DULUTH — The Duluth Economic Development Authority called a special meeting for noon Wednesday to allow Cirrus Aircraft to proceed immediately with its expansion plans.
Authority members have been united in their support for a proposal to lease an aircraft maintenance, repair and overhaul (MRO) facility formerly occupied by AAR Corp. at Cirrus for up to 16 months at a cost equivalent to the costs of owning the building, including property taxes. At the end of this period, Cirrus will have the option of purchasing the facility for $1.
The MRO building is owned by DEDA and has remained almost entirely vacant since AAR left Duluth, resulting in the loss of over 240 jobs in May 2020 as the commercial airline industry reeled due to of the COVID-19 pandemic.
SEE ALSO: AAR to close Duluth airline repair plant
Maintaining the cavernous building with its complex fire suppression systems, in the absence of a suitable tenant, costs DEDA about $57,000 to $58,000 a month, said division manager Chris Fleege. planning and economic development in Duluth. The highly specialized facility was designed to service large commercial wide-body jet aircraft.
But Cirrus is set to invest about $3.6 million in the structure, converting it to house office and operations staff and freeing up space on the south side of a current facility at the company for increased manufacturing capacity.
The aircraft maker already employs more than 1,200 people in Duluth and plans to hire at least 80 more to meet growing demand for its piston-engined and jet-powered aircraft for general aviation.
Cirrus will get local help to advance its plans. The city and county of St. Louis agreed to reduce future property taxes by $600,000, for a combined tax relief of $1.2 million.
However, a procedural error will force the Duluth City Council to retake the tax abatement request that councilors thought they had already approved earlier this week. This special pending meeting with a public hearing at the start is scheduled for March 1.
Additionally, Cirrus is applying for $500,000 in assistance from the Minnesota Job Creation Fund and a $1.5 million forgivable loan from the Minnesota Investment Fund.
If the sale of the MRO building goes through, the City of Duluth will also be asked to provide Cirrus with a forgivable loan of up to $300,000 to cover the cost of removing and properly disposing of fire-fighting foam from the building. installation containing materials that are difficult to break. -per- and polyfluoroalkyl (PFAS) chemicals which have been reported as a public health concern in recent years.
DEDA Commissioner and Duluth 3rd District Councilman Roz Randorf said Cirrus’ occupation of the MRO building could save DEDA nearly $700,000 a year, allowing the authority to redeploy those funds to d other valuable economic development purposes.
“Imagine all the other things DEDA could invest in,” she said.