The Duluth Economic Development Authority on Friday will consider leasing hangar space at Duluth International Airport formerly occupied by AAR, and before that by what is now Delta Airlines, to a company planning to upgrade F-16 fighter jets for the U.S. government.
According to the DEDA agenda, Ogden, Utah-based Borsight, Inc. is considering signing a one-year lease for the base where AAR maintained jetliners until the company closed the facility in May amid the COVID-19 pandemic. The facility employed 350 people as recently as last year.
Borsight is bidding on a contract with the U.S. Air Force to upgrade F-16 fighter jets. The contract is contingent on Borsight finding space to do the work. The Air Force is expected to make a decision early next year on the contract.
Chris Fleege, director, planning & economic development for DEDA, said Borsight will likely ramp up local employment over 6-to-8 months with "up to 100 FTE’s when at full operation." Fleege said employment will be dependent upon U.S.Air Force releasing jets to Borsight.
According to the resolution on DEDA's agenda, Borsight would pay the city $126,825 per month to lease the space for one year.
If approved, Borsight would have until the end of next March to move in and get to work.
“Because of the vagaries of the federal process they will not know until after the bid award how much work will be included in the award,’’ the DEDA resolution said. “And until the bid is awarded, they will not know whether they need the leased space or not. But they are required, as part of their proposal, to have in hand a commitment that they will have the physical facilities to fulfill the contract.”
“Borsight has also indicated that there is a possibility that, depending on the progression of the federal contract and the way the work progresses In Duluth, this Lease could serve as the basis for a longer-term relationship,’’ the resolution said.
Duluth-based Cirrus Aviation is currently using a portion of the space to store planes and parts. The resolution states that Cirrus could continue to use 36,000 square feet of the 189,000-square-foot building if Borsight comes in, at least until Cirrus' current lease on the building expires.
A Borsight official in Utah told the News Tribune that the negotiations are in the early stages and details are unclear.
Borsight currently has contracts to upgrade both LC-130 military transports and KC-135R military air tankers.
Some 4,604 General Dynamics F-16s have been built since the plane entered service in 1978. The planes are being phased out of active Air Force duty by newer F-35s. But many F-16s are still part of the active U.S. air arsenal, including the Duluth-based 148th Fighter Wing of the Minnesota Air National Guard.