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For the past several years, Old Downtown has been experiencing what many in Duluth are calling a “renaissance.” Along Superior Street, from Lake Avenue to about 8th Avenue East, there are new buildings, refurbished buildings, and arts and entertainment venues that didn’t exist a decade ago. The city has been an active partner in much of the new development, offering tax increment financing, storefront improvement loans, skywalks and other incentives to developers and stakeholders.
 On May 9, 2011, as part of the renaissance, the city council approved a request from the Duluth Economic Development Authority (DEDA) to grant $350,000 to the development group known as Old City Hall, LLC. Headed by Tim Nelson, Rod Raymond, and Jerry Peterson, the group wanted to renovate and restore two aging downtown buildings to historical, federally-certified standards: Old City Hall, at 2nd Avenue East and Superior Street, and the Lange Motor Building, half a block east. In addition to their downtown properties, the developers operated Fitger’s Brewhouse, the Burrito Union and the Endion Station Public House.  Renovating Old City Hall and the Lange Building to historical standards would allow them to earn state historic tax credits.
DEDA commissioners and city councilors were enthusiastic about the project, and said so in the legislation. “The primary goal for DEDA’s assistance is the historic renovation of two Old Downtown landmarks,” stated City Council Resolution 11-0232, “—Old City Hall Building (1888 to 1929) and the Lange Motors Building, most recently known as the Carlson Bookstore.  […] In addition to creating construction jobs and renovating these blighted buildings, it is anticipated that several new business tenants will create permanent jobs and contribute to the arts and entertainment theme of Old Downtown. […] The Old City Hall Building project will house a restaurant, meeting space and fitness studio. The Lange Motors Building renovation plans are still in development, but they include a café, brew pub, bakery, meeting/event center and sound studio.”
The agreement also set completion dates and job-creation requirements for the project. Old City Hall, LLC, committed to creating twelve full-time equivalent (FTE) construction jobs over the duration of the project.
In March of 2012, the refurbished Old City Hall building, featuring Tycoons Alehouse, opened to rave reviews from citizens. The Old Downtown renaissance seemed to be going full steam ahead. But all was not going smoothly for the developers. Despite the community enthusiasm, renovating Old City Hall had taken longer than expected, and cost them more than they expected. The historic tax credits they needed from the state had not yet been granted.
On December 19, 2012, the developers came to DEDA and asked that the completion dates for the Lange Motor Building be pushed back by six to nine months. Bill Burns, attorney for the developers, also said that restoring the Lange Building to historical standards “may not be practical,” but, he assured commissioners, “we’ve made the commitment to try to do that, and that’s our intent.”
In response to questions about what the refurbished Lange Building would be used for, Jerry Peterson said, “It’s gonna be multi-use. We’re gonna have another brew pub in there. We’re gonna have a walk-up bakery. We’re gonna use some of the facility for more of our prep kitchen work for all of our facilities. And more catering. We’re going to have an events center on the second floor to accommodate, like, 300 people. So it’s gonna have about four uses in the building, and the brewery, again, is a major part of our plan.”
Seven months later, on July 24, 2013, the developers returned to DEDA to ask for a further extension. They had still not received the tax credits from the state, which they needed to begin work on the Lange project. Commissioners granted the extension.
Last week, on August 27, 2014, DEDA commissioners found a third amendment to the agreement with Old City Hall in their packets. Like the previous changes, this amendment extended various project deadlines for the Lange project. Another clause changed the way grant funds would be disbursed. Originally, the agreement called for the developers to establish a $350,000 escrow account, from which they would pay their bills for materials. The city would then review the expenditures and reimburse the developers, up to $350,000, for whatever qualified expenses they incurred. In the latest version of the agreement, the escrow account requirement had been removed. Now, upon proof that materials had been delivered to the job site, the city would simply pay the supplier’s bill.
The most drastic change was the removal of the word “historic” from throughout the grant agreement. Back in 2011, DEDA and the city council had declared historic renovation to be the “primary goal” of the project—in other words, the primary reason they were giving the developer assistance. Now they were being asked to abandon that goal, but continue with the assistance.
“Turns out [historic renovation is] just not practical for this building,” Mr. Burns explained to commissioners. “The consultant had some real questions about whether she could actually do a certified rehab of this building. So we requested relief from that. The building, as designed, is going to fit, definitely, in the district, and I know they’re anxious to get going. As soon as this is signed and sealed, the materials will be ordered.”
DEDA President Nancy Norr asked Burns what plans his clients had in mind for the building once it was fixed up.
“The plans are inspecific,” replied Mr. Burns. “We might end up renting out the building.”
So no historic renovation, and no “café, brew pub, bakery, meeting/event center and sound studio,” as the city council resolution so dreamily speculated in 2011. No brewery, centralized kitchen prep area or catering service, as Jerry Peterson said would happen in 2012. Instead, a rental space.
After a short discussion, DEDA commissioners unanimously approved the changes to the contract.
The average citizen might find it surprising that nobody seemed too concerned about the project’s change in direction—because the average citizen would make the mistake of thinking that anybody on the DEDA board cared very much about historic renovation to begin with. Everybody involved in economic development knows that you say whatever you have to in order to secure funding for a project, then change things, even if it’s your entire rationale, as the project goes on. That’s how the game works. The Lange project is only the latest example.
The take-home message of this story is that claims made by developers—as well as DEDA commissioners, city councilors, and staff—should always be treated with skepticism. It will save us from disillusionment in the long run.
Not that the story of the Lange Motor Building is especially disillusioning. It does have a happy ending of sorts, if not the glorious outcome everyone was hoping for. When the project is complete, the city will have spent $350,000, and we will have another fixed-up building downtown. Worse things could happen.

