Duluth airport tenants warn steep appraisal increases could sting airlines, airport cluster

Tom Werner, representing the airport authority, told St. Louis County commissioners during a pre-meeting public listening session that recent property revaluations for leased parcels at Duluth International Airport show sharp percentage increases that have alarmed tenants and could affect airlines serving the field.

Werner said the airport cluster generates roughly $1,400,000,000 in economic activity and supports about 4,000 jobs, and that tenants are worried the rate of appraisal increases will create “sticker shock.” He said 14 of 43 leased properties recorded appraisal increases and four properties saw increases of more than 500 percent. "That doesn't necessarily mean that they know exactly what dollar amount their property taxes are going to go up," Werner said, "but the rate of increases ... do create some sticker shock."

The concern, Werner told commissioners, is that higher costs could make operating at Duluth less competitive compared with similar airports and complicate negotiations with major carriers. He specifically named Delta and United as airlines that provide important regional service at Duluth. "It'll play out, you know, in terms of conversations with airlines and other tenants over the period of months as we know what the true monetary value of some of these things are," he said.

Asked by Chair Harla about funding for airport projects, Werner said the authority is included for $10 million in the state transportation omnibus bill and is seeking about $4 million more. He said the remaining amount is unlikely to be included in this year's bonding bill and that the authority expects to return during the normal bonding cycle next year to request the balance. Werner also said airport leaders are working with the federal delegation on bipartisan provisions in the reconciliation bill that would create a new funding program for their type of tower, and that members of the delegation "have been champions of this."

Werner offered to meet individually with commissioners to explain the issue in more detail and said the final tax impacts will become clearer in the coming months after property owners receive their tax notices. No formal action or vote occurred; the remarks were made during the listening session portion of the board's meeting and were recorded for the public record.

Less-critical details discussed included the airport authority's ability to phase construction work if funding arrives and that the requested state funds would pay for work ineligible for federal funding. Werner emphasized he was raising awareness for commissioners and invited follow-up meetings to provide additional detail.