Zenair of Canada Ltd. won't be coming to Cape Girardeau.

Independent Manufacturing Development Co., a subsidiary of Zenair aircraft company, have notified Cape Girardeau officials that it was terminating its memorandum of understanding with the city and will not put a plant at Cape Girardeau Regional Airport.

Zenair and Independent announced in March that they would start assembling planes in Cape Girardeau within 60 days.

Zenair and Independent, which build single-engine aircraft, said they must abandon their expansion plans because of difficulties with financial arrangements.

The announcement comes less than two weeks after the city voted to issue bonds for improvements to Regional Airport to help with renovation projects and water and sewer improvements at the airport in conjunction with the Zenair project. The city also had received approval for a $600,000 grant from the Missouri Department of Economic Development to help pay for the projects.

"It is unfortunate that IMD did not pick Cape Girardeau for its facilities," said Cape Girardeau Mayor Al Spradling III. "The city did everything it could to support their relocation without taking an excessive security risk. In the end, it appears they needed more investment than the city was able to offer."

The company is now looking to put the plant in Georgia.

The city had proposed to purchase a hangar at the airport here, issue bonds to finance construction of a 40,000-square-foot manufacturing plant and apply for the community development block grant to finance the extension of water and sewer lines to the airport.

The city's plans and request for the grant will now have to be withdrawn, said Walter Denton, assistant city manager.

"This was a big jolt," said Bruce Loy, airport manger, who had worked to bring the company here.

Mitch Robinson, executive director of the Cape Girardeau Area Industrial Recruitment Association, also expressed disappointment.

Said Robinson: "We were so close to having this thing tied up: Bonds had been sold, documents completed, a sewer and water grant approved. Then it got halted. The company had to make a decision as to what was best for it. We understand that and respect their decision."

Robinson complimented city officials for their efforts. "They all worked hard to make it happen," said Robinson. "It just couldn't be done."

Robinson said efforts would continue to bring industry to the airport.

The Zenair plant was expected to bring 100 jobs to the area. Assembly was to have started right away in the vacant hangar.

Zenair has produced aircraft since 1973 and has a plant at Mexico, Mo., where it makes experimental aircraft kits for do-it-yourselfers. The company had announced plans for assembling the new CH2000 light aircraft at Cape Girardeau.

The company had planned to move the complete operation from Canada to Cape Girardeau.