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Duluth airport could benefit from lease of former Northwest Airlines base

The Duluth Airport Authority could share in the financial benefits of having the former Northwest Airlines maintenance base returned to productive use.

The Duluth Airport Authority could share in the financial benefits of having the former Northwest Airlines maintenance base returned to productive use.

With Cirrus Design Corp. now renting the facility, a portion of those revenues may flow to the airport. During a special meeting of the Airport Authority Monday April 28, commissioners unanimously supported a plan whereby Duluth Economic Development Authority, the building's owner, would divert some of the money to the airport. Additional money would be put into a fund designed to help airport enterprises grow, assuming DEDA members support a plan which will be presented to them next Monday May5.

Although DEDA owns the former maintenance base, the Airport Authority controls the land upon which it sits. The original 99-year lease agreement with Northwest provided no payments to the Airport Authority. All rental revenue from the facility went to service debt from its construction.

But DEDA wound up with clear title to the building after Northwest emerged from bankruptcy earlier this year. DEDA, in turn, agreed to lease the facility to Cirrus. The growing airplane-maker needed more room for its efforts to develop a personal jet.

Brian Ryks, executive director of the Duluth Airport Authority, said he requested a cut of Cirrus' rent in February, touching off the discussions which yielded the pending agreement.

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Tom Cotruvo, executive director of DEDA, agreed that a portion of the rent should go to the Airport Authority to help cover airfield operating and upkeep costs. He proposes DEDA pay the Airport Authority $50,000 of the $300,000 it will collect from Cirrus this year. By 2013, when Cirrus' annual rent for the facility climbs to nearly $1.2 million, DEDA payments to the Airport Authority would climb to $75,000, with subsequent yearly increases to keep pace with changes in the consumer price index.

Additionally, Cotruvo proposes 25 percent of the remaining revenues, minus expenses, go into a special fund earmarked to support future development on Airport Authority property. In all, the authority owns about 3,000 acres of land surrounding the airport, and Cotruvo noted that DEDA has been working closely with the Airport Authority to support the growth of the city's aviation industry in recent years.

DEDA would retain control of this new airport development fund, but Cotruvo said it would seriously entertain any proposals from the Airport Authority for its future use.

"Of course, we would like to have complete control of the money, but DEDA wasn't willing to go there," said Ryks, explaining: "They apparently had some statutory concerns."

Nevertheless, Ryks voiced his support for DEDA's proposed plan.

"I think it's fair to both parties," Ryks said, noting: "The Duluth Airport Authority and DEDA have enjoyed a good partnership."

PETER PASSI covers business and development. He can be reached weekdays at (218) 279-5526 or by e-mail at ppassi@duluthnews.com .

Peter Passi covers city government for the Duluth News Tribune. He joined the paper in April 2000, initially as a business reporter but has worked a number of beats through the years.
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