Kwik Trip ripple effect

Can you feel it—that excitement in the air? Kwik Trip is in town. For the past several months, work crews have been clearing lots and building stores at a number of area locations, and this past week the grand opening coupon books arrived in the mailbox. The Tower Avenue Kwik Trip in Superior is now open!
According to their flier, they sell meat and produce and fresh doughnuts, as well as hot pizza. They’re offering coupons for $1 off your gas purchase. There’s another coupon for a free pound of baking potatoes. And another one for a free cappuccino or hot chocolate—a three-dollar value. And one for a free gallon of milk. Kwik Trip’s promotional strategy goes back to the basics: If you want people to like you, help them out with their grocery budget.
I’ve noticed Kwik Trip turning up in unexpected conversations. At the monthly board meeting of the Duluth Entertainment and Convention Center on August 26, 2014, DECC Director Dan Russell told board members that Kwik Trip, out of the blue, had decided to hold their 800-person regional company meeting at the DECC, in November of 2015. “They came here looking for a room to do some training, and [now] they’re having their Midwest convention here,” Russell reported happily.
Later in the meeting, DECC Assistant Executive Director Chelly Townsend updated the board on the DECC’s efforts to hire employees for various positions.
“What are you starting them at?” asked Board Member Nick Patronas.
“Well, it’s eight dollars,” Townsend replied.
“Good luck,” said Patronas, who owns and operates Burger Kings and other businesses in the area. “Kwik Trip’s kind of changed the whole playing field now.”
“What does Kwik Trip start people at?” asked Board Member Yvonne Prettner-Solon.
“Ten, eleven, twelve,” said Patronas. “They hire everybody.”
My own observation, later that day, of a SuperAmerica gas station advertising a starting wage of $9.50 an hour, seemed to bear out Patronas’s comments. That was a much higher wage than I’d seen offered for that job before.
When I mentioned Kwik Trip to a former truck driver I know, he said he always used to stop at Kwik Trips when he was on the road, because the people at Kwik Trips were nice, unlike the sullen, cranky bastards you found working at Duluth gas stations. I considered sticking up for Duluth gas station employees, who I’ve never found to be horrible, then decided it wasn’t really my problem and let it go.
Several more Kwik Trips are set to open soon.

Unconventional center

The packet for DECC board meetings includes a sheet listing different groups that are considering holding conventions at the DECC. I never realized there were so many groups that needed to hold conventions. Like the Concrete Paving Association of America. I’ll bet there’s some pretty heavy discussion that goes on at that convention. Or the National Sunflower Association, which I imagine has a lot of pretty seedy characters. Or the Minnesota Hobby Beekeepers Association, which buzzes with activity.
It’s easy to know what to expect when the Midwest Society of Association Executives has a convention—I see an orderly crowd of people making networking sounds. Or the National Court Reporters Association, where if you lose your train of thought, people can immediately tell you what you just said.  But what are we to make of the Minnesota Council on Foundations, a group with a name so generic that they begin each convention by pinching themselves to make sure they exist?
When the Rhetoric Society of America convenes, it takes them three days just to get through the introductions. The convention for the Association of Mailing, Shipping & Office Automation Specialists is attended entirely by robots, who have replaced the specialists. At the Minnesota Corn Growers convention, people are all ears.
Shall I end this now? Yes, I think so.

In response to criticism from his proofreader, John Ramos has promised to write fun, happy, upbeat articles from now on. jramos@shiningreputation.com.