Devils Lake is terminating a lease agreement with a Minnesota kit airplane manufacturer that promised 2 1/2 years ago to move to the city but never did. The state of North Dakota likely will try to recoup $150,000 invested in the project.

The Devils Lake City Commission on Monday night voted to end its agreement with Hensley Aircraft Inc. that allowed the company to lease a city-owned hangar at the airport.

"Their (Hensley's) fundraising has not gone as quickly as we hoped it would, and we felt that terminating the lease would give the Airport Authority the option to market that building … that's been sitting empty for two-plus years," Mayor Fred Bott said in an interview Tuesday.

Hensley Aircraft announced in February 2005 that it would move from Wayzata, Minn., to Devils Lake, eventually creating as many as 35 jobs. President Robert Hensley, a University of North Dakota graduate, said at the time that Devils Lake operations were to start that March.

Hensley officials did not immediately respond to telephone and e-mail requests for comment on Tuesday.

The Hensley Aircraft Web site describes the company's product as a four-seat, twin-engine, sport aircraft called the Wolf. In an undated "update" on the site that introduces the 2007 Wolf aircraft, Robert Hensley states: "We readily acknowledge the long and thoughtful process to bringing a significant new aircraft project to both the national and international marketplace; and highlight the economic potential it represents to … all the anticipated beneficiaries of the North Dakota-based, national enterprise zone we anticipate creating exclusively for homebuilt aircraft."

Bott and Dean Reese, chief executive officer of the state Department of Commerce's North Dakota Development Fund, said a Hensley official traveled to Devils Lake to meet with local and state officials in August, and talked about efforts to raise money.

But Bott said the city does not want to let the hangar remain idle any longer. "We got no indication of when (Hensley Aircraft) would have the funds they would need in order to move in and use the hangar," he said.

Hensley would be welcome to locate in the city in the future if the company's finances are in place and a building is available, Bott said, but for the time being the city is terminating the lease. He said the city is owed "a few thousand dollars" in rent and will use that as the basis for ending the agreement.

The state development fund and Bank of North Dakota each invested $150,000 in the project, Reese said. Only half of the $300,000 total has actually been given to the company, he said.

Reese said officials will be contacting Hensley, now that Devils Lake is ending its lease agreement.

"Our funds are to be used in North Dakota," he said. "If they don't have an operation in North Dakota, we have the ability to recall our investment."