The city of Duluth is pursuing an approximately $210,000 settlement with AAR Corp., the aircraft maintenance facility that closed its doors in late May and abandoned its leased aircraft hangar.
AAR's closure came after the Duluth Economic Development Authority, which owns the former Northwest Airlines maintenance hangar, agreed to waive three months of rent totaling $111,700 to encourage the company to stay. At the time, AAR was projecting a 70%-80% companywide drop in business due to a substantial reduction in people taking commercial flights during the COVID-19 pandemic.
AAR eliminated nearly 270 jobs in Duluth when it closed.
When it first announced its closure, AAR told the city it would close at the end of July and cease its obligations with DEDA, said Chris Fleege, the city's planning and economic development director.
Per its lease, AAR was required to give the city six months notice.
"We basically ... held their feet to the fire" and secured the $210,000 settlement figure, Fleege said.
Around half of the settlement accounts for six months of rent, while the other half is the cost of building utilities, maintenance and other expenses, Fleege said.
Cirrus Aircraft has expressed interest in temporarily using part of the hangar for storage at a monthly rate of $21,000, according to a DEDA resolution.
Cirrus is experiencing a three- to fourth-month delay in its supply chain, resulting in undelivered airplanes for customers. It has a buildup of inventory and needs weatherproof storage until the airplanes can be assembled, the resolution says.
A number of other companies, including those that specialize in jet maintenance, have contacted DEDA for information about the hangar. But, Fleege said, Cirrus is "a logical fit" because its need is short term and its proposed use fits the space well.
As of Monday evening, DEDA was set to vote on the lease settlement agreement Wednesday, but that could be delayed as AAR needs additional time to review it. This could delay Cirrus' ability to use the space, Fleege said.
AAR and Cirrus did not respond to requests for comment by publication time.