Duluth Economic Development Authority approves COVID-19 aid for AAR, Playhouse, emergency business loans

Four Air Canada Airbus A319 aircraft fill the hanger at the AAR facility in Duluth in 2015. AAR was celebrating its 200th aircraft delivery since starting operations in Duluth. (File / News Tribune)

At a special meeting called Friday afternoon, members of the Duluth Economic Development Authority voted 5-0 to provide some relief for local businesses hit hard by the economic downturn that has accompanied the COVID-19 pandemic.

The authority agreed to waive the next three months of rent AAR Corp. was to pay on its aircraft maintenance base in Duluth, forgoing about $111,700 in payments to DEDA, which owns the building. The company's business has fallen off since the spread of the novel coronavirus has discouraged travel, causing commercial airlines to cancel numerous flights and ground large portions of their fleets. Chris Fleege, director of Duluth's planning and economic development division, explained the rent waiver is intended to help preserve local jobs.

DEDA also agreed to offer the Duluth Playhouse three months of forbearance on payments the nonprofit has been making to pay off loans on the NorShor Theatre. The Playhouse has been completely deprived of revenue from the venue at a time when public gatherings have been forbidden. The three-month pause should allow the nonprofit to keep an extra $25,000 in its pockets.

Finally, DEDA also approved a plan to send $90,000 to the Entrepreneur Fund Inc. to provide low-interest emergency loans to local businesses in need. Fleege said the DEDA funds are intended to serve as a bridge, as local businesses wait for state and federal relief to begin flowing.

Fleege said he would like to dedicate more money for the emergency loan program and will likely propose a larger sum when DEDA next meets April 22. However, he noted that any DEDA expenditure of $100,000 or more must also be approved by the Duluth City Council. Fleege said DEDA's initial contribution of $90,000, however, should get the lending program off the ground quickly.

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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