Spirit Mountain could be forced to sit out most of this year due to the COVID-19 pandemic.
If passed, a resolution heading to the Duluth City Council on Monday would revise Spirit Mountain's budget under the presumption that its "staff will remain on layoff until preparation for winter operations begin in September and will remain closed to the public until the winter season begins in November."
Spirit Mountain has remained closed since March when the COVID-19 outbreak forced it to discontinue operations and lay off almost its entire staff.
The city of Duluth is being requested to provide "cash-flow support of approximately $350,000 in the early fall period when Spirit Mountain incurs expenses to prepare for winter operations." That's on on top of the $420,000 it already was slated to receive from the city through a tourism tax allocation.
The resolution says Spirit Mountain's leadership considered reopening in July but decided against it because that would have required an additional $200,000 of support from the city. The Spirit Mountain Recreation Area has become a popular mountain bike destination. It also is home to a campground and an Adventure Park, featuring an alpine coaster, a zip line ride, a mini-golf course and a disc golf course. The venue hosts a number of events, as well, including weddings and other gatherings. All of those activities will be idled this summer.
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Should Spirit Mountain be forced to remain closed through next winter, the Spirit Mountain Recreation Authority would remain on the hook for as much as $2.6 million to cover the cost of season pass refunds, outstanding debt, payroll and accounts payable. As the authority would be unable to shoulder those costs, they most likely would be pushed to the city.
The city also would retain its ongoing responsibility for paying $500,000 per year in debt service related to the construction of the Grand Avenue Chalet. Duluth has relied on tourism tax proceeds to cover that cost, but tourism taxes have been greatly diminished due to the impact of the ongoing COVID-19 outbreak.
Duluth City Council President Gary Anderson said: "This is the worst financial crisis that we've ever experienced in our lifetimes, and entities like Spirit Mountain are fighting for their lives."
"So, right now it's the Council's job to approve this budget. I don't see that we actually have any other choice. But we have an obligation to the great community to look at how do we create a more viable path forward," he said.
Unlike some other ski hill/recreation areas, Spirit Mountain has been relatively defenseless against the economic fallout from the novel coronavirus. As a government-owned and government-run operation, it has been deemed ineligible to receive emergency aid through the Paycheck Protection Program — a funding source that has offered relief to some of its peers in the industry.
Anderson said the stakes are high. "This is a huge community asset. It would be devastating to lose something like this, and we have to face the reality that we may."
Spirit Mountain faced a challenging run even prior to the COVID-19 pandemic. In December, the Duluth City Council approved $235,000 in additional assistance for the ski hill, after a snowstorm forced organizers to cut short an annual event it hosts — the 2019 Amsoil Duluth National Snocross races. Without that financial infusion, Spirit Mountain Executive Director Brandy Ream warned that the operation would not be able to meet payroll and would need to discontinue business.
Ream referred questions Tuesday night to Duluth Public Information Officer Kate Van Daele, who declined to discuss further details, saying the matter will be more fully addressed by city and Spirit Mountain officials at a Wednesday afternoon press conference.
