Duluth looks to invest nearly $10.8 million to shore up Lakewalk, shoreline but city councilor expresses cost concerns
Duluth City Councilors are wrestling with the tax implications of Lakewalk repairs versus the cost to tourism if work is delayed.
On Tuesday, the Duluth City Council will be asked to approve two contracts for projects meant to gird portions of the city's wave-battered shoreline at considerable expense. Although Duluth would be responsible for only a portion of the nearly $10.8 million combined cost of the two projects, councilors voiced concern over the strain it would place on the city's finances during the hardships of the ongoing COVID-19 pandemic.
By far the larger of the two projects would require an investment of up to about $10.15 million along Canal Park's lakefront. It would involve armoring the shore with heavier stones and replacing about 2,000 feet of storm-damaged Lakewalk, including both asphalt paths and a boardwalk.
The project would complete the third phase of a $20 million effort to repair the Lakewalk with the help of state and federal disaster assistance. The city would be left to bear about $4.2 million of that cost — or about 21% of the total. That's a greater share than the city had anticipated, as it had included roughly $2.5 million to be included in its bonding plan for the work.
The cost of bonding for the larger sum and servicing that debt could be covered by less than a 1% increase in the city's property tax levy, said City Budget Manager Jennifer Carlson during a Thursday night Council agenda session meeting.
But Councilor Derek Medved suggested the work be put off until better days, saying: "I think it's a very unreasonable time in my mind to be asking the community for an increase in taxes, whether it be 1% or half-a-percent. So, I will be voting against this."
Noah Schuchman, Duluth's chief administrative officer, said that while he appreciated Medved's concern, "If this work is not done, the Lakewalk will continue to erode into Lake Superior, and make it no longer a tourist destination. This is the third phase of a lengthy rehabilitation project that the city and the federal government have undergone, and the federal government has paid for the vast majority of it. If the Council chooses to table this item, and then we do move forward at a later date, that will likely mean that the project will not be completed in time for the end of construction in 2020, which means that it will bleed into the 2021 tourist season and impact tourism next summer at a time quite frankly that we're not going be able to afford to impact tourism."
Medved offered an alternative to a tax increase.
"Instead of asking the community for a levy increase, can we look at or consider selling a city asset, whether that be a golf course or anything that may produce financial gain for the city?" he asked.
Schuchman responded: "That is certainly something we are open to looking at. We have RFPs out on land associated with both the Lester Park and Enger golf courses."
But Schuchman said, "The important thing to call out at this point is that a land sale or property sale or asset sale by the city is something that can't be done quickly. It certainly can't be done by Tuesday and not in a way that we can use that we can use it to balance out the cost of this project and the bonding associated with it."
The Council will take up the matter when it meets at 7 p.m. Tuesday.
The other smaller project would stabilize about 355 feet of eroding shoreline behind the Lakewood water treatment plant at a cost of $604,750 to replace displaced revetment stone with heavier armor stone and make repairs to two storm sewer outflows.
The Federal Emergency Management Agency will cover 75% of the cost of that work, leaving the city to pay about $151,000.
Veit & Co. Inc. submitted the low bid for both projects, coming in well below engineers' estimates. The bid for the Canal Park work beat projections by better than $6 million, and the work behind the Lakewood water treatment plant was bid for a price nearly 40% below the originally projected cost of $979,950.