Delta Air Lines and the Metropolitan Airports Commission (MAC) won't need legislative approval before signing a new bond repayment agreement, according to a Minnesota Senate attorney who testified at a Wednesday hearing.
Northwest Airlines, acquired by Delta in October, still owes about $245 million on bonds that the airports commission sold in 1992 on the carrier's behalf. That bond deal required Northwest to maintain its corporate headquarters in Minnesota until the bonds are repaid. Delta plans to close Northwest's Eagan headquarters in a few years.
The 15-member commission will convene Monday to consider a renegotiated pact that won't penalize Delta for that closing in exchange for the airline's agreement to preserve thousands of jobs and provide 400 daily flights in Minnesota.
Peter Wattson, a legal counsel to the state Senate, told two of its committees that the MAC would have the authority to enter a new deal with Delta because the terms provide a "remedy" to compensate for the move of Northwest's headquarters.
In the deal, Delta agreed to keep at least 10,000 jobs in Minnesota through 2016, and it spelled out several business activities that would be located in the state, including pilot training and data centers in Eagan.
Sen. James Metzen, DFL-South St. Paul, characterized the agreement as "probably the best deal we could get." Metzen, chairman of the Senate Business, Industry and Jobs Committee, presided over a two-hour hearing in which no senator tried to scuttle the deal.
Sen. Jim Carlson, DFL-Eagan, previously had introduced a bill calling for "full enforcement" of Northwest's current agreements with the MAC. The legislation calls for using "any legal" means to recover damages as well as repayment of money for a variety of business agreements, such as "favorable gate lease rates."
Yet Carlson said after the meeting Wednesday that he was pleased by what he heard from representatives from Delta and the MAC. As part of the deal, he noted, "We are getting the headquarters of Compass Airlines, moving from Virginia to here." Compass is a Northwest subsidiary that flies large regional jets.
Tammy Lee Stanoch, Delta's vice president of corporate affairs, said the deal also calls for airline executives who oversee Delta's regional carriers to move from Atlanta to the Twin Cities area.
The tentative agreement between Delta and the MAC staff was reached in mid-December. Under the deal, Delta would pay off the full amount of the bonds by 2016. Tom Anderson, MAC general counsel, said the major terms remain unchanged, but commission members were sent a revised summary this week that details the kinds of business activities that Delta would operate in Minnesota.
Metzen, the Senate president, said he supports the revised agreement. "We're all for jobs, and times are tough."
Four Minnesota House committees are to hold a hearing on the Delta-MAC agreement today.
Gov. Tim Pawlenty, who appointed 13 of the 15 members of the MAC, also favors the deal.
Liz Fedor • 612-673-7709