filed for bankruptcy protection.

The company didn't receive the full $750,000 local reimbursement and wound up losing the state incentives because it didn't create the number of jobs it had promised.

AvCraft announced another job expansion — this one for 50 new jobs — in 2009, but the promise didn't pan out and the company came back to Horry County Council the following year asking for a reduction in its hangar rent as the company was on the verge of going out of business.

In 2010, KNH Aviation Services Inc., a group of investors led by Hill, bought all of the company’s assets.

Three years ago, the firm announced it would hire 150 workers in exchange for $200,000 in state and local grants.

When it became obvious that wouldn’t happen, Hill told county leaders about his plight. AvCraft never used any of the grant money made available to the company.

Although the forecast offers little sunshine, Hill did say the settlement provides a parachute if a last-minute buyer is found.

“They did provide a good tool for us to try to do that,” he said of the county. “However, we’re running out of time.”

This story was originally published February 27, 2015 at 5:47 PM with the headline "AvCraft, Horry County reach settlement; company prepares to leave Myrtle Beach headquarters."