Denton is closer to landing an AI drone company after the Economic Development Partnership Board on Wednesday recommended the City Council approve about $900,000 in incentives.
KrateoSky, founded last year, plans to manufacture drones for intelligence, industrial and national security uses. The proposed incentives include a property tax rebate of 65% for eight years, a 50% sales tax rebate on construction materials, a $227,000 grant tied to jobs and a $50,000 headquarters grant.
In exchange, KrateoSky says it will make an estimated $23.5 million total capital investment and bring an estimated 258 new jobs to the area as well as 317 “spin-off” jobs. Those jobs include production technicians, supply chain and warehouse staff and production engineers.
City staff also recommended approval by the City Council.
The City Council will vote on the project Tuesday night.
“I just wanted to tell you our city is so unique and so cool,” council member Vicki Byrd told the representative from KrateoSky on Wednesday. “The thing about your location is it’s in my district. So I’m excited to see that not only are we excited about our downtown area, our northwest area, you know everything’s going west, everything’s going north.
“With you all being over there, you’re going to help drive more interest over to the eastern sector of our community.”
KrateoSky wants to lease a 167,874-square-foot building at the 288/380 Logistics Park off Mingo Road and plans to improve the property with an office space build-out, facility modifications, power distribution upgrades and testing equipment.
City staff reported that the property’s current estimated value is $16.5 million and expects it to increase to $35.3 million with KrateoSky’s renovations, according to an April 15 presentation.
KrateoSky calls itself an “AI-native aerial robotics enterprise.” A presentation to the Economic Development Partnership Board said it is a dual-use drone manufacturer focusing on both military and commercial markets.
KrateoSky has been exploring Texas sites for a large-scale manufacturing facility to establish the company as a producer of autonomous aerial robotics.
The facility in Denton would design, produce, test and refine the company’s products.
Ellen McCarthy, KrateoSky’s senior vice president of global government affairs, told board members Wednesday that the company has been looking at Texas due to the favorable business environment.
“We want to make sure we can hire talented people,” McCarthy said. “This is a location where we can do that.”
McCarthy pointed out that the unmanned aerial system (UAS) industry is a fractured one that struggles to build to scale. KrateoSky wants to unify it by manufacturing to scale and quickly.
KrateoSky isn’t just offering assembly jobs but high-tech positions. As the UAS ecosystem grows and advances, McCarthy said, the jobs will do the same.
“This is an industry growing and advancing at a very rapid pace,” McCarthy said.
A veteran, McCarthy recalled when she was in the U.S. Marines and all of a sudden, they were learning how to fight urban warfare. Then she went to Iraq “the second time,” and IEDs, or improvised explosive devices, were everywhere.
“Now it’s drones,” McCarthy said. “We want to make sure our service members are safe, and our country is safe.
“That’s an important mission for our company. I don’t want to sound political or anything like that, but I think it’s important. Being in Denton, being in a place where we can really partner with the community, is important for our success.”
CHRISTIAN McPHATE can be reached at 940-220-4299 and cmcphate@dentonrc.com.
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