R.I. Commerce approves $13 million in tax credits for ‘seaglider’ startup

REGENT CRAFT INC. received approval on Wednesday, June 1, 2022, from the R.I. Commerce Corp. for up to $13 million in state tax credits to establish 300 jobs in Rhode Island. / COURTESY REGENT CRAFT INC.
REGENT CRAFT INC. received approval on Wednesday from the R.I. Commerce Corp. for up to $13 million in state tax credits to establish at least 300 jobs in Rhode Island. The company is developing an electric-powered “seaglider.”/ COURTESY REGENT CRAFT INC.

PROVIDENCE – The R.I. Commerce Corp. on Wednesday unanimously approved $13 million in tax incentives for Regent Craft Inc. to move from Massachusetts to Rhode Island.

The startup expects to eventually create at least 300 jobs tied to the development of its electric-powered “seaglider” as a new mode of regional transportation, with the goal of serving commercial passengers by 2025.

Commerce’s board voted 8-0 to support a 10-year deal with Regent through Rhode Island’s Qualified Jobs Incentive Tax Credit program. To qualify, the company would be committed to creating 100 net new jobs in the state by January 2026, another 100 jobs in the following year and another 100 jobs (for a total of 300) in the third through 10th year.

William Cox, vice president of business development and investments for Commerce, touted the promise of Regent’s seaglider technology. Cox highlighted the fact that the venture raised $27 million as of January with a Series A funding round still ongoing. Regent is being supported by a financing campaign led by Thiel Capital and JAM Fund, with support from financiers who include Dallas Mavericks owner Mark Cuban, Mesa Air Group, Y Combinator, Founders Fund, Caffeinated Capital and Fitbit founder James Park.

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“This is an opportunity to land a rapidly growing, high-tech transportation company in the blue economy, bringing high-paying, long-term jobs, continuing a strong tradition of maritime innovation and excellence in the Ocean State,” Cox said. “The applicant has a very exciting growth expectation based in no small part due to their ability to raise private capital.”

Commerce said Regent’s relocation to the Ocean State would involve direct investment in a new facility, machinery and equipment totaling an estimated $367 million. The startup, which is partnering with a composite manufacturing, research and development firm in Bristol called Moore Brothers Composites Inc., is currently located in Burlington, Mass. Regent said it’s planning to lease land in the Quonset Business Park in North Kingstown and build a hangar, with the move set to begin this summer.

Michael Klinker, co-founder and chief technology officer for Regent, expressed confidence to the board about his company’s ability to bring its technology to the market, while currently at the prototyping stage for the plane-like vessel that hovers above the water and can cruise at 180 miles per hour. The seaglider would also require federal approval as a form of commercial transportation, with the company stating that it’s seeking certification of seagliders as a maritime vehicle through the U.S. Coast Guard, along with the Federal Aviation Administration.

“We have high confidence,” said Klinker, an MIT-educated engineer who co-founded the company in December 2020. “The class of vehicle that we’re designing is really a combination of a lot of technologies that exist today.”

REGENT CRAFT INC., represented by co-founder and chief technology officer Michael Klinker, received approval on Wednesday, June 1, 2022, from the R.I. Commerce Corp. for up to $13 million in state tax credits to establish 300 jobs in Rhode Island. / PBN STAFF PHOTO / MARC LAROCQUE
REGENT CRAFT INC., represented by co-founder and chief technology officer Michael Klinker, center, received approval on Wednesday from R.I. Commerce Corp. for up to $13 million in state tax credits to establish 300 jobs in Rhode Island. / PBN STAFF PHOTO / MARC LAROCQUE

Klinker said the challenge he sees for his company moving ahead is the logistics and financing needed to transition from prototyping to full-scale production, while capitalizing the technology. The maritime vessel requires approval from the Federal Aviation Administration and the U.S. Coast Guard, the company said.

Cox said “the excitement about this company” is also highlighted by the 325 preorders Regent has received for their fully developed 14-person, zero-emission transport vehicles, which the company calls “faster than a ferry” at half the operating cost of a plane. Klinker said Hawaiian Airlines made strategic investments in Regent, along with another airline, and European ferry companies have been “extremely excited” about what the company is doing.

Cox said the 10-year deal with Regent could also provide the company with additional tax credits if it goes beyond the 300-job target outlined in the agreement.

“These commitments are far below this company’s business plan, thus we have built in an accordion feature to provide them with tax credits for each tranche of 50 net new jobs that they’ve created above the base levels,” Cox said.

Michael F. McNally, a board member who chairs the Commerce Corp. Investment Committee, said Rhode Island taxpayers are “fully protected” by the deal, explaining that the state only provides the tax relief after the jobs are created and W-2s are generated.

The Qualified Jobs Incentive Tax Credit was established by the General Assembly in 2015 and is administered by R.I. Commerce Corp., providing companies with credit against corporate income taxes based on the amount of full-time jobs they establish in the state. (Earlier this year, a company called Flux Marine Ltd. in East Greenwich that makes electric outboard boat engines received a Qualified Jobs Incentive Tax Credit deal worth an estimated $1.9 million to stay in Rhode Island, rather than move to Connecticut.

McNally also said the Rhode Island jobs created by Regent would have a median salary over $150,000.

“You can’t lose,” McNally said. “It’s great. Commerce deserves a lot of credit.”

Larocque@PBN.com. You may also follow him on Twitter @LaRockPBN.

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