DULUTH – A defense contractor is eyeing the former AAR Corp. hangar at the Duluth International Airport to bring new aircraft-maintenance work — and 100 jobs — to town.

If awarded a federal contract, Utah-based Borsight Inc. would spend a year servicing U.S. Air Force F-16 jets and could potentially plant a more permanent presence in Duluth.

The company would pay the city nearly $127,000 per month for the lease on the 189,000-square-foot hangar — which will only happen if the federal bid is awarded, and that may not be known until March.

"They are required, as part of their proposal, to have in hand a commitment that they will have the physical facilities to fulfill the contract," the lease agreement states. "Borsight has also indicated that there is a possibility that, depending on the progression of the federal contract and the way the work progresses in Duluth, this lease could serve as the basis for a longer-term relationship."

Chris Fleege, director of planning and development for the city of Duluth, said the contract calls for 10 years of F-16 maintenance.

"We're really excited for it," he said. "It couldn't have been more perfect timing if this plays out."

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AAR Corp. hangar is shown in September 2017. The company handled routine maintenance on commercial jets at the Duluth airport until the downturn.

Borsight was founded in 2006 and has serviced numerous aircraft for the Air Force, Air National Guard and Air Reserve at the Ogden, Utah, airport where it is based.

In 2019 Borsight announced it would work with Belgian aircraft giant SABCA on an F-16 "depot-level maintenance and repair services" request, with a contract worth up to $900 million. Company officials did not respond to requests for comment about the potential expansion to Duluth.

"By 2020, Borsight will build additional manufacturing/hangar facilities to more than double the current facility square footage," the company said on its website. "With the increased facility size and capability, Borsight will continue to grow its technical expertise as we onboard more exceptional personnel."

The Duluth Economic Development Authority will vote on the lease on Friday. The city estimates each F-16 serviced would equate to seven jobs, with the hopes of bringing a dozen jets through the hangar at a time.

Cirrus Aircraft leases some of the space at the hangar to store unfinished jets as it faces a backlog due to a supplier issue. The company saw its plane shipments fall in the second quarter amid a 20% drop in revenue over last year across the industry, according to data released this week by the General Aviation Manufacturers Association.

Should Borsight move in while Cirrus is still using the space, the companies will share the space, according to the lease.

AAR, which had been performing routine maintenance on commercial jets at the Duluth airport since 2012, walked away from a recently signed 20-year lease earlier this summer after the pandemic upended the airline industry and caused business to dry up. About 275 jobs were lost.

"We still have the workforce in the area, though as every day passes I'm becoming concerned about that — it has been since May when they did the majority of the layoffs," Fleege said. He expects Lake Superior College to help train the workforce Borsight needs.

The city-owned hangar was originally built by Northwest Airlines in 1996. It closed the facility in 2005 at the start of a mechanics strike, costing 400 jobs.

Brooks Johnson • 218-491-6496