Cirrus to invest at least $7 million in former Duluth aircraft maintenance base
The remodeled facility will become the company's "Innovation Center of Excellence."
DULUTH — Cirrus Aircraft announced its plans Monday morning to transform the former Northwest Airlines maintenance base into a new research and development facility dubbed the "Innovation Center of Excellence."
The Duluth Economic Development Authority recently agreed to sell the 189,000-square-foot building, sitting on 39 acres, to Cirrus for $1. As part of the sales agreement, Cirrus pledged to invest substantially in the facility and to bring more jobs to Duluth.
The company is obligated under the terms of that agreement to sink at least $7 million into the building.
“Investing in this facility aligns with our strategy of growing our presence in Duluth, advancing our local community and creating a world-class innovation center,” Zean Nielsen , CEO of Cirrus Aircraft, said in a news release. “The Innovation Center is set to become the epicenter for personal aviation engineering and attract top talent from around the globe.”
Cirrus Aircraft aims to begin renovations by September. The site of the future Innovation Center was formerly the maintenance, repair and operations building which housed AAR and Northwest. The hangar is set up to service much larger airplanes, Nielsen explained, so this equipment will be removed to make the space more suitable for Cirrus operations.
The additional office space, innovation labs, experimental space and structures are anticipated to be ready to shift its current 300 engineers, scientists and technicians into the newer facility by late December, he said. The additional space will free up 70,000 square feet for future expansion.
"From concept and idea, to execution gets way shorter and much tighter because they're all together under the same roof and the same building," Nielsen said. "This investment solidifies our commitment to continue innovations. This is obviously a very large building for all our engineers. The fact that we're doubling down on Duluth is just a testament to the fact that we love the city and we love our people here. We want to continue to grow our presence and our environment for our wonderful staff here."
Cirrus is already Duluth's largest manufacturing employer, with more than 1,200 people on its payroll. It has promised to maintain the size of that local workforce and bring at least another additional 80 engineering jobs to the city in the next three years.
To attract and retain talent, Cirrus has a focus on the financial, physical and mental well being of current and new employees, Nielsen said. In recent years, wages have seen a bump, various fitness clubs are sponsored by the company and corporate events are making a return at Cirrus, he added. The company also partners with Lake Superior College and the University of Minnesota-Duluth for tuition support and continued education credits for employees.
"Duluth has less than 3% unemployment. Being able to find all the labor in all the various functions is challenging in Duluth. It is a rather small labor market. At the rate we're expanding, we need to look at multiple locations. The majority of our people in Duluth are in production. We have opened up engineering and service hubs elsewhere in the country," Nielsen stated.
Cirrus has operations in five other states, but Duluth remains its largest place of employment.
Cirrus was purchased by China Aviation Industry General Aviation Co., a division of the state-owned Aviation Industry Corp. of China, in 2011, and some have questioned Duluth's decision to subsidize a business owned by Chinese government interests. At a recent meeting, 1st District City Councilor Gary Anderson asked if company ownership concerns should give the city pause in its decision to sell the air base at such a discounted price.
Noah Schuchman , Duluth's chief administrative officer, defended the deal, saying Cirrus is "a company with decades of history in the city of Duluth, and it employs a significant number of people in the community. What I can tell you is this transaction will result in millions of dollars of investment in a currently empty city-owned facility."
"Ninety-five percent of all the parts for the airplanes come from American sub suppliers. We pay taxes here. We're founded in Baraboo, Wisconsin. As far as I'm concerned, we are as American as apple pie," Nielsen said.
The former airbase located at the Duluth International Airport has sat mostly vacant since May 2020, when its last tenant, AAR Corp. , ceased aircraft maintenance, repair and overhaul operations, due to pandemic turbulence in the airline industry.
The empty facility had been a financial drain on the Duluth Economic Development Authority, which owned the building, with those costs amounting to about $57,000 per month, according to Chris Fleege , director of Duluth's planning and economic development division.
Fleege believes the company's continued investment in new local facilities bodes well for the future and said, "It really does solidify Duluth as their corporate headquarters."
"We love Duluth and everything that it has to offer. From a testing facility perspective, when you test an aircraft, you'll be able to deal with the harsh environment of the Duluth winter. You'll definitely make an airplane that can pretty much handle any location that our customers would want to store or fly their airplane. It's just one of the many factors," Nielsen said.
The Duluth City Council unanimously voted Sept. 12 to support the sale of the former air base to Cirrus. On Aug. 24, the Duluth Economic Development Authority approved the agreement authorizing the sale of the former Northwest Airlines facility with a 60-year ground lease, releasing the DEDA’s ownership of the facility and the ongoing financial burden. The sale will save the city over $600,000 annually in maintenance, operating and tax expense, according to a release.
In a statement, Duluth Mayor Emily Larson said: “Duluth and Cirrus Aircraft have a long and important history of being great to, and for, one another and the site of the Innovation Center is no different.
“For Cirrus Aircraft to expand their footprint in their hometown of Duluth means the world to us because it further elevates Duluth throughout the world of aviation," Larson said. "We are thrilled to support innovation while repurposing this asset."