DULUTH — The city is seeking a $210,000 settlement with the aircraft maintenance company that abandoned a 20-year lease at the Duluth International Airport this spring.
Citing a lack of business due to the pandemic's affect on air travel, AAR Corp. in May closed its Duluth hangar. About 275 jobs were lost.
The company did not give 180 days' notice to terminate its lease as the agreement required, leading to a negotiated buyout of the lease totaling $210,422.
AAR moved into the former Northwest Airlines hangar in 2012 and had been a key part of the city's growing aviation industry. Until the closure the Illinois-based company was performing routine maintenance on United Airlines jets in Duluth, work that dried up when air travel all but stopped as COVID-19 spread.
In April the city forgave $111,000 in rent in a move to keep the local operation afloat.
The Duluth Economic Development Authority (DEDA) board will consider the settlement at a meeting Wednesday.
Once the settlement is completed, Cirrus Aircraft wants to store unfinished aircraft in the empty hangar at least through the end of the year.
"Due to recent unexpected interruptions in their supply chain, Cirrus is suffering a 90-120 day delay and is unable to complete aircraft for customer delivery," a proposed lease agreement says. "Cirrus requested that DEDA lease them approximately 36,000 square feet of (the hangar) to help them protect their inventory until it can be completed and delivered."
The company would pay the city $21,000 per month for the space in a deal also going before the DEDA board on Wednesday.