PteroDynamics Inc. signed a contract for industrial space in Colorado Springs for a research and development facility to build its vertical takeoff and landing aircraft, an agreement that came a day after the state approved an economic incentives package this month, the company CEO said.

“We’re ramping up to deliver aircraft by next June, so we needed our own facility to focus on research, development, engineering and testing,” CEO Matthew Graczyk said in an interview Thursday.

The company is to create up to 186 jobs in El Paso County in the next five years., under terms of its tax incentives. The jobs pay an average annual salary of $120,645 for engineers and business administrators.

PteroDynamics’ mailing address was in Southern California, but Graczyk said it has been “virtual” company for the most part, with employees and locations near supply chains in Nevada, Massachusetts, California and Oregon.

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“No one in the aerospace industry is doing it like us,” Graczyk said. “The Transwing is our key innovation.”

The Transwing aircraft holds helicopter-like blades horizontally for takeoffs and landings, but then can quickly fold into a fixed-wing position where the blades turn into propellers. The design allows for longer flights with larger payloads, according to the company.

Colorado’s Office of Economic Development and International Trade on July 15 approved up to $2.5 million in job creation tax rebate incentives. El Paso County chipped in some payroll tax rebate incentives.

“We don’t look at those incentives as free money,” Graczyk said. “We look at that as a way for us to attract better talent and pay a better wage. For our company, the people are everything.”

Lt. Governor Dianne Primavera in a statement said state officials “are thrilled that PteroDynamics is joining the Colorado aerospace ecosystem,” noting “Colorado possesses a unique blend of military installations and commands, private aerospace companies, academic and research institutions, and government entities. This unique environment has made Colorado the top state in the nation for private aerospace employment per capita and second in total private aerospace employment, helping launch amazing innovations.”

PteroDynamics recently secured a “large contract” from the federal government, but Graczyk said he was not authorized to speak about it publicly.

“This is a seminal contract for us as we beat out 65 other aircraft designs,” he said.

Last year, the company received a $49,495 research grant from the U.S. Air Force, according to public records.

Graczyk said a nationwide search led to Colorado Springs because of the airplane-friendly environment and community, as well as the talent pool and close proximity to airplane part suppliers,.

“One of the most important things for us was how many days can we be in the air flying, 365 hopefully. So we had to look at precipitation, rainfall, snowfall, temperatures – those climatic things,” he said. “But we also looked at regions that were pro-drone or anti-drone.”

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The company focused on military uses first because “that’s where the need is the greatest,” Graczyk said, adding it’s a little easier regulation-wise to get aircraft flying for military uses, as opposed to civilian or passenger craft that brings in Federal Aviation Administration oversight.

“We are thrilled that Colorado Springs’ commitment to the aerospace industry, our specialized workforce, and our strong business climate made this region the right choice for PteroDynamics,” said Cecilia Harry, Chief Economic Development Officer of the Colorado Springs Chamber & EDC. “We are beyond excited to support their initial footprint in the region and help them grow as they integrate into our business community.”

Editor Tom Roeder contributed to this report.