BUZZ Blog: If the city is broke, why is it buying the NorShor?
Peter Passi and Brandon Stahl cover issues related to the city of Duluth. Follow BUZZ on Twitter.
I thought the city was broke!
That's what I hear and read a lot when it comes to the city paying $2.6 million for the Temple Opera and NorShor buildings. How can the city afford to spend that kind of money when libraries are closed, roads are bad, more police are needed, etc.
The answer: while it's all tax dollars, the money to fund general city operations and to buy the NorShor comes from two very different pots. Because it's a bit complicated and contentious, I wrote the mayor and asked him to explain, which he did. And he also offered up a reply to the 2001 story regarding DEDA not buying the NorShor.
"There are NO general fund dollars being used for this purchase. These funds cannot be used for street improvement, libraries, police, fire, etc. In fact, they are not even "City" funds, they are DEDA economic development dollars dedicated to the redevelopment of the downtown waterfront district. These are existing funds that have been sitting in the bank for many, many years waiting for a redevelopment project. The redevelopment of the NorShor Theatre will support existing private investment in the area and will be the catalyst to encourage additional private development in the coming years.
With the increased economic activity in old downtown, we should see increased sales tax and property tax collected that will support those city services. With the redevelopment of the theater, we will likely see other private investment and business activity in that area of downtown because the theater will draw hundreds to the area to see shows on a regular basis."
And as for the DEDA decision...
"While I was not on the Board, I was at that DEDA meeting. There were several key differences from that time to today:
1) While the offer was before DEDA, Eric had not agreed to it. In fact, Eric was telling us that he would most likely NOT agree to it. It was my sense that DEDA's vote was to end the deal on their terms rather than to make the offer and have Eric reject it. Negotiating in the public does not work, especially with this building. An important difference this time is that we have a signed purchase agreement ready to be approved.
2) There was stiff opposition to the sale by the downtown arts community. They did not trust Mike Conlan and there was a sense that Rick Boo's operation would be kicked out. 2001 was near the height of the NorShor's success, there was a very loyal customer base and concerts were happening all throughout the week.
3) Old downtown is a very different place than it was in 2001. Since that time we have seen tremendous private investment in all of old downtown along Superior Street. The dynamics of the 200 block are significantly better than they were 10 years ago and there are a number of projects just waiting to happen.
4) Eric has made significant investment in the building since 2001. He has put fire suppression systems throughout the theater, basement, and office space.
5) We have seen the impact that restoration of historic theaters means for downtowns across Minnesota and the Midwest. There are significantly more resources for historic renovation available today than ten years ago, I think there is more community passion to save the building today than there was ten years ago."