County Commission Gives Preliminary Approval, Full Vote Next
Week
Cirrus Design has asked the St.
Louis County Minnesota county commission for forgiveness for
repayment of a $27,770 tax rebate owed the county on its Duluth
manufacturing plant. Meeting as a Committee of the Whole, the
commission has given preliminary approval to the plan.
When Cirrus expanded into the facility at Duluth International
Airport in 2007, they made a deal with the county to receive a 10%
tax break on the property as long as they maintained a certain
employment level at the facility. At the time, they had expected to
add 220 jobs for an employee base of nearly 1000 people. Cirrus
received the first tax rebate last year.
But Cirrus has had to cut staff due to the economy, and has not
been able to keep its end of the bargain, so they went to the
county commission seeking relief from additional $27,770 in
taxes. Cirrus Vice President for Business Administration Bill
King has also asked that the agreement be nullified, as employments
levels are not likely to return to pre-recession levels soon, if
ever. "They're saying there's no sense in us sending them the
rebate each year only for them to have to pay it back, so they
simply want to end the agreement altogether," Barb Hayden, the
county's director of planning and development, told the Grand Forks
Herald.
Cirrus says it is not able to
afford pay back the rebate this year. "If a repayment were to be
required we would clearly be doing so from our already stressed
cash flow of this business and it would very likely create
additional adverse impacts on our operations, at a time when we can
least afford it," King wrote in a letter to the St. Louis County
Commission.
"We now believe, with the restructure that we have completed to
date, we will in fact survive these perilous times and continue to
be operational, assuming our industry does not continue to worsen
significantly," King noted.
The paper indicated that the Commission is expected to give
final approval to the plan when they next meet, but it is not the
end Cirrus' troubles. The company also owes $200,000 to the city of
Duluth, and $800,000 to the Grand Forks Development Authority, in
back rent. Cirrus President and CEO Brent Wouters has said he
expects the company to return to profitability late next year, and
the company should be able to clear the outstanding debt when that
happens.