Former airline maintenance base needs tenant
DULUTH - Once considered one of Duluth's economic stars, the former Northwest Airlines maintenance base looks more like an albatross today. Northwest last serviced Airbus jetliners at the $52 million facility in 2005, leaving the future of the hi...
DULUTH - Once considered one of Duluth's economic stars, the former Northwest Airlines maintenance base looks more like an albatross today.
Northwest last serviced Airbus jetliners at the $52 million facility in 2005, leaving the future of the highly specialized base up in the air.
In 2008, Cirrus Aircraft, seeking space to develop its first jet, moved into the shuttered building. But as Cirrus moved in, so did a national recession. The company's sales plummeted, and Cirrus scaled back its operations.
Exiting the former Northwest base at the end of September, Cirrus left the Duluth Economic Development Authority, which owns the building, tenantless. The burden of heating the former Northwest base and keeping its complex mechanical systems operating now has fallen on DEDA.
Maintaining the complicated and cavernous 187,000-square-foot building through the winter won't be cheap. Duluth Chief Administrative Officer David Montgomery estimates DEDA might need to spend up to $200,000 just to keep the facility in good working order through the spring, in hopes that a new tenant can be found in 2010.
"You can't let a building like that go cold," said Rob West, president of the Area Partnership for Economic Expansion -- commonly called APEX. "If you did, the cost to bring it back up would far exceed the cost of maintaining it."
'window of opportunity'
West and others hope the base can be returned to its original purpose.
The facility's high ceilings and cranes could be put to use for other sorts of large-scale assembly or production. For instance, Nancy Norr, president of the Duluth Airport Authority, suggested the space might be suitable for a producer of wind power equipment.
"We're not locked into aviation uses alone," Duluth CAO Montgomery said.
The plant was designed especially to handle the Airbus A319 and A320. Many of these aircraft now in service are reaching a stage at which the Federal Aviation Administration requires them to undergo major work -- called a "heavy check" in the industry. This involves tearing an airplane down to inspect and rebuild its systems.
Mechanics at the Northwest base in Duluth were renowned for their skill and quick turnaround times of airplanes, usually completing a heavy check in 25 to 26 days, versus the norm of 28 days, West said.
And the faster a jet can be returned to service, the less revenue a carrier sacrifices.
Though tailored for Airbus aircraft, the base also would be well-suited to service jets such as the Boeing 737, West said.
Tim Barzen, a retired Northwest pilot from the Twin Cities, said he and several partners in a startup venture called Northern Aero Partners are interested in the Duluth base.
"We see a very definite window of opportunity, and we hope we can solidify a plan in the very near future," Barzen said.
He says Duluth would be an excellent place to launch an MRO -- industry shorthand for a maintenance repair and overhaul facility. Many airlines that once took care of their aircraft in-house now outsource the work to MROs, often located in lower-wage markets abroad.
But Barzen said he believes a domestic MRO centrally located in a place like Duluth could make a strong pitch for work, especially complicated heavy checks.
"We still believe very strongly in the work force and talent base in Duluth," Barzen said.
If Barzen is hoping to rehire mechanics who used to work for Northwest, he might be in for a rude awakening, according to Shelby Holen, who worked at the Duluth maintenance base from the its opening to the day it closed.
"A big majority of mechanics have moved on," he said.
Many of those who remain, such as Holen, also might be reluctant to return to such a volatile industry. Holen now runs his own shop in Superior, working mostly on private versus commercial aircraft and said he can't imagine returning to the base.
"They'd probably have to offer big money to even get people to consider it," he said.
Barzen said financing is one of the biggest obstacles to setting up shop in Duluth.
With credit tight and lenders nervous, raising the $35 million Northern Aero Partners estimates it will need to launch its venture has been tough. But Barzen said the group has continued to pursue a project in Duluth nevertheless.
The MRO industry is a challenging environment to enter for several other reasons, as well, according to Brian Ryks, executive director of the Duluth Airport Authority. He pointed out that most commercial carriers have been reducing capacity, which means they need fewer aircraft than in the past.
Meanwhile, as much MRO work has migrated to cheaper foreign markets, other U.S. maintenance facilities besides Duluth's have gone idle.
"It's an extremely competitive market right now because of all the excess capacity that's out there," Ryks said.