Title
RESOLUTION OF INTENT TO SELL OR CONVEY CERTAIN REAL PROPERTY AT DULUTH INTERNATIONAL AIRPORT.
Body
CITY PROPOSAL:
WHEREAS, Section 2-176(a) of the Duluth City Code, 1959, as amended, requires that prior to any city-owned property being offered for sale or conveyance, the city council shall, by resolution, state its intention to sell or convey such property.
RESOLVED, that the Duluth city council hereby states its intention to offer for sale or conveyance property in the city of Duluth legally described on the attached Exhibit A.
Statement of Purpose
STATEMENT OF PURPOSE: The purpose of this resolution is to state the city’s intent to convey real property located near the Duluth International Airport for its continued use for airport manufacturing. The real property proposed to be sold or conveyed is legally described on the attached Exhibit A (the “Incubator Building”). The current property tenant is Cirrus Aircraft, an aircraft manufacturing company headquartered in Duluth.
The city of Duluth was awarded a grant from the U.S. Department of Commerce Economic Development Administration of $3,450,000. This project, which supported advanced aircraft manufacturing, met its goal of creating higher-skill, higher-wage employment opportunities during a period hard-hit by a declining iron mining industry. The purpose of the grant award was to construct a city-owned building at the Duluth International Airport and parking to lease for business and manufacturing. All required financial and program reporting has been submitted and receipt acknowledged. As a result of these activities, the grant award supported the creation of 233 permanent jobs at the new facility, through the long-term manufacturing tenant Cirrus Aircraft. The city of Duluth has submitted Exhibit B, (“Federal Release Request”) for a Federal Release of the property with the expiration of the mortgage in October, 2022 per CFR Title 13, Chapter 314.3. A sale of this Property is contingent upon this release.
The future use of the building will continue to be for aircraft manufacturing. The sale and transfer of the property from the city of Duluth to the Duluth Economic Development Authority (DEDA) allows for DEDA to sell the building alongside a development agreement, enabling the sale to be contingent on investment and job growth by a prospective buyer. Per the US EDA guidelines, any future sale of the property to a private entity must be sold for fair market value.
If this resolution is approved, the DEDA will bring forward the following actions towards a future sale of the property:
1. An ordinance authorizing the intent to sell and public hearing
2. A resolution authorizing a sale and development agreement.
In light of the substantial public benefit associated with conveying the property to DEDA, the city intends to convey the property for nominal consideration.