MINOT, N.D. — SkySkopes, a drone flight operator based in Grand Forks, N.D., was awarded a $375,100 forgivable loan to assist the company in establishing a Bakken operations office.
The Minot City Council voted unanimously April 4 to approve granting the loan that would draw funding from the city’s MAGIC Fund, a growth fund used for mainly economic development that is financed by a 1 percent city sales tax.
SkySkopes leadership sought the loan from the city to kickstart the company’s expansion to Minot, nicknamed the “Magic City.” The company was recruited as part of the Minot Area Development Corp.’s Magic Sky Initiative, which seeks to establish the city as a headquarters for unmanned aircraft systems activity in western North Dakota.
“As a part of MADC’s Magic Sky initiative, MADC is pursuing the whole UAS industry, from drone manufacturers to cyber security and data analysis companies to end-users,” Stephanie Hoffart, president and CEO of MADC, said in a statement. “Securing SkySkopes was the first step of MADC’s Magic Sky initiative, and we hope it’s only the beginning of UAS businesses expanding to Minot.”
In SkySkopes’ loan application, the company said it would use the money to make investments in its Minot location, including drone and sensor purchases. SkySkopes President and CEO Matt Dunlevy says the Minot location would be a staging area for flight operations focused on oil and gas infrastructure and other energy assets. Unmanned aircraft are expected to play large roles in those industries as they can be used to inspect infrastructure more efficiently and safely than traditional methods.
Using the funds as a financial foundation, SkySkopes notes that it will create 15 full-time jobs in the next three years. Job creation is one benchmark the company is expected to meet as a condition of its loan. Should SkySkopes miss an annual benchmark, it would be required repay $125,033. If the company fulfills all benchmarks stipulated in its agreement with the city, the loan would be forgiven.
Other terms of the loan include require SkySkopes to give proof of contributing operating capital to the office and to turn over any assets purchased with the city funds to the MADC should the company be sold, change ownership or file for bankruptcy.
In order for money to be released from the MAGIC Fund, SkySkopes needs to provide the city with proof that it has raised $500,000 in equity.
SkySkopes announced its expansion to Minot in December. During a Dec. 19 press conference, the company also noted it has started a partnership with regional civil engineering firm Ackerman-Estvold.The company also is working with the Minot Fire Department in determining how drones could be used to meet emergency response needs in Minot and western North Dakota.