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Delta to vacate yet another Eagan site
Posted under Dakota Co. Tribune Business Weekly,Eagan on Wednesday 27 July 2011 at 3:51 pm
Atlanta-based airline plans to close its training facility on Lone Oak
Point
by Jessica Harper
Dakota County Tribune
Delta Airlines Inc. has made ,more cuts in Eagan, leaving the city with more real estate on
the market.
The Atlanta-based airline recently announced it will move its flight training jobs from
Eagan to Atlanta, closing its facility at 2600 Lone Oak Point.
The company is already trying to unload the former Northwest Airlines headquarters
building in Eagan.
The training facility nearby was built by Northwest Airlines in the 1980s, and has about
279,000 square feet, according the Metropolitan Airports Commission, which currently
owns the property.
Although the building is technically owned by the MAC, Delta has the right to buy it back
for $1 after paying off its outstanding loan to the MAC, said Patrick Hogan, spokesman for
the MAC.
Delta sold the building to the MAC in 1992 to secure a loan package while the industry
was in a downturn. The deal included stipulations about employment levels within the
Twin Cities.
Delta representatives did not return phone calls in time for publication.
The airline plans to pay off the loan and no longer be bound by the employment
commitments for the Twin Cities area.
The airline's balance is currently $114.4 million and Delta must pay a 3 percent premium
for paying early, Hogan said.
MAC expects the loan will be paid off by early 2012, he said.
Delta's net income was $593 million, which was generated by $31.8 billion in revenue in
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2010. The airline lost $10 billion in 2008 and 2009.
Delta has not specified how many jobs will be transferred.
Hogan said he believes it will be hundreds.
"The good news out of it is that they will continue to have about 20,000 people working in
Minnesota," he said.
The Minneapolis -St. Paul Airport is the second largest hub in the Delta system, and the
airline has indicated it plans to keep it that way, Hogan said.
Jon Hohenstein, community development director for the city of Eagan, said that city
officials hope the property will be used for similar purposes.
"We are always concerned when there's a reduction like that, but many jobs at the
location like in-service pilots and flight attendants may or may not be based in Minnesota,"
he said.
Though the airline is looking to sell the building — historically known as the Northwest
Areospace Training Corp. — the facility will still be used for 12 to 18 months, said Tom
Hedges, Eagan city administrator.
Delta bought Northwest in 2008 and transferred employees to Atlanta, which meant the
loss of a Fortune 500 company in Eagan.
A deal for the main building fell apart in November 2010. It is currently listed for $30
million.
There is another pending property in Eagan that is connected to the Delta -Northwest deal.
As part of the merger, Delta acquired Eagan -based Mesaba Airlines, a regional carrier
and Northwest subsidiary.
Delta then sold Mesaba in July to Memphis -based Pinnacle Airlines, one of Delta's largest
regional carriers, for $62 million.
Now Bloomington -based NorthMarq have been handed the task of leasing the 50,000 -
square -foot space.
Jessica Harper is at
jessica.harper@ecm-inc.com.
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