Deere & Co. has tapped the brakes on its new hangar project at the Quad-City International Airport, delaying its opening by more than a year.
Deere spokesman Ken Golden said Wednesday that the Moline-based manufacturer decided to delay completion of the hangar for its corporate aviation operations in light of the global economic conditions.
"This action was taken as Deere prioritized a number of capital improvements across its various locations around the world," he said, adding that the company has changing the timing of different projects.
"While the shell of the building has been completed, finish work and other details have been placed on hold," he said of the hangar project.
Deere now expects to finish the hangar project in 2011. It had planned to open it later this year. Deere will continue to lease an hangar at the airport.
Bruce Carter, the airport's aviation director, said the airport "had vibrations" for a couple of months that the project was headed for a delay. "Are there people out there working on it today? Yes. But the project is slowing down," he said.
According to Carter, the airport's contract with Deere calls for the company to occupy the new structure by 2012 and the delay does not breach any financial agreements.. "We're still receiving revenue from Deere as a tenant for their (existing) hangar," he said.
Under the development agreement, approved a year ago, Deere will lease 11 acres from the airport to build the nearly 40,000-square-foot hangar. Once it occupies the $15 million hangar, Deere will pay $200,000 in rent a year for the first five years and $94,000 a year for the next five. After that, it will pay $94,000 annual rent plus a cost-of-living adjustment every three years.
Despite the delay, the airport has budgeted $3.1 million in its fiscal 2010 to purchase Deere's existing hangar, said Holly Green, the airport's finance and administration director. "We kept that in the budget just in case they would finish the project next year."
The site preparation work that the airport agreed to complete is nearly finished, she said. "We have paid for all the work that has been done."
Carter added that Deere's decision does not delay any of the airport's own construction projects, including a major runway rehabilitation.
The delay will, however, stall the airport's efforts to bring another tenant - possibly an airline maintenance facility - into the existing Deere hangar. But given the uncertainty in the airline industry, he said, "That's probably better for us right now. We're still going to market their building."