Duluth Mayor Emily Larson Offers Recommendations To Make Spirit Mountain More Financially Viable
Duluth Mayor Emily Larson addressed the media Thursday afternoon to offer recommendations for making the Spirit Mountain Recreational Area a more financially viable entity in the years ahead.
The press event, held at Spirit Mountain at 2 pm on Thursday afternoon, offered recommendations based on a report from the Spirit Mountain Task Force and consulting firm SE Group. The report explored how to bring better financial footing and improvements to the recreation area, which has amassed a sizable debt in recent years.
While Spirit Mountain did post a profit last year, despite the pandemic, the recreation area has received a series of loans from the City of Duluth as it has dealt with financial challenges in recent years. Those loans were actually one of the subject of Mayor Larson's recommendations in Thursday's presentation. As she explained, she felt a number of 'Band-Aids" have been placed on the Spirit Mountain issue, and she feels this plan will create a permanent fix for the venue.
The proposal includes a $24 million capital reinvestment, funded 50% by state bonding, 25% by city tourism tax revenue, and 25% by Spirit Mountain. If funded, the goal would be to start the capital projects in 2023. A sizable portion of this project would be in repairing and upgrading degrading facilities on site. Some of the specific investments noted under the plan include:
- Improving winter activities infrastructure for skiers/snowboarders/etc. with the long-term goal of reducing costs.
- Completing the Nordic skiing and mountain biking trail options
- Refreshing and "modestly expanding" the summer adventure park facilities, including adding a ropes course, replacing the mini golf course, and renew the alpine coaster
- Renew Skyline Chalet and campground infrastructure
Additionally, the city will work to formalize the relationship with the entity to create a 10-year inter-agency agreement to define duties and obligations of the city and of the venue, both financial and non-financial.
Mayor Larson explained that the improvements would increase visitors, job opportunities, and revenue opportunities for the recreation area.
As mentioned before, Spirit Mountain has a sizable debt to the City of Duluth, and Mayor Larson explained that a resolution will be discussed at the city council meeting next week to forgive $900,000 of the venue's debt to the city. She noted this was a recommendation from the task force. Her explanation for this idea included that the "line of credit with the city has been maxed out for years", and that "despite good intent and best effort, we're just not going to see this money in the current configuration of Spirit Mountain".
She went on to explain that this proposed forgiveness would "allow the city to negotiate a debt repayment schedule while weaning the venue from the city's operating subsidies". She says this would allow the city to focus finances on investments in the property and facilities, as well as grant the opportunity to explore another recommendation; enter into a long-term operational lease for facility management.
Mayor Larson went on to explain that debt forgiveness and investment into the venue's infrastructure would provide a significantly better chance of finding a managing firm for the recreation area.
Larson also addressed calls from some to simply sell Spirit Mountain. She commented "This just is not an asset we can sell". Being public park land, Larson explained that the process to sell is very difficult and complicated, also calling it "highly political". While she admitted it is possible, the complex web of city and higher governmental investments and legal involvements make selling the property a highly complex option. She explained that she wished there was a simple option, but expressed that it isn't a realistic option.
Jim Filby Williams went on to elaborate that some of the federal funding for constructing Spirit Mountain creates permanent restrictions on land and facility use. He explained that "it may be possible, with considerable difficulty, to sell relatively minor portions of the property" but he called it a "practical impossibility" to sell the entirety of Spirit Mountain.
The debt forgiveness and the rest of the proposal laid out by Mayor Larson will next look for approvals from the city council. Looking further down the road, approval from the state legislature would be needed gain a large portion of the funding for the proposal.