2015 year in review

John Ramos

2015 was a busy time at The Reader. We broke a number of stories, large and small, the most important being the revelation that the Ness administration had influenced consultants who were hired to study the future of the Duluth Public Library. The Ness administration wanted to build a new library downtown; internal City Hall emails obtained by The Reader showed official fingerprints all over the consultants’ supposedly “objective” report. False and misleading information was rampant, and it was all designed to guide citizens toward the city’s preferred conclusion.

The City Hall emails also showed top city officials conspiring to thwart The Reader’s reporting by inserting their own version of the truth in the Duluth News Tribune. This effort was successful. DNT reporters parroted everything the city handed them; they verified not a single fact. The News Tribune’s leadership followed up the abysmal reporting with a full-page editorial urging citizens to “trust experts” and build a new library.

If not for The Reader, the city would now be deep in the design stages for a new library, based on false information. Instead, the new library idea has disappeared, and planning is now focused on refurbishing the existing facility. Assuming that a new library would have cost about $40 million and refurbishment will cost about $15 million, The Reader’s series of library articles may have saved the city $25 million. That’s not bad for a few sheets of newsprint.

I was thrilled by the library articles when they ran back in June and July, and I made sure to share them with every mainstream TV station and newspaper in the area. Sadly, no one else deemed the story worth reporting. They didn’t even bother to correct their earlier, inaccurate reporting.

I think that bears repeating. When the city handed the media false facts about the library, the media ran stories galore; but when The Reader handed them true facts, they did nothing. Although every TV station and newspaper in town knew that the new library had been sold to the public under false pretenses, not one of them found it newsworthy.

City council purchases
Not everything was a giant story. Through every spat and dustup, the cogs of the city continued to turn, carrying out everyday city business. A survey of city council actions taken during 2015 shows, for example, that the city spent $809,880 on 13,200 tons of road salt. That’s a lot of salt. The city spares no expense when it comes to destroying the bottom of your car.

In 2015, the single most expensive piece of equipment the city purchased was a Case Wheel Loader Model 821F, which cost $218,326.53. According to the Case catalog, the 821F is a mid-sized wheel loader that offers “faster throttle response while also maintaining lower temperatures and delivering up to 20 percent better fuel efficiency over other solutions.” Operating the 821F, apparently, is akin to visiting a health spa.

The 821F offers one of the industry’s quietest and most spacious cabs with class-leading visibility thanks to floor-to-ceiling windows, a low rear hood and an optional rear-view camera. Our award-winning joystick steering (another CASE exclusive) helps reduce operator fatigue while an ISO-mount cab design, dual air filtration system and optional heated, air-ride seat help provide daylong comfort.

Another large piece of equipment that the city purchased was a Vactor Jet Rodder ($212,227.88) mounted on a 2015 Western Star 4700SF 6 x 4 Chassis ($114,475.52), for a total unit expenditure of $326,703.40.

A jet rodder is not someone who roars around the harbor on a personal watercraft, waving at girls. That’s Reader publisher Bob Boone. I’m kidding. That just appeared on the page. A jet rodder is a high-pressure water hose that cleans out sewer lines. The new jet rodder replaces one that was purchased in 2003. According to the council resolution’s statement of purpose, four city utilities—water, natural gas, sanitary sewer and storm sewer—will share the new jet rodder. Everyone is excited.

City contracts for various types of computer software and services came to almost $1.3 million in 2015, with everything from work orders to water mains needing to be tracked, monitored and streamlined with special software. The biggest single software expenditure was $356,000 to Cities Digital for a “laserfiche document management system” and five years of software support. Desktop and laptop computer replacements added $255,000 of hardware to the overall computer bill. Are the efficiencies of the Computer Age worth it? I have no idea. But it is probably a safe bet that computer-related purchases will only increase in the coming years.

How about consultants? It seems like we’re always hiring consultants. I’m talking about people who are hired to study a situation and make recommendations, whose product is a report. I counted four consultant contracts in the city council minutes for 2015. Three of them were with the Minneapolis-based landscape architecture and planning firm Hoisington Koegler Group, Inc. (HKGi). One agreement was for HKGi to develop a Cross-City Trail Master Plan ($51,800); one was to develop mini-master plans for eleven smaller city parks: Norton, Fond du Lac, Riverside, Blackmer, Piedmont, Harrison, Merritt, Keene Creek, Historical, Smithville, and Grassy Point ($75,000); and the third was to develop a “St. Louis River Estuary National Water Trail master plan” ($55,820). The fourth consultant agreement of 2015 was with a nonprofit group called Forecast Public Art, based out of St. Paul, to whom the city paid $50,000 to develop a “long-term strategic public art plan.”
Only expenditures in excess of $40,000 are required to come before the city council for approval. The city hires consultants administratively for contracts under $40,000. I know that HKGi landed at least a few of those smaller contracts, such as developing a concept plan for a Kayak Bay Paddle Center and appraising Casket Quarry for its recreational ice-climbing potential. HKGi has become a familiar name in City Hall in the last year or so. They started by advising the city on a non-animal alternative for the Lake Superior Zoo, and they quickly picked up other projects. The most visible member of the HKGi team has been Bryan Harjes, who has made a number of presentations to the city council and the public.

