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Duluth moves to reduce property tax burden, support skatepark

Councilors reached a compromise regarding how to redirect tourism tax proceeds.

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An architectural rendering shows the skate park that is being constructed at the Gary-New Duluth Recreation Area. Contributed / Gary-New Duluth Development Alliance

Two competing proposals for how to distribute Duluth's tourism taxes were melded into one resolution, offering a partial victory for the authors of both Monday night.

The Duluth City Council unanimously passed the resulting resolution, which will direct an additional $70,000 to Duluth's general fund next year and provide $20,000 in additional support for a skatepark under construction in Gary-New Duluth.

The debate was initially set off by a decision by the board of directors for the Bentleyville Tour of Lights to decline $50,000 in tourism tax funding the organization had been recommended to receive, following the city's review of multiple proposals. Nathan Bentley, the event's founder and namesake, explained that the board felt the marketing funds were unneeded due to the promotional support he expects will be provided by Belmont Partners, the new firm Duluth has tapped to market the city as a tourist destination next year.

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The #BENTLEYVILLE letters outside of the parking lot at Bayfront Festival Park in Duluth as seen on Wednesday, Nov. 3, 2021. Dan Williamson / File / Duluth News Tribune

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The availability of undesignated funds prompted councilors Janet Kennedy and Derek Medved to propose the $50,000 instead be used to support efforts to build a skatepark next door to the Gary-New Duluth Recreation Center.

Mark Boben, who has spearheaded the project, said $450,000 has already been invested in the skatepark, which will likely require another $600,000 to complete.

He said the cutting-edge streetscape skatepark would be the first of its kind in northern Minnesota and predicted it would be "a regional draw for tourism."

Kennedy said of the project: "It's a way to help build more tax base, and that's what we need."

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An aerial photograph of the Gary-New Duluth Recreation Area taken in March 2021 shows the partly built skateboard park, lower left, the green and blue sports court, the raised beds of the community garden, to the right, the dog park, far right, the community center and storage building, middle left, the blue-roofed pavilion and the two soccer fields, top. The building in the lower right is a private house. Steve Kuchera / File / Duluth News Tribune

But 2nd District Councilor Joel Sipress suggested the money would be better spent to increase the amount of tourism tax proceeds used to pay for basic city services provided in support of tourism and many of the larger events Duluth hosts.

He noted that the tourism tax allocation for the city's general fund has remained unchanged since 2016. If adjusted for inflation, Sipress said the amount the city receives should really be at least $100,000 more than what had been proposed.

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Sipress argued that local property taxpayers have been subsidizing Duluth's tourism industry. And he suggested that situation was particularly untenable in the face of a property tax levy increase of up to 11% authorized by the council in September to provide more support for public safety and affordable housing initiatives next year.

"I think we have a moral obligation to look for other places to find savings to at least offset part of the cost of what we have set as a priority," he said.

At large Councilor Zack Filipovich co-sponsored Sipress' proposal to use not only the savings from Bentleyville's unused allocation but also to trim an additional $40,000 from the tourism tax funding earmarked for the Glensheen Mansion, the Duluth Children's Museum, the Hawk Ridge Bird Observatory, the North Shore Scenic Railroad, Spirit Mountain operations, Duluth Sister Cities International and an international film festival proposed the Zeitgeist Center for Arts and Community.

Filipovich said that ideally, he hopes to achieve at least $450,000 in savings to bring down the city's proposed 2022 levy. He acknowledged the proposal before the council Monday fell well short of that mark but said: "This proposal helps. It's not everything. But it helps."

Medved suggested the public/private partnership that has led to the revitalization of the Gary-New Duluth Recreation Center could serve as a model for community centers throughout the city and recommended the council do everything it can to support the completion of the skatepark now in progress.

Yet 2nd District Councilor Roz Randorf continued to favor the proposal to provide greater property tax relief, saying: "One amendment is an ask to spend, and one amendment is an ask to save."

Ultimately, however, the council reached a compromise, agreeing to provide 40% of the undesignated Bentleyville funding to the skatepark project and the remaining 60% to go toward the city's general fund. That, along with additional cuts to other tourism tax recipients, will provide a total of $70,000 more being sent to the general fund for a total contribution of $1.165 million in 2022.

Peter Passi covers city government for the Duluth News Tribune. He joined the paper in April 2000, initially as a business reporter but has worked a number of beats through the years.
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Bygones is researched and written by David Ouse, retired reference librarian from the Duluth Public Library. He can be contacted at djouse49@gmail.com.