News & Articles

Ash trees in Canal Park. Photo Credit: John Ramos

On August 8, 2016, the Urban Forest Commission held a special meeting to hear from Linda Cadotte, director of parks for the city of Superior, about Superior’s experience with the invasive emerald ash borer (EAB) beetle. EAB was discovered on Park Point in Duluth late last year, likely having flown over the water from Superior. The Urban Forest Commission and Duluth city staff have been working on an EAB Management Plan to guide the city’s future efforts.
According to Cadotte, when EAB was found in Superior in 2013, the city had about 3,000 ash trees on the boulevards and in the parks. All 3,000 trees were cut down and chipped except for 180 trees that some residents “adopted” by paying for pesticide injections. EAB is 100 percent fatal to ash trees, but pesticide injections can save trees. It isn’t cheap—about $10-12 per inch of tree diameter—but it is effective.
Although EAB has not yet been discovered in Duluth outside of Park Point, the beetles’ spread is generally considered inevitable. They first appeared near Detroit in 2002, probably having hitched a ride in packing material from Asia, and have spread rapidly, killing hundreds of millions of ash trees in 26 states and Canada. In the last three months, EAB has been confirmed in Nebraska and Texas.
Duluth has a bit of an advantage over Superior in that we have some advance warning. Dale Sellner, the city’s building and grounds supervisor, told me that the city began treating selected boulevard trees with the pesticide TREE-age (the trade name for emamectin benzoate) last year.  They started in the Gary neighborhood, on the assumption that EAB would be likely to jump over the St. Louis River from Wisconsin in that area. About 480 of the city’s 2,400 boulevard ash trees have been treated thus far. To insure the trees’ continued survival, they will need to be treated every two years for the rest of their lives.
The draft EAB management plan calls for all boulevard ash trees under 12 inches diameter to be cut down. Trees 12 inches and larger will be treated. Now that EAB has been discovered on Park Point, Sellner said the city hopes to start treating trees in the downtown and Central Hillside areas—but budgets are strained by clean-up efforts relating to the recent hurricane-force winds that ripped up East Duluth. Like Superior, Duluth will offer residents a chance to adopt ash trees for preservation by paying for the pesticide application.
Much of the discussion focused on what would be done after EAB had passed through town. When large numbers of trees die or are removed from an area, the water table rises. In a city with Duluth’s steep topography, this could have serious effects. If ash trees disappear en masse from higher-elevation areas of the watershed, flooding events lower down the hill will likely become more severe. This problem could be reduced if new trees of other species were planted to take the place of the ash, but professional arborist Louise Levy, owner of Levy Tree Care, told commissioners that the new trees would need to be planted BEFORE the ash trees started dying. If they were planted after the ash died, the water table would be too high for them to survive.
The city, of course, is only focused on trees on city property, especially trees along streets. There are probably hundreds of thousands of ash trees on non-city property in Duluth—think of the wooded areas around UMD, the College of St. Scholastica and Lake Superior College alone. When EAB moves off Park Point, ash trees in all of St. Louis County will be put under quarantine, but no other formal management guidelines or incentives are in place for private landowners. The Urban Forest Commission hopes that public education will encourage private landowners to remove or treat their ash trees.
Some studies in southern Minnesota have shown early success with a parasitic wasp that kills EAB, but it is not yet known whether the wasp will significantly cut down EAB’s numbers or just dent them slightly. In any case, the United States Department of Agriculture will only approve a release of parasitic wasps if an area of 15-40 acres is shown to be infested with EAB, which is what the wasps need to establish a viable population. Duluth currently has no known EAB infestation area of that size.
The EAB Management Plan will be considered at the Urban Forest Commission’s August 16 meeting, and will go to the city council thereafter.