NorShor Theatre
2015 was notable—almost comical—for the many delays that afflicted the NorShor Theatre project. Nearly every month, a city planner or economic development director would announce to commissioners of the Duluth Economic Development Authority that, at long last, everything was shaping up with the NorShor. The agreements would be ready for DEDA commissioners to vote on by the next meeting, after which they would go to the city council, and work could begin on the NorShor shortly thereafter.

But whenever the next meeting rolled around, there were never any contracts to be signed. The directors and planners would sigh and apologize and explain that the deal was very complicated and had a lot of “moving parts,” but they were trembling right on the brink of an agreement, and all of the papers would be ready for commissioners at the next meeting.

This happened five or six times. Finally, on August 31, 2015, it seemed like things got serious. The city issued a triumphant press release: “Fully funded with no impact on Duluthians’ property taxes, final NorShor Theatre details ready for DEDA and City Council approvals in September.” The press release stated that the agreements would go to DEDA on September 23 and to the city council on September 28.

It sounded like a done deal, or almost. At a committee of the whole meeting held in council chambers that same afternoon, chief administrative officer and acting economic development director Dave Montgomery told councilors, “We’re very excited about where things stand today [with the NorShor]. A lot of progress has been made.… Between now and … the end of September, you should have lots of time to [ask] additional questions, and [we’ll] meet with you and do additional work with you to make sure all your questions are, in fact, answered.….All in all, we are very excited to be here because of where this project stands right now.”

Everybody got excited. The media ran stories about it. But all that happened was the usual—more delays, more nothing. September came and went with no sign of any development agreements. October, November, and December went by. Now a new year is upon us. People don’t seem quite as excited.

Currently, DEDA owns the NorShor and adjacent Temple Opera office building. The mechanics of the NorShor deal are supposed to look like this. Private developer George Sherman, who has built the Sheraton Hotel, the Lincoln Park Apartments and other developments in town, has agreed to fix up the NorShor, which is a pet project of former mayor Ness. The last estimate for the cost of the project was $30 million. DEDA will sell the NorShor to Sherman. Sherman will fix it up and the Duluth Playhouse will manage it. After five years, Sherman will turn ownership of the building over to the Playhouse, and the city will have a vibrant anchor for the arts in the middle of its burgeoning downtown arts district.

That’s the hope, anyway. One important part of the financing is nearly $7 million of private money that Sherman has pledged to put into the project. The other parts of the package that everyone was waiting for—$7.4 million in Historic Tax Credits, $1.65 million in New Markets Tax Credits, a $6.9 million state of Minnesota grant—have been secured. DEDA has agreed to loan the Playhouse $3.5 million from the city’s Storefront Loan fund, interest-free for ten years. The Playhouse will pay back the loan with fundraising and operational revenue. So it is hoped.

The city’s statement that the project will have no impact on property taxes seems to be true. DEDA’s contributions have come from tax increment financing money, which is separate from the general fund. But there are reasons to be cautious.
Take DEDA’s $3.5 million loan to the Playhouse. What if the Playhouse is unable to pay it back? “There’ll be mortgages attached to that,” Mr. Montgomery told me on November 9. “We’d get the rights to the building.”  

Is DEDA prepared to enter the business of theater management? To me, the thought is horrifying. Hopefully it never happens. But there are many scenarios where the city would be compelled to assume greater responsibility for the project. And as time passes without a project, I fear the risk grows greater that the city will enter into unwise agreements just to get it done.

The details I am discussing here come from draft agreements that have still not been approved. They were set to be approved at DEDA’s December 16 meeting, and they were included in DEDA’s packet under Resolution 15D-57: “Resolution authorizing agreements with various parties pertaining to the development of the NorShor Theatre project.” Then, at the last minute, once again, the NorShor resolution was pulled from the agenda.
Now some people hope that the city will have a signed agreement in place by January—just in time for the unicorn migration.