Even as the financial turmoil on Wall Street worsens by the day, state and local government officials are determined to keep business in the Beehive State humming.

On Thursday, Lincoln, Neb.-based Duncan Aviation unveiled plans to build a $58 million, 320,000 square-foot repair hangar -- its third full-service center in the nation -- at Provo Municipal airport.

Duncan, which services business and government aircraft operators worldwide, is planning to expand its operations on the West Coast by establishing its first aircraft maintenance center in the region in Provo.

Provo airport is the second busiest municipal airport in Utah after Salt Lake International, chalking up 170,000 take-off and landing operations annually.

The deal, which is expected to bring 650 jobs to Utah, is the result of more than two years of negotiations, and tax and other incentives offered by state and local government, education and economic development groups.

That includes a $6.6 million refundable economic development tax credit that Duncan will receive if it adds the 650 jobs and generates $336 million in new state wages including $22 million in new corporate income tax revenues over the next 15 years.

The credit, approved Thursday by the Governor's Office of Economic Development, is capped at 30 percent of new state revenues generated by Duncan's business over the 15-year period.

The 650 jobs, offering an average wage of $38,396, or wages exceeding 150 percent of the Utah County median wage of $25,597, will be created over the next 15 years.

Gov. Jon Huntsman Jr. at Thursday's event said the deal is all the more significant now because of the uncertain economic climate and an increasingly competitive marketplace.

"The $58 million in capital investment and the $22 million that will go to our state coffers will help support schools, pay our teachers more, build relationships with higher education, and bring students into your company, and train them for the workplace," he said.

"UVU has an existing [150-worker] flight center in Provo, which will be complementary to Duncan's business," said Michael Sullivan, spokesman for the Governor's Office of Economic Development.

Mario Markides, director of flight operations for Aviation Science at Utah Valley University, wants to explore the possibility of developing with Duncan an airframe and power plant training program for aircraft mechanics. The school has between 350 and 450 flight students per semester.

Construction of the 320,000 square-foot aircraft maintenance center will start in spring 2009 and is expected to open by August 2010. At full capacity, the hangar will hold about 40 6- to 15-seat business jets.

Duncan plans to relocate 100 workers to Provo from its two full-service maintenance centers at Lincoln, Neb., and Battle Creek, Mich., by 2010, said Bill Prochazka, executive vice president and general manager of Duncan Aviation.

The company will start hiring for the remaining 550 jobs in 2011 from around the state and region. These positions include airframe and design workers, painters, avionics engineers and other workers for procurement, management, production, cabinetry and interior installation and engine refurbishment.

Why Provo?

Todd Duncan, chairman of Duncan Aviation, said the company's move to Provo was driven mostly by growing customer demand on the West Coast.

"Our site selection criteria was based on our other successful models, and we are excited to have found Provo, a community very similar to those surrounding our Lincoln, Neb., and Battle Creek, Mich., locations," Duncan said in a statement Thursday.

"Provo airport looked attractive to us because the city has done a good job keeping airport encroachment -- or zoning for high density housing next to an airport -- to a minimal," Prochazka said. "Plus we have water on all three sides of our location, which keeps noise to a minimum."

More than 20 cities on the West Coast were considered for Duncan's third major center, Prochazka said. "But what really attracted us to Provo was the cost of living, quality of life and work ethic. We were looking out for the health and well-being of our workforce."

Provo Airport Manager Steve Gleason said Provo appealed to the company because of its "nice, well-run airport with amenities, and [Duncan] doesn't have to compete with international airport traffic."

"This doesn't push Provo toward getting commercial service, but having a big name like Duncan adds an additional layer of prestige to our airport," Gleason said.

He said Duncan's maintenance center will complement the existing 10-plus businesses at the Provo airport. These include UVU's flight school, Million Air, Alpine Aviation, Universal Helicopters and other smaller aviation businesses -- which have a total up to 500 workers at the airport.

Aviation growing

Prochazka said his core clients, mostly Fortune 500 companies that have their own corporate jets, are driven by changes to the airline industry since the Sept. 11 terrorist attacks.

"Since 9-11, with increased security, longer lines, soaring costs of airfares and the poor performance of domestic commercial airlines, more people are driven to using their own aircraft," Prochazka said. "Plus they have peace of mind because they know who they're boarding with."

While the higher fuel costs and deepening economic downturn may be pinching some of Duncan's customers, he said business remains steady.

"They are getting smarter about how they use the aircraft. For instance, unless they are putting four or five executives on a trip, they won't fly. We're seeing discretionary spending on worn armrests, new interiors, dropping. But they are still flying their jets," he said.

Economic cluster

On Thursday, the Governor's Office also approved providing a $250,000 economic opportunity grant from the Industrial Assistance Fund to recruit a Delta Airlines direct flight from Salt Lake City to Tokyo.

"The incentive is aimed at encouraging Delta to move forward with launching a new flight from Salt Lake City to Tokyo, hopefully, by summer or fall of 2009. The incentive is aimed at helping them marketing those flights once it begins," Sullivan said.

"Just like the incentive we provided Delta once the Salt Lake City-Paris direct flight began, we helped them market those flights, and that's become one of Delta's top international flights with a load factor running at 80 percent full. That means every flight from Salt Lake to Paris, and Paris to Salt Lake is running at 80 percent capacity."

The state is planning to focus on aviation and aerospace as an economic cluster, with the proposed business jet maintenance center in Provo, together with Jet Aviation's planned opening of a 600-worker commercial jet maintenance center at the Ogden airport in spring 2009, as well as a Delta hub that's strengthened by its pending merger with Northwest, Sullivan said.