Delta Air Lines will get $5.9 million loan

Published 1:58 pm Saturday, November 9, 2013

DULUTH — Delta Air Lines will receive a $5.9 million forgivable government loan to refurbish a call center in northern Minnesota that was mostly built with government money in the first place, under a deal approved Thursday.

The loans are handled by the Iron Range Resources and Rehabilitation Board, a regional economic development agency in northeastern Minnesota.

The board approved the deal that requires Delta to keep 525 employees there, up from the current 418.

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Delta officials said they hope to begin the expansion within weeks.

The 12-year “forgivable loan” starts to come due in five years, but the payments would be forgiven if employment stays above 450.

If employment drops below 450 for one year, Delta would have to repay half of the loan. If employment drops below 400, Delta would be required to repay the entire loan at 2.5 percent interest, and the IRRRB would have the option to foreclose on the building.

Northwest Airlines built the center with a $9.7 million loan from the board in 1994. Of that, $1 million was repaid and the rest was forgiven. Delta bought Northwest in 2008.

IRRRB staff and board members said the deal shows the wisdom of state officials who developed the state’s largest economic incentives deal in 1994 for a private company, Twin Cities-based Northwest, which included the Chisholm call center.

“I’m really excited to have (Delta) recommitted to the Iron Range for the future,” IRRRB Commissioner Tony Sertich said.

Lawmakers who make up the board praised the center’s workers who have been cited by Delta as the best in the airline’s international system.

“The quality of the Range worker is being showcased here,” said state Rep. Dave Tomassoni, DFL-Chisholm, chairman of the IRRRB oversight board.