TIF notes

One thing that many of Duluth’s largest developments have in common is Tax Increment Financing (TIF). In recent years, TIF has been used to assist the Pier B Hotel, Kenwood Village mixed-use development, Bluestone apartments and the NorShor Theatre redevelopment, among other projects. TIF subsidies are intended to encourage development on blighted, contaminated or otherwise challenging sites, though Duluth has occasionally granted TIF to projects on virgin green space as well, such as the United Healthcare facility on Rice Lake Road.
TIF is a fairly simple concept. Let us suppose there is a plot of land on which a developer wants to build a hotel.  Certain conditions on the site, however, add to the project’s cost; for example, past industrial use may have contaminated the site with chemicals that need to be cleaned up. The developers inform the city that without TIF assistance, the project will be unable to proceed. This is known as the “but-for” test—BUT FOR the TIF money, the project will not be built. All TIF projects are required to meet the but-for test, which essentially means that every TIF agreement has a paragraph saying the project can’t be built without TIF. This is a difficult claim to prove, since the only way to prove it would be to withhold TIF money and see if the project remains unbuilt, but it is a requirement nonetheless.
With no hotel on it, the land generates $10,000 in property taxes annually. It is estimated that when the hotel is built, the property will generate $100,000 in taxes. The difference between these two numbers--$90,000—is the tax increment. Essentially, the city issues bonds for TIF-approved portions of the project and then pays off those bonds over 15 or 20 or 25 years using the increment that is collected. Because this means that developers essentially get to invest future property taxes into their own projects, TIF is very popular with developers. The upside is that the city gets a new development on (usually) marginal land. The downside is that the city cannot use the property taxes for general purposes until the bonds are paid off.
TIF is used in all fifty states, Canada and around the world. In Duluth, TIF is mostly handled by the Duluth Economic Development Authority (DEDA), which has 11 TIF districts in the city, and the Housing and Redevelopment Authority (HRA), which has 7. DEDA’s busiest TIF district is District #22, known as the Medical District, where TIFs have helped fund construction of the Sheraton Hotel, a skywalk between the Sheraton and Greysolon Plaza, a parking ramp on First Street, and the NorShor Theatre redevelopment. All of these properties, pre-development, generated about $90,000 in taxes. After development, it is expected they will generate $653,000 in taxes. The increment—$563,000—is the largest in any of DEDA’s TIF districts. (Pier B is second, at $306,000.)
The city of Duluth itself administers one TIF district independently of DEDA—District #26, where the city built a 481-space parking ramp and skywalk in conjunction with Maurice’s new corporate headquarters downtown.
According to Heather Rand, executive director of DEDA, the total amount of TIF captured by DEDA, the HRA and the city is about $2.9 million annually—a big number, but smaller than it has been in the past. Two of DEDA’s TIF districts were decertified at the end of 2015, which has reduced TIF revenue. “Based on calculations provided by the St. Louis County auditor’s office and city of Duluth finance staff,” Rand wrote me, “the percentage of city tax capacity currently being captured in TIF…is 2.26%. This percentage is a slight drop from last year’s 3.4% figure [and] considerably less than comparable Minnesota cities.”
This is good news for the  property tax base, but perhaps not so good news for DEDA, which derives a portion of its income from administering TIF districts (they also manage parking lots and a few rental properties). Undoubtedly, though, new TIF districts will be created as new projects come along, and DEDA will see its income rise again.

Mayor Larson: The first two weeks

I recently had a chance to sit down and read every email sent to or by Mayor Emily Larson during her first two weeks in office. Sadly, the emails didn’t reveal any nefarious plots or smoking guns. There was a lot of well-wishing and congratulations, as well as spam for “racks & shelving” and an email from Mr. John Aboh, director of a Nigerian bank, concerning a great money-making opportunity. The mayor did not take advantage of that opportunity, but she did ask the human resources office if she could contribute more than 5 percent of her paycheck to her retirement account, demonstrating an admirable personal frugality (the answer was no: 5 percent is the limit).
In an email sent to all city employees on January 8, Mayor Larson wrote, “I’ve opened the doors of my office. Literally. Thanks to front line office staff for embracing this change to keep open our double doors…I hope you take this as a visual example of my commitment to be both a strong leader and good partner with all of you.”
The mayor, along with Heather Rand, planned visits with the ten largest private employers in the city to let them know how much they were appreciated. The city’s largest private employer is Essentia Health. Here is the whole list.

• Essentia Health (6,600 employees)
• St. Luke’s Hospital (1,990)
• Allete/MN Power (1,320)
• Cirrus Aircraft (650)
• CN Railroad (467)
• ZMC/Hall Investments Hotels (450)
• Maurices (420)
• AAR Aircraft Services (400)
• Grandma’s Inc. (360)
• Verso Paper (290)

In other matters, the mayor had the furniture in her office refinished. Melissa Burlaga of FOX 21 News wanted to do a story about the redone office, with the theme “New mayor, fresh start, fresh coat of paint.” Pakou Ly, city spokesperson, persuaded her otherwise. “I told her this is not news and suggested it would be better if they did a story on Emily’s first week in office instead. She was willing to do that.”
The mayor went on the local PBS program Almanac North to talk about her new administration. Producer Greg Grell emailed her to advise that “we will not be providing makeup for our guests tonight because our WITC Cosmetology students are still on winter break.”
Mayor Larson responded, “But I’m the Mayor! KIDDING!” On another occasion, commenting on a draft letter that somebody sent for her approval, she wrote that the letter was “PERF!” So we can see her hip, energetic personality showing through, as we can in an email from a constituent, who wrote, “It’s pretty cool to run into your city’s Mayor on a fat bike on the local trails.”