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St. Louis County Board approves tax rebate for aircraft repair firm

St. Louis County commissioners on Tuesday gave final approval for up to $320,000 in tax rebates for AAR Aircraft Services, the company pledging to move into the shuttered Northwest Airlines maintenance base at Duluth International Airport.

St. Louis County commissioners on Tuesday gave final approval for up to $320,000 in tax rebates for AAR Aircraft Services, the company pledging to move into the shuttered Northwest Airlines maintenance base at Duluth International Airport.

Commissioners, meeting in Ely, approved raising their own limits for such tax abatements or rebates from $30,000 per year and $300,000 per project to $50,000 and $500,000.

Under the abatement program, the aircraft repair company pays its usual property taxes but then the county rebates a portion of that money back to the company, which uses it to pay down the costs of the project.

The tax abatement will start in 2017 and run through 2023, averaging about $45,000 per year, county officials noted. Because the city will own the building and lease it to AAR, the rebate is for taxes paid on personal property, Barb Hayden, St. Louis County director of planning and development, has noted.

For 2014-16, AAR will get the benefits of the state's JOBZ tax credits, which also include tax forgiveness, but that program is set to expire at the end of 2016. The county also is set to approve a one-year, $50,000 loan guarantee for the company.

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AAR in April announced it would expand into the 187,000-square-foot Duluth base that Northwest abandoned in 2005 as it fell into bankruptcy. The facility was built at a cost of about $52 million especially to service Airbus aircraft. AAR has pledged at least 100 jobs in the base by July 2013 and 192 jobs by July 2016, county officials said. Company officials in April said those jobs will pay between $30,000 and $80,000 per year.

John Myers reports on the outdoors, natural resources and the environment for the Duluth News Tribune. You can reach him at jmyers@duluthnews.com.
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