DULUTH – The city’s economic authority wants to forgive rent for the next few months for AAR Corp., a large employer at the airport that has been hit especially hard by the coronavirus-caused downturn in air traffic.
The Duluth Economic Development Authority (DEDA) will meet Friday to vote on the rent abatement, which would save the airline repair and maintenance firm more than $111,000 through the end of June.
“We’re wanting to give them an opportunity to cut expenses so they can continue to pay employees and not have as big a financial burden due to COVID-19,” said city spokeswoman Kate Van Daele.
As part of a 20-year lease agreement signed last year, rent typically is funneled back into building maintenance.
AAR executives have discussed layoffs and consolidations in response to declining business as air traffic dwindles. The company has locations around the world and in typical years reports annual sales in the billions.
“We remain prepared to take additional action as warranted to respond to the evolving airline demand environment,” the company wrote in a federal filing.
The company employs about 400 people in Duluth, according to state figures. It took over the former Northwest Airlines hangar in 2012 and has a contract to perform routine maintenance and repairs on United Airlines jets.
DEDA will also consider a $25,000 zero-interest loan for the Duluth Playhouse/NorShor Theatre and $90,000 in small-business loans that the Entrepreneur Fund will oversee.