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two interim tenants: Cirrus Design and ISL Aeronautical
Systems. A long-term tenant has not yet been secured, but
this long lead time is not atypical for airports that seek to
lease specialized aviation facilities.
Expansion of existing airport tenants is an obvious first
prospect for reuse of a facility. Suppliers of airport tenants
are another source of tenant prospects. DEDA in cooperation
with DAA and the Area Partnership for Economic Expansion
looked first to Cirrus Design, the airport's largest tenant, as
the logical tenant to consider expansion. In a better economy,
Cirrus may have remained in the facility. That said, further
inquiries to existing businesses in the region make sense
before conducting a national or international search.
FIGURE 15 ISL blimp in Duluth Maintenance Facility, Duluth
International Airport.
Industry trends are important. The MRO business is con-
centrated and small within the United States. A realistic view
of these prospects will inform the reuse strategy. MROs are
LESSONS LEARNED operated by airlines, independent organizations, and origi-
nal equipment manufacturers. The businesses come in all
The Duluth Airport Maintenance Facility experience brings sizes. However, according to a 2009 survey of the MRO
into focus many of the challenges that an airport faces when a industry (Spafford et al. 2009), outsourcing of MRO activi-
lease is rejected through bankruptcy for a specialized facility. ties by airlines has leveled off, particularly because North
American carriers have reduced capacity and sidelined an
The Duluth Airport Maintenance Facility has remained unprecedented number of aircraft, particularly older air-
vacant since 2005 and under DEDA ownership since May craft. Line maintenance is the area that may experience a
2007. Airport properties that are subject to Chapter 11 bank- sizeable increase in activity. The slow growth of the MRO
ruptcy proceedings can fall into ownership limbo when an industry and its relative concentration will help focus and
airline vacates the facility, such as NWA did. In this instance, target DEDA's prospects.
payments to bondholders lapsed and regular maintenance
on the building ceased. The city of Duluth, the airport, and DEDA recognizes that it may take time to secure its next
private businesses recognized the value and importance of long-term tenant. Its strategy has been to (1) create an excel-
the facility to the local economy and covered the financial lent marketing and information package to attract a new ten-
obligations and upkeep until ownership of the improvements ant for the facility's original use and market the property
was resolved. Finding a long-term tenant and building out nationally, (2) build out of the North Business Development
the aviation cluster on the north side of the airport has been Area to create a cluster of aviation support activity, (3) mar-
a large undertaking during difficult economic times. In the ket the facility to a national audience, and (4) seek alterna-
meantime, the Duluth Airport Maintenance Facility has had tive uses of the facility if an MRO tenant is not found.
