#DuluthDownload 24.7
Following the happenings of the 2024 Duluth City Council and more.
Good Things Come to Those Who Wait for More Downtown Housing
Happy rainy spring weekend in Duluth! A much-needed vacation in mid-April interrupted my usual bi-monthly cadence for the Download, so today’s newsletter is a double dose covering both April meetings. But before we jump into that, a quick story on the human side of local politics.
Back in 2018, the council was asked to approve a proposal for a new apartment building adjacent to where the new Essentia hospital was planned to be built. The “333 Tower” as it was known at the time promised to add 204 units of market-rate housing on Superior Street. The pandemic hit, inflation surged, the project struggled to get financing, and five years after that initial 2018 approval we had a hole in the ground and a cluttered site between the Sheraton and a billion-dollar hospital to show for it.
Fast forward to October of 2023. The Duluth Economic Development Authority (DEDA) was asked to approve a seventh amendment to the project agreement kicking out deadlines once again to get the project started. As a voting member of DEDA, my patience had worn thin. The abandoned site, with partially torn-down structures and stuff everywhere, was visually unappealing and there appeared no end in sight. After five years of seemingly little progress, we were getting close to the time when you consider cutting your losses on a development. I was leaning toward voting against another extension.
As that fateful October DEDA meeting was approaching, I happened to be chatting with Eddie Gleeson, owner of Carmody’s, at an event at his fine establishment. Eddie told me that they had been holding out hope, as a small business coming out of the pandemic, that this project would be a game-changer for that end of Superior Street. Eddie preached continued patience in giving the developers a chance to regain their footing because of the positive impact the project could have on this part of downtown. The small businesses on Superior Street were counting on this project to happen to keep surviving.
Eddie persuaded me that despite the collective frustration with the project, we needed to give it one more shot. Our staff, under Planning & Economic Development Director Chad Ronchetti, worked diligently to craft an updated agreement that gave the developer more time to close on their financing but gave firm deadlines for the city to walk away if they didn’t. DEDA voted in favor of that last extension in October. The financing followed. The site preparation restarted. And while I was on vacation earlier this month, other community leaders celebrated the groundbreaking.
Patience is hard and it can be tough to read the tea leaves as a policymaker. But with this jump ball, I’m glad we listened to Eddie and now get to see the cranes in the air this summer and hundreds of new downtown residents coming soon as a result.
April Council Meetings - 4.8 & 4.22
The lengthy Monday night council meetings that dominated the first quarter of 2024 gave way to a couple of relatively short April sessions. The 4/8 council meeting lasted all of 22 minutes and the 4/22 meeting clocked in ~ 34 minutes. Folks who tune in on Mondays to see such short meetings might wonder why that is with many items still being considered. But oftentimes, the council agenda sessions that are scheduled the Thursday before a Monday meeting are where the bulk of the work and questions about items we later vote on happen. The Thursday agenda sessions before the 4/8 & 4/22 meetings each lasted over an hour learning more about the items we would be asked to vote on a few days later. Thursdays are for questions and digging in. Mondays are for public comment and taking action.
Many nuts-and-bolts items were approved in April, including:
Awarding the street repair contract for our 2024 projects for $8.2 million.
Purchasing cold-mix asphalt for pothole patching.
The contract for 2024 sidewalk repairs.
Purchase of a software system for five years that will enable our police department to work more collaboratively with surrounding agencies to share critical information about criminals, crimes, patterns, and trends, as well as enhance community feedback, statistical analysis, and tracking of officer activities.
Updates of design work for multiple street projects (St. Marie Street and the extension of 6th Ave East from 2nd St to 1st St) and the Zoo’s main building (funded by state legislation a few years ago).
One item that caught the attention of the local news media this month was related to $3.9 million in federal funds the council has to invest by the end of the year. I could spend a lot of time on this topic, but here’s a high-level synopsis at its simplest:
At our first April meeting, the city administration (staff) proposed the funds be sent to DEDA to allow for investment in both housing and economic development. Both the council and administration agreed to pump the brakes on that resolution given some concerns raised about the original intent of the funds being 100% dedicated to affordable housing projects and needing to find more consensus before moving forward.
A proposal was brought at the second April meeting by two councilors to instead divert the funds to the Housing & Redevelopment Authority (HRA). That resolution went to a vote on Monday night.
There was a lot more background and context about these two resolutions that I felt needed to be addressed and cleared up at our last meeting. I don’t usually prepare in-depth comments for council meetings in advance, but I made an exception last Monday for this one. You can watch those comments here:
The HRA proposal did not move forward on a split vote. Some of the talking points in the media and social media afterward focused on how some councilors (including me) “didn’t support affordable housing” with this vote. That narrative is false; we simply voted not to send the money to the HRA, which was never the plan with these funds to begin with. The council has until December 31st to allocate the remaining funds.
State of the City - Including the Biggest News You Haven’t Heard
Thursday night marked Mayor Reinert’s first State of the City speech, which is an annual opportunity for the mayor to lay out their vision and upcoming initiatives for how to achieve various goals over the next year and beyond. Mayor Reinert’s speech was held at the Denfeld Auditorium and included music from the Denfeld jazz band and opening comments from Councilors Kennedy and Randorf.
Mayor Reinert’s speech was well-covered in the media. But he saved the best news for last, and it barely made a ripple in the news because it’s not the sexiest topic: our retiree healthcare liability is fully funded.
Q: How big of a deal is this?
A: A really damn big one.
You may recall the retiree medical crisis that threatened to bankrupt the city as Mayor Ness was taking office following the 2007 election. How far we’ve come from that moment to today.
In 2024, the retiree medical fund was 6% of our total budget at $7.7 million. To put it in perspective, our Streets Maintenance division was $9.5 million. Our Finance folks are now telling us that they’ve done the actuarial math (checked by a third party) and are confident we have enough money in the fund, with one last partial payment due in 2025, to pay the last claim from the last retiree that will use the retiree medical fund. The liability is almost no more.
This means ~ $4.5 million starting in 2025 is now freed up to go toward maintaining city services, slowing down tax increases (including Mayor Reinert’s proposed 0% increase in 2025), and redeploying this newfound capacity in our budget to make investments that save money long-term. Mayor Reinert is proposing to use some/all of this budget space on a new combined citywide maintenance facility, extending the life of our fleet vehicles and improving operational efficiencies. This kind of idea is promising, and I look forward to learning more details and sharing them in the future. But sometimes the best news is of the boring variety and doesn’t make headlines.
Important Things to Know
Keep Duluth Clean runs from now through May 4. Grab a bag, gloves, and head outside or to your favorite Duluth spot to help do some spring cleaning.
The Fire Department has a new arson K-9. He’s adorable and has already been making a difference.
The city and a nonprofit partner have crews out clearing brush and other forest management activities.
City Attorney Jessica Fralich recently joined Councilor Nephew, Councilor Swenson, and me on a tour of the Center for Alcohol & Drug Treatment (aka detox). We learned a great deal about the facility and saw first-hand the important work they do in our community. Thank you to Christine Juel and her team for having us!
Thanks for reading, folks! Always welcome feedback and questions in the comments.
As always excellent coverage and comment. Thank You
Kent Worley
Thank you for the excellent overview, Arik, and especially for including the 10-minute video with your comments. You've obviously done your homework! I appreciate your well-reasoned approach.