The Duluth City Council unanimously decided Monday night to hit pause on a request to erase three-quarters of the $1.2 million in debt the Spirit Mountain Recreation Area owes the city.
Spirit Mountain maxed out a line of credit the city extended in 2014 and has been unable to pay it down since then. What's more, Noah Schuchman, Duluth's chief administrative officer, said it's impractical to think the debt can be recovered.
Under the terms of a resolution tabled by the council, the recreation area would have been required to pay off just $300,000 of that debt over the next three years, with the remainder to be forgiven.
But 2nd District Councilor Joel Sipress faulted Mayor Emily Larson's administration for providing elected officials, such as himself, so little time to consider the proposal and asked for a couple of additional weeks of review.
"I do not think it is appropriate or responsible to ask the City Council to embark upon a venture of this sort, even if we're only looking at the first step in that journey, on the same night that we first received some of the details that we need to evaluate the overall strategy," he said.
At large Councilor Zack Filipovich said: "I do think we should have a little more time. I'm not here to cast blame anywhere, but I think the council should have more time to fully vet and think through that plan."
The debt forgiveness is just one component of a package laid out by Larson on Thursday to invest $24 million at Spirit Mountain, updating and refreshing the beleaguered recreation area after years of neglect. She proposes that Duluth seek $12 million in state bonding funds, with the city bonds being used to cover the other half of the cost. Duluth would then bond for the other $12 million, with Spirit Mountain expected to repay half of that sum.
While at large Councilor Arik Forsman said he would support the request for more time, he suggested the city has little choice but to step up and help Spirit Mountain.
"We must choose reinvestment, or we are by proxy choosing inevitable death for Spirit Mountain. Those are our two choices, at the end of the day," he said.
Nodding in agreement, 5th District Councilor Janet Kennedy said, "We can no longer sit and do nothing for Spirit Mountain, and this is a big something."
"If this doesn't work, this is probably our last hurrah," she said.
While the council tabled the request for debt forgiveness, it moved ahead in approving a contract for a firm called TKDA to develop plans for improvements to Spirit Mountain's Skyline Chalet and campground by a 7-2 vote. The cost of the work will be borne by Spirit Mountain, but Schuchman said he requested council approval with an eye toward providing full transparency.
Schuchman said any delay in completing the study could put Duluth's ability to procure state bonding assistance at risk.
But Sipress said, "We were told that this vote cannot be delayed, because were we to delay this vote, it might actually jeopardize the process of seeking state bonding money."
"I have to say that it's extremely unfortunate that the council has been put in the position of being told that we have to act on this —the more important resolution — when again tonight and today was the first time that I feel like I, as a councilor, began to receive the kind of information I need to determine whether the city's plan to seek state funding, with that local match, is something that we should get behind," he said.
At large Councilor Derek Medved joined Sipress in voting against the resolution, questioning the sequence of events. He suggested the city would be better served to determine whether any private management firm would be willing to take over operations at Spirit Mountain.
"Let's find a partner first and foremost, and I have no interest in supporting a debt forgiveness and I have no interest in supporting this resolution to support the renovations or a game plan for Spirit Mountain until we have a partner who is committed to investing and sharing the risk involved," he said.
However, Schuchman suggested an assessment of the chalet and campground will be needed regardless of how the city proceeds and stressed the importance of moving forward with the work.